REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.  3828 OF 2007

Commissioner of Central Excise ...Appellant(s) Hyderabad-I

Vs.

M/s. Charminar Non-Wovens Limited    ...Respondent(s)

J U D G M E N T

GANGULY, J.

1. In this appeal filed by the Revenue, the issue is  

whether non-woven carpets having exposed surface of polypropylene  

are classifiable under heading 5703.20 as “jute carpet” to justify  

concessional rate of duty or whether the said non-woven carpets  

are classifiable under heading 5703.90 as “other carpets”.   

2. It  is  not  in  dispute  that  the  period  which  is  

involved in this case is between April, 1996 to October, 1996.   

3. The  show-cause  notice  was  issued  by  the  Revenue  

against the respondent on 6.11.1996 alleging the respondent’s a  

case of mis-classification of carpets under heading 5703.20 and  

thereby mis-utilization of the benefit of Notification No.29/95-CE  

dated 16.3.95 and 16/96-CE dated 23.7.1996 and thus clearing the

goods at concessional rate of duty of 5%.  The Revenue’s case is  

that such concessional rate of duty is available only for jute  

exposed  surface  floor  coverings  and,  therefore,  there  has  been  

contravention of Rule 9(1), 52-A, 173-B, 173-F and 173-G of the  

Central Excise Rules, 1944.

4. The case of the respondent is that it is manufacturer of  

blankets, carpets and floor coverings falling under Chapter 63 and  

57 of the Central Excise Tariff Act, 1985 (hereinafter “the said  

Act”) and its products known as “Charms Jute Floor Coverings”, is  

classifiable  under  chapter  sub-heading  No.  5705.00  (before  

26.7.1996) and then under chapter sub-heading No. 5703.20.

5. The  respondent  contested  the  aforesaid  show-cause  

proceedings and therein an adjudication order dated 29.11.2004 was  

passed.  In passing the said adjudication order, the adjudicating  

authority returned several findings to the effect that in the past  

the  issue  involved  in  this  case  was  decided  in  favour  of  the  

assessee by Collector of Central Excise (Appeals) vide its order  

dated 16.07.1993.  After the said order, no objection was raised  

by  the  Revenue  and  the  assessee  continued  to  discharge  its  

obligation of duty liability in terms of the said order.  The  

adjudication authority also came to a finding that the surface of  

the goods manufactured by the assessee is neither piled nor looped  

with ground fabric, rather the goods are manufactured by needle  

punching process.  The aforesaid findings were arrived at after

examining a piece of the sample of floor coverings which were  

produced in the course of hearing.  The adjudicating authority  

also  came  to  a  finding  that  in  the  goods  manufactured  by  the  

assessee,  predominance  of  jute  content  by  weight  has  not  been  

disputed in the show-cause notice.  Rather the chemical examiner’s  

report dated 28.08.1991 clearly states the predominance of jute by  

weight  in  the  product.   Therefore,  the  adjudicating  authority  

followed the decision of CESTAT in the case of  Uni Products (I)  

Ltd. Vs.  Commissioner  of  Central  Excise –  2006  (200)  ELT  278  

(Tri.-Delhi), and held that the process of manufacture of non-

woven carpets which is followed in the case in hand is exactly the  

same which was followed in the case of Uni Products (supra) and  

accordingly the show-cause proceedings were dropped against the  

assessee by an order dated 29.11.2004.   

6. Against  the  said  order,  an  appeal  was  filed  by  the  

Revenue and the said appeal came to be decided by the Commissioner  

of Customs and Central Excise (Appeals), Hyderabad.  In the course  

of hearing of the appeal, the appellate authority noted why the  

adjudication  authority  decided  that  the  classification  of  the  

product  in  question  should  be  under  sub-heading  5703.20.   The  

appellate authority also noted that the said carpet was physically  

examined by the adjudicating authority, and after doing so, the  

adjudicating authority came to a finding that floor covering was  

neither piled nor looped, rather the goods were manufactured by  

needle  punching  process.  The  adjudicating  authority,  therefore,

came  to  a  concurrent  finding  that  the  goods  in  question  were  

correctly classified under chapter sub-heading 5703.20 and are not  

to  be  classified  under  “other”  under  chapter  sub-heading  No.  

5703.90.  The appellate authority also held that the decision of  

CESTAT in the case of Uni Products (supra) is applicable in the  

facts of the case.  With the said finding, the appellate authority  

rejected the appeal of the Revenue.   

7. When the Revenue further took the appeal up to Tribunal,  

the Tribunal referred to its decision in the case of Commissioner  

of Central Excise, BBSR-I Vs. Champdany Industries Limited – 2006  

(193) ELT 295 (Tri.-Kolkata), and held that the issue is covered  

by the decision in Champdany Industries (supra). The appeal filed  

against  the  same  decision  rendered  in  the  Champdany  Industries  

(supra) has been dealt with by this Court in the case in Civil  

Appeal Nos.7075-7076 of 2005. In that judgment, all the issues  

raised by the Revenue have been discussed in detail.  After such  

detailed  discussion,  the  contentions  of  the  Revenue  have  been  

rejected.   

8. Following the same parity of reason contentions of the  

Revenue,  which  are  identical  in  this  case,  are  also  rejected.  

Apart from that, it appears that in this matter the Revenue’s case  

has been constantly rejected at all the three levels, namely, in  

the adjudication order passed by the Addl. Commissioner of Central  

Excise,  in  the  appellate  order  passed  by  the  Commissioner  

(Appeals) and in the Tribunal.  Such decisions have been rendered

on the basis of the relevant materials and after analyzing the  

evidence on record as also the provision of Section Notes and  

Chapter Notes.   Such concurrent findings by the lower authorities  

are interfered with by this Court in exercise of its jurisdiction  

under Section 35L of Central Excise and Salt Act, 1944 only when  

such  findings  are  patently  perverse  or  are  based  on  manifest  

misreading of any legal provision.  Here none of these situations  

is present.   

9. Reference in this connection may be made to the decision  

of  Sidharath  Pharmaceuticals Vs.  Collector  of  Central  Excise,  

Ahmedabad – 2003  (157) ELT 502 (SC).  In that judgment, the  

learned Judges of this Court held that with the concurrent finding  

of facts reached by lower authorities in classification on the  

basis  of  evidence  and  on  analysis  of  relevant  legal  provision  

interference is not called for by this Court in exercise of its  

power under Section 35L of the Central Excise Act, 1944.   

10. Similarly,  in  the  case  of  Auto  Control  (P)  Ltd. Vs.  

Collector, quoted in 2006 (199) ELT A.127, this Court held where  

there is a concurrent finding of fact by the authorities below in  

support  of  respondents  claim  for  classification  normally  this  

Court does not interfere with such concurrent findings.   

11. In view of the aforesaid settled law, this Court does  

not  find  any  merit  in  the  appeal  filed  by  the  Revenue.   The

Revenue’s appeal is thus dismissed.  However, there is no order as  

to costs.   

.........................J. (D.K. JAIN)

.......................J. New Delhi (ASOK KUMAR GANGULY) September 8, 2009