http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 2  

CASE NO.: Appeal (civil)  6559-6560 of 1997

PETITIONER: Commissioner Of Customs & Central Excise & Ors.

RESPONDENT: M/s Charminar Nonwovens Ltd.

DATE OF JUDGMENT: 05/05/2004

BENCH: CJI & G.P. MATHUR.

JUDGMENT: J U D G M E N T

(With C.A. Nos.776/1999, 3568-3571/2000, 6270- 6271/2000, 6447-6448/2000, 341-344/2001,  4446/2001, 6198/2001, 1810/2002)

RAJENDRA BABU, CJI:

CIVIL APPEAL NOS.6559-6560 OF 1997

       In these matters the question for our  consideration is whether Floor Coverings and Filter  Fabrics are to be classified under sub-heading  No.5703.90 of the Tariff Item attracting duty at the  rate of 30% ad valorem or whether it should be  classified under sub-heading 5703.20 attracting duty at  the rate of 5% ad valorem.  A detention memo issued  to the respondent stating that the goods lying in the  factory premises, specified in the schedule, were liable  for confiscation.  The respondent was ordered not to  dispose of the goods in question or otherwise deal with  or part with the same unless he heard in the matter to  the proper Central Excise Authority and a notice was  issued on 5.11.1996 to the respondent to show cause  as to why the goods should not be classified as stated  above.

       The respondent filed a writ petition before the  High Court of Andhra Pradesh challenging this show  cause notice and the detention order. On an earlier  occasion on similar adjudication, the appellate authority  had upheld the claim of the assessee. The High Court  proceeded on the basis that the appellate order had  become final and expressing agreements with the  same, quashed the notice.  The argument on behalf of  the appellant is that if the view of the High Court is  correct a classification cannot be reviewed and any  such classification once made cannot be reviewed even  if the earlier view is erroneous, and such a course  would result in great loss of revenue was not accepted  and allowed their petition and quashed the show cause  notice.  Hence this appeal.                  The matter relating to commodity classification  whether it falls under one heading or the other or  attracts higher or lower duty has to be decided on facts  arising in each case.  Even though, the decision may  have been taken earlier at one point of time but on

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 2  

further investigation discover new fact or the law has  changed, as is the stand in the present case, the  matter has to be re-examined.  It is not at all proper  for the High Court to interfere in such matters at the  stage of issue of the show cause notice.  We, therefore,  set aside the order made by the High Court and remit  the matter to the concerned authority for adjudication.   It shall be open to the respondent to file reply to the  show cause notice as they deem fit, if not already filed  within a period of one month from today or such  further time as may be allowed by the Adjudicating  Authority.  We direct the Adjudicating Authority to  dispose of the matter thereafter in accordance with  law.         The appeals are allowed accordingly.

CIVIL APPEAL NOS. 776/1999, 3568-3571/2000,  6270-6271/2000, 6447-6448/2000, 341- 344/2001, 4446/2001, 6198/2001, 1810/2002)

       In these cases also identical issue as arises in C.A.  6559-60/1997 fell for consideration before the Tribunal.   The Tribunal took the view that the decision rendered  by the Andhra Pradesh High Court earlier in the case of  M/s Charminar Nonwovens Ltd. would be applicable.  Inasmuch as we have set aside the order made by the  High Court and remited the matter to the Adjudicating  Authority, we follow suit in these cases and set aside  the order of the Tribunal and remit the same to the  Tribunal for consideration of the matter afresh in  accordance with law.