COMMNR. OF CENTRAL EXCISE, JALANDHAR vs. M/S. RAJIV TEXTILE INDUSTRIES

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C.A. No.-007524-007525 - 2004Supreme Court15 April 20051 pages
For Petitioner: P. PARMESWARANFor Respondent: SANJEEV MALHOTRA
AI SummaryDismissed

What did the Supreme Court hold?

The Supreme Court held that the goods manufactured by the respondent were correctly classifiable under Chapter 52, not under Chapter 5911.90, following its earlier judgment approving a larger bench decision of the Tribunal.

What were the facts?

The respondent textile mills classified grey cotton canvas clothes and fabrics under Chapter 52, claiming nil excise duty. The Revenue Authorities contended they should be classified under sub-heading 5911.90, attracting duty. The mills later closed, and another entity started functioning from the same premises.

What were the issues?

The primary issue was the correct classification of grey cotton canvas clothes and fabrics for the purpose of central excise duty. This involved determining whether they fell under Chapter 52 or Chapter 5911.90 of the Central Excise and Tariff Act, 1985.

Which sections of the Income-tax Act were involved?

Chapter 52, sub-heading 5911.90

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 1 CASE NO.: Appeal (civil) 7524-7525 of 2004 PETITIONER: Commissioner of Central Excise, Jalandhar RESPONDENT: M/s. Rajiv Textile Industries & Anr. DATE OF JUDGMENT: 15/04/2005 BENCH: Ruma Pal, Arijit Pasayat & C.K. Thakker

JUDGMENT: J U D G M E N T RUMA PAL, J. During the years 1995-96, 1996-97 and 1997-98, the respondent Textile Mills cleared grey cotton canvas clothes and grey cotton fabrics, without payment of any central excise duty on the ground that the products were classifiable under Chapter 52 of the Central Excise and Tariff Act 1985 under which the rate of excise duty was nil at the relevant point of time. According to the Revenue Authorities the goods were classifiable under sub-heading 5911.90 of the Tariff and liable for central excise duty at the rates specified on the Tariff. A show cause notice was issued on 27th December, 2000 why central excise duty should not be recovered and why penal action should not be taken against the respondent. In the meanwhile the respondent- Textile Mills were closed down in September, 1997 and M/s. Moti Lal Traders started functioning from the same premises with the same machinery. The Additional Commissioner of Central Excise relying on the case of M/s. Simplex Mills Co. Ltd. Vs CCE Nagpur: 1993 (49) ECR 147 confirmed the demand of duty and also imposed personal penalty on the respondent and ordered interest on the delayed payment. Duty was also demanded from M/s. Moti Lal Traders and personal penalty as well as interest was levied. The respondent and M/s. Moti Lal Traders both (supra) and held that cotton fabrics which were not ’made up’ were correctly classifiable under Chapter 52 and not TH

59.

09 (subsequently numbered as 5911.09). The Tribunal dismissed the appellant’s appeal on the same ground. The decision in Jyoti Overseas Limited (supra) has been approved by this Court in our judgment dated 1st March, 2005 in C.A. Nos. 2816-2818/2002, Commissioner of Central Excise, Nagpur Vs. M/s. Simplex Mills Co. Ltd. We therefore hold that the goods manufactured by the respondent were classifiable under Chapter 52 and not under Chapter 5911.90 as contended by the Revenue. The appeals are accordingly dismissed.

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