COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE AND ORS.versusM/S. CHARMINAR NONWOVENS LTD.

A        COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE
                          AND ORS.
                              v
               MIS. CHARMINAR NONWOVENS LTD.

                                  MAY 5, 2004
B
              [RAJENDRA BABU, CJ. AND G.P. MATHUR, J.]

           Central Excises and Salt Act, 1944-Classification of commodity--
    Levy ofduty-Issue olshow cause notice to assessee regarding classification
C   of goods by the awhority--Writ Petition-Appellate order on similar
    adjudication on earlier occasion upholding claim of assessee-High Court
    quashing the notice on the ground that the order of appellate authority had
    become final-On appeal, Held : High Court erred in inte1fering in such
    matters at the stage of issue of show cause notice-Such matter to be
D   decided on facts arising in each case view offi1rther investigation leading
    to discovery of new fact or chanf.e in law, matter to be examined-Hence,
    order of High Court set aside and matter remilled back to the concerned
    authority for adjudication-Constitution of India, 1950 Article 226.

E         Respondent-assessee was issued a detention memo stating that the
    goods lying in the factory premises were liable for confiscation and was
    also issued show cause notice regarding classification of goods.
    Respondent filed a writ petition challenging the show cause notice and
    the detention order. The appellate authority on similar adjudication
F   on earlier occasion had upheld the claim of the assessee regarding
    classification. High Court holding that the appellate order had become
    final and expressing agreements with the same, allowed the petition
    and quashed the notice. Hence the present appeals.

         Allowing the appeals, the Court
G
           HELD : 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 heen taken earlier at one point of time but on further
H   investigation discovery of new fact or the changed law, the matter has
                                         222
COMMR OF CUSTOMS & CENTRAL EXCISE v. CHARMINAR NONWOVENS LTD. [RAJENDRA BABU, CJ J   223

to be re-examined. It is not proper for the High Court to interfere in A
such matters at the stage of issue of the show cause notice. Therefore,
order of the High Court is set aside and the matter is remitted to the
concerned authority for adjudication. Also in the other appeals on the
identical issue, the order of the tribunal holding that the order of the
High Court is applicable is set aside and the matter is remitted back to B
it for fresh consideration. (224-D-F; 224-H; 225-AI

    CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 6559-
6560 of 1997.

     From the Judgment and Order dated 18.12.96 of the Andhra Pradesh C
High Court in W.P. Nos. 23945-46 of I996.

                                        WITH

     C.A. Nos. 776199, 3568-71, 6270-6271 6447-6448/2000, 341-344, D
4446, 6198/2001 1810/2002.

    Raju Ramachandran, Additional Solicitor General, M.
Chandrasekharan, S.K. Bagaria, Gauri Shankar Murthy, Ms. Smeeta L, Ms.
Vibha Makhija, Sanjiv Sen, B. Krishna Prasad, A. Subha Rao, Chandra
Mohan A., .Punit Dutt Tyagi, V. Lakshmikumaran, V. Balachandran, J.C. E
Gupta, Vinay Gupta, Ms. Bela Maheshwari, Rajesh Kuma,r, Sunil Kumar,
Himanshu Shekhar, Rupesh Kumar, Tara Chandra Sharma and Ms. Neelam
Sharma, for the appearing parties.

      The Judgment of the Court was delivered by                                           F
      RAJENDRA BABU, CJ.:

CIVIL APPEAL NOS.6559-6560 OF 1997

     In these matters the question for our consideration is whether Floor G
Coverings and Filter Fabrics are to be classified under sub-heading
No.5703.90 of the Tariff Item attracting duty at the rate of30% 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 H
    224                SUPREME COURT REPORTS [2004) SUPP. 2 S.C.R.

A   in the schedule, were liable for confiscation. The respondent was ordered
    not to dispose of the goods in question or otherwise deal witn 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 sJ10uld not be classified as stated above.

B         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,
C   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
D   notice. Hence this appeal.

          The matter relating to commodity class; 'ication 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
E   taken earlier at one point of time but on 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
F   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.

G         The appeals are allowed accordingly.

    CIVIL APPEAL NOS 776/1999, 3568-357112000, 6270-627112000, 6447-
    644812000, 341-344/2001, 4446/2001, 619812001, 181012002)

          In these cases also identical issue as arises in C.A. 6559-60/1997 fell
H   for consideration before the Tribunal. The Tribunal took the view that the
COMMR. OF CUSTOMS & CENTRAL EXCISE'· CHARMINAR NONWOVENS LTD [RAJENDRA BABU, CJ.]   225
decision rendered by the Andhra Pradesh High Court earlier in the case A
of M/s Charminar Nonwovens Ltd. would be applicable. Inasmuch as we
have set aside the10rder made by the High Court and remitted 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.
                                                                                          B
N.J.                                                               Appeals allowed.