Holding

The classification of a floor covering must be determined by the predominance by weight of the textile material in the whole product, and the tribunal’s factual findings on this test cannot be disturbed by the Supreme Court under Section 35(l)(b) of the Central Excise Act.

Summary

The Commissioner of Central Excise appealed against the classification of non‑woven floor coverings manufactured by M/s Uni Products (I) Ltd., which consist of a jute base fabric with a polypropylene exposed surface. The Revenue argued that the products should be classified under heading 5702.90 (synthetic floor coverings) whereas the assessee contended that, because jute predominates in weight, they fall under heading 5702.20 (jute floor coverings). The Tribunal held that the predominance test must be applied to the product as a whole, without excluding the base Hessian cloth, and affirmed the classification under 5702.20. The Supreme Court, noting that the Tribunal is the final fact‑finding authority and that Section 35(l)(b) of the Central Excise Act limits its power to disturb such findings, dismissed the appeal. Consequently, the classification under heading 5702.20 was upheld and the appeal was dismissed.

Issues considered

Whether the classification of floor coverings should be based on the predominance by weight of the textile material in the whole product.
Whether the base fabric (Hessian cloth) can be excluded for the purpose of the predominance test.
Whether the Supreme Court can interfere with the Tribunal’s factual findings under Section 35(l)(b) of the Central Excise Act.
Whether the nature of the exposed surface material determines the heading for classification.

Subjects

classificationcentral excisetarifffloor coveringpredominance testtextile materialjutepolypropylenetribunalSection 35CETA

Judgment

[2009] 14 (ADDL.) S.C.R. 199

__l COMMISSIONER OF CENTRAL EXCISE A
v.
M/S. UNI PRODUCTS (I) l TD. & ORS.
(Civil Appeal No. 3758 of 2006)
SEPTEMBER 8, 2009
8
[D.K. JAIN AND ASOK KUMAR GANGULY, JJ.]
...
Central Excise and Tariff Act, 1944 - Classification of
floor coverings under Heading 5702. 20 or 5702. 90 -
Assessee manufacturer of non-woven floor coverings made c
of jute - Authorities holding that textile material which
predominates in weight would determine the classification of
product and since jute predominated in weight over other
single textile material-polypropylene, floor covering
......
classifiable as floor covering of jute - However, the D
Commissioner demanding duty for a certain period - In
appeal, tribunal holding that predominance test of assessee's
products to be done taking the product manufactured by it as
a whole and not by separating the layers and base fabric-
hessian cloth not to be excluded - Interference with - Held: E
Not called for since tribunal is the last authority on fact and
• its findings is based on evidence.

CIVIL APPELLATE JURISDICTION : Civil Appeal No.
3758 of 2006.
F
From the Judgment & Order dated 30.9.2005 of the
Customs, Excise & Service Tax Appellate Tribunal, Principal
Bench, New Delhi in Appeal Nos. E/784, 1358-60/98-NB-Ex.

WITH
G
'¥
C.A. Nos. 4686, 5631, 5845 of 2006 and C.A. No. 5342 of
2007.

P.P. Malhotra, ASG, Madhurima Tatia, S.K. Dubey, V.
199 H
200 SUPREME COURT REPORTS [2009] 14 (ADDL.) S.C.R.

A Dalmia, B. Krishna Prasad for the Appellant. >--
,..
V. Lakshmi Kumaran, Alok Yadav, M.P. Devanath, Rupesh
Kumar, Pankhuri Shrivastava for the Respondents.

The Judgment of the Court was delivered by
B
GANGULY, J. 1. This judgment deals with Civil Appeal
Nos.3758/2006, 5631/2006, 4686/2006, 5845/2006 and 5342/
,>.
2007.

2. It appears that in all these appeals, the respondents are
c manufacturing non-woven floor coverings where the basic fabric
is jute, but the case of the appellant is thatthe exposed surface
is made of synthetic textile material like polypropylene felt or
polypropylene fiber and as such these goods cannot be
classified as non-woven jute floor coverings. --(
D
3. In the case of Civil Appeal No.3758 of 2006, the show-
cause notice was issued on 5.5.1997 and the case of the
Revenue as set out in paragraph No. 6.8 of the show-cause
notice is as follows:
E
" ...... Therefore, it appears that the said textile floor
coverings are classifiable as 'other textile floor coverings'
under sub heading 5703.90 of CETA leviable to duty@
30% Adv. and not as floor coverings of jute under sub
-·
heading 5703.20 of CETA ...... "
F
4. The case of the respondents-company as disclosed in
the counter affidavit is that it has relied on a technical opinion
given by Prof. P.K. Banerjee, who has the experience of
research in non-woven textile material and he has given his
G opinion of the products manufactured by the respondents-
company to the effect that the products which are manufactured
by the respondents-company cannot be classified as floor
coverings with piled or looped surface.

5. In the reply to the show-cause notice given by the
H
COMMISSIONER OF CENTRAL EXCISE v. UNI 201
;
~RODUCTS (I) LTD. [ASOK KUMAR GANGULY, J_.J
', -l respondents-company, they have relied on the said opinion of A
Prof. P.K. Banerjee, a Professor in the Indian Institute of
Technology, who visited the factory of the respondents and
examined the manufacturing process of the varieties of carpets
in question and gave the said opinion.
8
6. The Revenue before us also did not dispute the
correctness of the said opinion.

