M/S. BHOR INDUSTRIES LTD.versusTHE COLLECTOR OF CENTRAL EXCISE, BOMBAY

A                         MIS. BHOR INDUSTRIES LTD.                                   '
                                          II.

              THE COLLECTOR OF CENTRAL EXCISE, BOMBAY

                                OCTOBER 26, 1999
                                                                                      t~

B             [DR. A.S. ANAND, CJ., S. RAJENDRA BABU AND
                            R.C. LAHOTI, JJ.]


          Customs Tariff Act, 1985:

c          Chapter 59-Notification No. 63187 dated 1.3. 1987·-Appel/ant-
    Manufacturer of 'Laminated Textile Fabrics-Filing Classification List for
     'waste side strips and scrap for approval as non-excisable items-Ultimately,
    Tribunal held that item consisted of 'damaged and laminated fabrics liable
    to excise duty-Held, question of application of relevant notification and
    classification of items under sub-heading 5903.19 or 5903.29 can arise only
D   if the material was "laminated textile fabric" and was found to be "sub-
    standard or damaged"-/n the absence of any such finding, authorities
    below could not have proceeded to determine proper classification-Matter
    remitted to Assistant Collector for fresh disposal in accordance with law and
    in particular to determine whether the items answer the description of
E   "laminated textile fabrics", and, if so, the use to which the same were being
    actually put.

        CIVIL APPELLATE JURISDICTION : Civil Appeal No. 931 S of
    1994.

F        From the Judgment and Order dated 21.1.94 of the Central Excise and
    Gold (Control) Appellate Tribunal, New Delhi in A. No. E/57 of 1992-D.

         Joseph Vellapalli, J.M. PateL Manoj Wad and Ashish Wad for the
    Appellant.

G        T.L.V. Iyer, T.A. Khan and P. Parmeswaran for the Respondent.

         The following Order of the Court was delivered :

          The appellant, a manufacturer of Laminated Textile Fabrics, filed
    Classification List No. 1/86 for 'waste side strips and scrap' for approval as
                                                                                     'l
H                                       132
                         · BHOR INDUSTRIES LTD. v. C.C.E.                           133
    non-excisable items on the ground that there was no Entry dealing with waste           A
    and scraps in Chapter 59 of new tariff. In the adjudication proceedings for
    approval of the classification, the Assistant Collector of Central Excise classified
    both 'Foam Patty' and 'Scrap' as "finished final laminated fabric'', i.e., "rexin
-   fabric" till 28.2.1987 and thereafter as "damaged or sub-s~dard leminated
    fabric" till 1.5.1988, after which these were treated as "Chindies", though            B
    covered by the same sub-heading 5903. The appeal of the appellant having
    failed before the Appellate Collector, the matter was taken to the High Court,
    when the matter was remanded to the Appellate Authority, which in tum
    remanded it to the Assistant Collector. The Assistant Collector vide order
    dated 14.3.1991 issued on 18.3.1991, found that the product is nothing but
    "PVC laminated fabrics". It was accordingly ordered that the goods be classified       C
    as "PVC laminated fabrics under sub-heading 5903 .19 as "cotton laminated
    fabrics" and 5903.29 as "man-made laminated fabrics" upto 28.2.1987. The
    goods were later on directed to be classified under Notification No. 63/87
    dated 1.3.1987, as amended, as "damaged or sub-standard textile fabrics".

          The order of the Assistant Collector was put in issue before the Collector,      D
    Central Excise (Appeals). The Appellate Authority found that the products
    in question were "noting but damaged or sub-standard textile fabrics laminated
    with plastic". The items in question were, thus classified by the Appellate
    Authority under sub-headings 5903.19 and 5903.29, upholding the
    classification made by the Assistant Collector.                                        E
          The Appellant challenged the order of the Appellate Authority before
    the Customs, Excise and Gold (Control) Appellate Tribunal ("CEGAT"). It was
    the case of the appellants before the CEGAT that the products were not PVC
    laminated fabrics but were "waste strips" which were generated during the
    manufacture of the textile fabric and given the convenient name of "Foam               F
    Patty" for the purposes of identification. The CEGAT did not agree and vide
    an order, impugned before us, opined that "the items consist of damaged and
    laminated fabrics" and were liable to excise duty as such items. In para 9 of
    the order, the Tribunal also observed as follows:

           "The 'Foam Patty' as such can be used as laminated fabric for                   G
           manufacture of narrow width articles like handles of purses or shoe

J          straps etc., and even for manufacture of complete purses by stitching
           together square/rectlfngular pieces of smaller sizes. Such articles are
           seen being marketed regularly. As held by the Supreme Court, the
           Court has to take into consideration not only the facts on record but           H
     134                      SUPREME COURT REPORTS (1999) SUPP. 4 S.C.R.

A            also the facts of life. Further, the test report also clearly shows that
             the goods are laminated fabrics".

            We have heard learned counsel for the parties and perused the record
    including the invoices issued by the appellant on which reliance appears to
    have been placed by the Tribunal. In vain have we searched through the               •
B record to any basis for the factual finding recorded in para 9 (supra) by
    CEGA T. The finding appears to be based on some observations to the similar
    effect made by the appellate authority in its order. We have not been shown
    any material or evidence available on the record which could justify the
    observations of the appellate authority. That apart, we find that none of the
C authorities below have applied their mind and returned u specific finding
    whether the items in question could answer to the description of 'laminated
   ."textile fabrics'. The application of the relevant notification and classification
    of the items under sub-heading 5903.19 or 5903.29 can arise only ifthe material
    was "laminated textile fabric" and the same was found to be "sub-standard
    or damaged". A finding, was therefore, required to be arrived at, on the basis
D of the evideQce/material placed before the authorities below, that the items in
    question answered to the description of"laminated textile fabrics". The question
    whether such fabrics were sub-standard or damaged could only be considered
    after it was found as a fact that the material was "laminated textile fabric" and
    was being used in the manner observed by the Appellate Authority and
E CEGAT. In the absence of any such finding, the authorities below could not
    have proceeded further to determine proper classification . We refrain from
    addressing ourselves to find out the nature of the 'strips' or 'scraps' or 'foam
  ·patty' or their 'possible' use, as any expression of our opinion can prejudice
  ·the case of either party before the departmental authorities.

F           Under these circumstances, we do not find it possible to sustain the
      impugned order. Accordingly, we accept the appeal and set aside the impugned
    ' Order and remand the matter to the Assistant Collector for its fresh disposal
      in accordance with law and in particular to determine whether the items in
      question, answer the description of "laminated textile fabrics" and if so, the
      use to which the same were being actually put.
G
           The appeal is allowed in the above terms. No costs.

     RP.                                                           Appeal allowed.