Ashok Bhan, J. - (1.)THE point involved in the present appeal is : -
"Whether the expression "insoles, midsoles and sheets thereof" used in the exemption Notification No. 20 of 1999 issued under the Customs Act, 1962 (for short "the Act") can be interpreted to mean that the sheets rolled up for the convenience of loading and transport, would disentitle the assessee from the benefit of the Notification?"
FACTS
(2.)APPELLANT is a partnership firm based in New Delhi dealing in the business, inter alia, of leather footwear materials and accessories. One of the items regularly imported by the appellant is "PU coated leather fabrics" which are extensively used in the leather footwear industry as "insoles and midsoles". This item was covered originally by Notification No. 224/85 and thereafter by the successor Notification No. 45/94. As on the date this item figures under the description "insoles, midsoles and sheets thereof" figuring in SI. No. 108 of List 3 (A) (3) in Notification No. 20/99 which replaced the earlier Notification. The same reads : JUDGEMENT_501_SUPREME3_2006Html1.htm JUDGEMENT_501_SUPREME3_2006Html2.htm
Before proceeding further it is relevant to mention that PU coated leather fabrics was the subject matter of a contested adjudication proceeding between the parties in 1995 in which the appellant sought to clear a consignment claiming the benefit of the Exemption Notification No. 45/94. A show cause notice was issued by the Customs Authorities at Chennai claiming that the goods were not classifiable as "insoles, midsoles and sheets thereof"; the said goods had no use in the leather industry and that the goods were capable of other uses and hence the end use requirement was not satisfied. The Commissioner of Customs, Chennai by a considered order dated 28/2/1995 held that the subject goods were indeed capable of use in leather footwear industry as insole material. It was further held that the capability of the goods for being used in the footwear industry having been proved, the Notification did not contemplate any end use restriction. Consequently, goods were accepted as "insole" and the benefit of Notification No. 45/94 was granted to it. This order of the Commissioner of Customs was cited with the approval by Eastern Bench of the Tribunal reported in Mod Apparel Exports Vs. CC Calcutta, 1996 (14) RLT 174 (CEGAT). This order of the Tribunal was upheld by the High Court of Calcutta in C.A. No. 1717 of 1995 - Tirupati Garments and another Vs. Union of India and others dated 11.6.1996. Thereafter, the appellant have been clearing several consignments of the same material and the department had permitted the clearance following the order of Commissioner which had become final since no appeal, review or revision had been preferred against it.

In February, 1996 another consignment imported by the appellant and cleared by the Customs Authorities at Chennai was seized by the new Delhi Preventive Wing when the goods were being unloaded at the appellant's Karol Bagh godown. The said seizure resulted in a fresh adjudication in Chennai wherein the Commissioner passed an order holding that the appellant had failed to establish actual use in leather industry and consequently denied the benefit of the Notification No. 45/94. This order was set aside and the case was remitted back for a fresh decision. The appellant participated in the fresh adjudication. After hearing the parties, the judgment was reserved by the adjudicating authority but according to the appellant the decision is still awaited.

(3.)APPELLANT received a consignment of PU coated insoles sheets for leather fabrics at Chennai in June, 1999. Revenue ("the respondent" herein) denied the benefit of the Notification No. 20/99. APPELLANT waived show cause notice and the personal hearing and placed submissions before the adjudicating authority based on the earlier imports by it and the order passed by the Commissioner therein. The adjudicating authority held that though the end use of the subject goods was established, but denied the benefit of the Notification No. 20/99 to the appellant on the ground that the subject goods were not "sheets" but "films" or "running sheets" and therefore, not entitled to the exemption from customs duty. For this adjudicating authority relied upon the judgment of this Court in Collector of Customs, Bombay Vs. M/s. K. Mohan and Company Exports, 1989 (2) SCC 337. Aggrieved by the above, the appellant preferred an appeal before the Customs Excise and Gold (Control) Appellate Tribunal, South Zone Bench at Chennai (for short "the Tribunal") which was numbered as C/457 of 1999 and that has been dismissed by the impugned order dated 25.4.2000. It has been held that the earlier decision of the Commissioner at Chennai in the adjudication arising in proceedings relating to the year 1995 was no longer valid in view of the later judgment of this Court in M/s. K. Mohan and Company Exports, (supra). The contention raised by the counsel for the appellant that the judgment in M/s. K. Mohan and Company Exports (supra) was distinguishable was rejected by observing that the finding recorded by the Apex Court in the said case in the context of description of goods in the Notification were para materia to the description available in the present Notification under consideration. Adverting to the finding recorded on the alternative submission of the counsel for the assessee in the said case it was observed.
"In the Apex Court judgment referred to, the term "sheets" and "sheetings" has been dealt with and the raw material was 'plastic films' in rolled form and the Apex Court after due consideration held that they are to be considered as "sheetings" and not 'cut to size'. It has been held that sheets has to be understood only with regard to the items which have been cut to size and not those in rolled form. In the present case also, admittedly, appellants have imported the material in length of 50 mtrs on the requirement of customers. They are themselves carrying out the activity of cutting to size before it is sold to customers for the purpose of manufacture of Insoles and Midsoles. The term "sheets thereof" should refer to the words 'which should have been cut to size' for the purpose of manufacture of 'Insoles and Mid Soles.' The words "thereof" has to be read along with the terms "In-soles and Mid soles". Where sheets has been imported in cut form and being utilized solely for the purpose of manufacture of in-soles and Mid soles, they go along with it in terms of the entire reading of the terms of the notification."

Learned counsel for the appellant strenuously contended that the impugned goods had been imported by the appellant in the form of "sheets" but for loading convenience; the sheets, being 50 metres long and the material being highly flexible, had been rolled up for loading, which did not detract from the facts that the goods were sheets in rolls. The Notification merely required the goods to be in the form of sheets in contradistinction to being cut in shapes and forms. There is no distinction between being in rolls or loose sheets. The judgment of this court in M/s. K. Mohan and Company Exports (supra) is distinguishable as in the said case subject goods were film rolls and the Court brought out the distinction between "films, foils and sheets" as well as the contrast between "sheets" and "sheetings". The said judgment has no applicability to the present case which on the other hand is directly covered by the judgment of the Tribunal in the case of Plast Fabs Vs. Collector of Customs, 1993 (66) ELT 441 wherein the Tribunal specifically dealt with "PVC flocked sheets in rolls". It was further contended that the issue as to whether the subject goods imported in rolls had already been the subject matter of several judicial pronouncements, some of them between the parties, were binding on the revenue as the same had attained finality.