7. The learned counsel for the respondents-company also
relied on an Order-in-original No.69/89 dated 29/12/1989
passed by the Collector, Central Excise, New Delhi as also the c
findings recorded in the said order. The relevant portion of the
said order is as below:

"Chapter-Note (1) of Chapter 57 will not determine the fact
,.. -... that floor covering is floor covering of jute or polypropylene. D
The said Chapter Note describes and defines the floor
covering. Section Note (4) and (14) has to be necessarily
considered for this purpose. It is an admitted position that
the top surface (exposed surface) does not have a pile or
loop surface and hence Clause (b) of Section Note 14
E
does not apply. Hence in terms of Clause (a) to Section

.. >-
Note 14 whichever textile material predominates in weight
that will determine the classification of the product. Since
admittedly jute predominates in weight over other textile
material, namely, polypropylene goods are classifiable
F
only under heading 5702.20 and the classification already
... approved does not require any change."

8. In the ultimate finding in the said order the Adjudicating
Authority came to the following conclusion:
G
" .... In the background of these facts, it would be seen that
the party's contention based on Chapter Note(1) of
Chapter 57 and Sec. Note (2) and (14) of Sec. XI that floor
coverings are classifiable under 5702.20 is correct. The
show cause notice says that polypropylene constitutes
H

'-
202 SUPREME COURT REPORTS [2009] 14 (ADDL.) S.C.R. /

"·
;

A exposed surface and hence floor covering of the party J._ '

should come under 5702.90 and not 5702.20, in spite of
the fact that polypropylene is not a predominating textile
but jute alone is predominating textile material. This point
made in the show cause notice is without force and is not
B legally correct. As contend~d by the party Chapter Note
(1) of Chapter 57 is relevant only for deciding whether the -
product is covered by the expression "carpet and other j.
textile floor coverings". This Chapter Note cannot and does
not decide the further question as to whether the product
.c is floor covering of jute or polypropylene. It only says that
if the exposed surface of the article textile material·, the
product is treated as carpet and· other textile floor
coverings. To say that because exposed surface is
polypropylene the product would be treated as floor
covering of polypropylene would be a total misreading of --r ....
D
Chapter Note(1). On the other hand, as rightly pointed out
by the party, the question as to whether the product is floor
covering of jute or floor covering of polypropylene can be
decided only in terms of Sec. 14(a) of Sec. XI read with.
Sec.(2) of Sec. XI. Stated briefly these section notes
E provide that products containing two or more textile
materials would be regarded as consisting wholly of that
one textile material which predominates by weight over any
-./:
.....
other single textile material. As already stated it is an
indisputed position that the textile material jute
F predominates by weight over other textile material used in
the floor covering namely polypropylene. Hence the floor
covering cleared by the party can be classified only under
5702.20 and not under 5702.90. Thus on the merits of
classification of floor covering, party's contention alone
G represents the correct interpretation and the classification
y
already approved by the Assistant Collector is hereby
affirmed and confirmed."

9. Strong reliance was placed by the respondents on the
H · said finding by the adjudicating authority and the learned

.>
COMMISSIONER OF CENTRAL EXCISE v. UNI 203
PRODUCTS (I) LTD. [ASOK KUMAR GANGULY, J.)
.. _l counsel for the Revenue could not point out anything to the A
contrary.

1O. Learned counsel for the respondents submitted that
despite the aforesaid finding, the present show-cause is wholly
unnecessary. B
11. However, in the said show-cause proceedings the
Commissioner ultimately dropped all penal proceedings and
also the duty demand for the period beyond six months.

12. Ultimately, the matter rested when the appeal was filed c
before the Tribunal by the assessee and the tribunalin its order
dated 30.9.2005 held as follows:

" ... .It is seen from the manufacturing process as

. "" explained by the learned advocate that the carpet is
manufactured in a qontinuous process and the said carpet
D
is to be considered as of one identity rather than as having
separate identity of having a exposed surface and under
surface. The tacking of the fibers of polypropylene and jute
to be further needle punched into Hessian cloth brings into
existence one commodity that is carpet." E

)< 13. The tribunal after discussing the Chapter Notes, Sub-
headings and also the Section Notes returned a finding that the
classification should be done on the basis of the predominance
test, that is to say, on the basis of textile materials which F
predomin~te by weight over other single textile material._

14. The tribunal noted that before the adjudicating
authorities it has been claimed that the carpets manufactured
by the appellants has jute contents of 75% to 85% and the
tribunal noted that "the revenue has not disputed this". G

15. After opining as above, the tribunal went on to discuss
the second question, namely, whether the Hessian cloth has to
be separated for the purposes of the predominance test or
not? H
204 SUPREME COURT REPORTS (2009] 14 (ADDL.) S.C.R.
...
A 16. After discussing the matter in detail, the tribunal came ,i.. ,;
to a finding that while determining the predominance test, it
would not be permissible to exclude base fabric (Hessian
cloth).

17. The tribunal came to the conclusion that the
B
predominance test of the assessee's products has to be done
taking the product manufactured by it as a whole and not by
separating the layers and then applying the pr~dominance test. j..

18. The tribunal also noted that the revenue's reliance on
c a single dealer's statement indicating that the assessee's jute
carpets are known in the market as "Synthetic carpet" is of no
consequence especially when such statement is not
substantiated by any evidence.

D 19. It is well known that the tribunal being the last authority -y
on fact, it is not proper for this Court, in exercise of its power '--
under Section 35 L(b) of the Central Excise Act, 1944, to disturb
such findings of the tribunal since such findings are based on
evidence.
E 20. For the reason~ ~;.:;c,ussed above, we find no merit in
this appeal. The appeal is dismissed.
. -'(
21. Since the same questions are involved in the other •
appeals with slight factual modification, those appeals for the
F reasons discussed above and also for the reasons given in
Civil Appeal No.7075-7076 of 2005 are also dismissed.
....
22. There shall be no order as to costs.

N.J. Appeals dismissed.
G