Page 83 - ELT_15th May 2020_VOL 372_Part 4th

2020 ] COMMISSIONER OF CENTRAL EXCISE, DELHI-III v. UNI PRODUCTS INDIA LTD. 473

13. The other order of Commissioner in connection with the third show
cause notice was passed on 5th January, 2007. The reasoning and conclusion of
this order was in the same line with the order passed on 29th September, 2006.
Thus, in both the orders the Commissioner sustained the directions for payment
rejecting the reply of the assessee and the orders charged on the respondent duty
differential and interest and also imposed penalty.
14. The two appeals of the respondent before the Tribunal were decid-
ed in their favour by a composite decision. This decision is assailed before us by
the revenue authorities in these two appeals. The Tribunal observed and held :-
“5.3 We find that Chapter 57 covers not only carpets but also other floor
coverings. What has to be considered is that between the terms ‘carpets and
other floor coverings’ the terms ‘parts and accessories’ which can be con-
sidered more specific. Even if the claim of the Department that at no stage
the carpets come into existence is accepted, it cannot be denied that the arti-
cle can be considered as other floor coverings meant for other application.
We also find that in the interpretative notes for Rule 3(a) in HSN, where by
way of an example, it has been clarified that “textile carpet identifiable for
use in motor cars to be classified not as accessories of motor cars in Head-
ing 8708 but in Heading 5703 where they are more specifically described as
carpets”. Though, in common parlance the impugned product may not be
considered as carpets, in view of the wordings of the chapter, the section
notes, chapter notes and the explanatory notes extracted above we are of
the considered opinion that the impugned goods is correctly classifiable
under chapter Heading 5703.90.90 as claimed by the assessee.”
6. The orders of Commissioner are set aside and the appeals are allowed
with consequential relief.”
15. Chapter Notes to Chapter 57 of the HSN Explanatory Notes, relat-
ing to carpets and Other Textile Floor Coverings are relevant for effective adjudi-
cation of these two appeals. The said Chapter Notes read :-
“Chapter Notes.
1. For the purposes of this Chapter, the term “carpets and other tex-
tile floor coverings” means floor coverings in which textile materials serve
as the exposed surface of the article when in use and includes articles hav-
ing the characteristics of textile floor coverings but intended for use for oth-
er purposes.
2. This Chapter does not cover floor covering underlays.
GENERAL
This Chapter covers carpets and other textile floor coverings in which
textile materials serve as the exposed surface of the article when in use. It
includes articles having the characteristics of textile floor coverings (e.g.,
thickness, stiffness and strength) but intended for use for other purposes
(for example, as wall hangings or table covers or for other furnishing pur-
poses).
The above products are classified in this Chapter whether made up
(i.e., made directly to size, hemmed, lined, fringed, assembled, etc.), in the
form of carpet squares, bedside rugs, hearth rugs, or in the form of carpet-
ing for installation in rooms, corridors, passages or stairs, in the length for
cutting and making up.

EXCISE LAW TIMES  15th May 2020  83