Page 79 - ELT_15th May 2020_VOL 372_Part 4th

2020 ] COMMISSIONER OF CENTRAL EXCISE, DELHI-III v. UNI PRODUCTS INDIA LTD. 469

57.03 Other carpets and other textile floor
coverings, whether or not made up
5703.10 Of coconut fibres (coir)
5703.20 Of jute
5703.90 Other”
4. Before the authority of first instance (Commissioner, Central Excise,
Delhi-III, Gurgaon), the respondent explained their manufacturing process in
course of hearing on the first two show cause notices. This is recorded in the or-
der of the Commissioner passed on 29th September, 2006. We reproduce below
that part from the said order :-
“……. Depending upon the variety of Moulded Car Carpets, the fibre i.e.
polyester/polypropylene is fed in opening and blending equipment’s, from
where it is transported to carding equipment’s. After carding, the same is
put for Needle punching. After needle punching, the fabric is then chemi-
cally treated in order to provide strength to the carpet fabric as per custom-
er requirement. After chemical binding, the fabric is laminated as per cus-
tomer requirement. The laminated fabric/impregnated fabric is then
moulded as per the requirement and trimmed to be fixed in the vehicle. Af-
ter trimming the Namda felt is fixed on the back of the carpet as per re-
quirement. Thereafter, the child parts as well as grippers are fixed wherever
required. The resultant product is the moulded car carpets which was clas-
sified under sub-heading 5703.90.”
(quoted from the order of the Commissioner)
5. The respondent’s argument that the Chapter Heading 5703.90 cov-
ered carpets and other textile floor coverings and they were manufacturing those
items only was rejected by the Commissioner. This plea, however, was subse-
quently accepted by the Tribunal.
6. Reference has been made before us to “Harmonized Commodity De-
scription and Coding System”, Explanatory Notes issued by the World Customs Or-
ganisation (2002). These Notes, termed HSN Explanatory Notes have been re-
ferred to by the Learned Counsel for both the parties. Strong persuasive value of
these Explanatory Notes has been recognised by this Court in the cases of CCE v.
Wood Craft Products Ltd. [(1995) 3 SCC 454 = 1995 (77) E.L.T. 23 (S.C.)], Collector of
Central Excise v. Bakelite Hylam [1997 (91) E.L.T. 13 (S.C.)], Collector of Customs v.
Business Forms Ltd. [(2005) 7 SCC 143 = 2002 (142) E.L.T. 18 (S.C.)] and Holostick
India Ltd. v. Commissioner of Central Excise [(2015) 7 SCC 401 = 2015 (318) E.L.T.
529 (S.C.)]. General Rules for the Interpretation of the Harmonized System lay
down the Principles of Interpretation for classification of Goods in the Nomen-
clature. Rule 3(a) thereof provides :-
“Rule 3(a). The heading which provides the most specific description shall
be preferred to headings providing a more general description. However,
when two or more headings each refer to part only of the materials or sub-
stances contained in mixed or composite goods or to part only of the items
in a set put up for retail sale, those headings are to be regarded as equally
specific in relation to those goods, even if one of them gives a more com-
plete or precise description of the goods.”
Clause 3(a) of the General Rules For the Interpretation of First Schedule to the
Central [Excise] Tariff Act, 1985 in cases where possibilities arise of a single item
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