K.C.Agrawal, A.C.J. - (1.) This petition under Article 226 of the Constitution of India has been filed by M/s Kapir International (Pvt.) Ltd., New Delhi for quashing the show cause notice dated 14.10.1985, order dated 18.1.1988 passed by the Collector of Central Excise, Meerut and the order of the CEGAT dated 22.7.1985.
(2.) M/s.-Kapri International (Pvt.)Ltd. were licensed for manufacturing of excisable goods. They received processed fabrics from M/s DIOR International Private Ltd. a sister concern of the petitioner, on payment of Central Excise Duty. Such fabrics used to be converted into various other items namely, pillow covers, bed sheets, bed covers, table cloth, etc., falling under T.I. 68. Cotton double bed sheets, cotton single bed sheets, cotton top covers and cotton table linen, etc., were also manufactured by the petitioner company. The petitioner submitted a classification list dated 4.4.1984 desiring that the classification of pillow covers and Rajai covers be done under T.I. 68 and that they be allowed to avail exemption under notification No. 77/83 dated 1.3.1983 as amended by notifications Nos. 151/83 dated 13.5.1983 and 56/84 dated 1.3.1984. The classification list was objected to by the Superintendent, Central Excise and as such a representation was made to the Assistant Collector, Central Excise, who rejected the representation by his order dated 3.8.1984. The operative portion of his order runs as. follows: In consideration of all that has been said earlier I order that cotton double bed sheets (Printed), cotton single bed sheets (Printed), cotton tops (other than a made up item) and table linen shall be classifiable under T.I. 19 I(b) with liability to pay duty. The factory may, however, avail facility of proforma credit if admissible under Rule 56A of Central Excise Rules, 1944. The classification list shall be finalized and endorsed accordingly.
(3.) Against the said order, the petitioner preferred an appeal to the Collector, Central Excise (Appeals), New Delhi. The appeal was dismissed by the Collector on 8.1.1985 holding that bed sheets and table cloth are specifically covered within the definition of cotton fabric as given in T.I. 19, the effect of which was that duty was leviable under T.I. 19-I(b). The Collector also negatived the plea raised by the petitioner that the expression "any other process"' should take colour from the specific processes occurring in sub-item (b) by holding that the process of cutting and stitching could also be taken to be covered by sub-item (b). In substance, the Collector upheld the department's case that goods finally manufactured by the petitioner fell under item 19 by virtue of the fact that they were specifically covered under the definition of cotton fabrics and as such question of any double assessment did not arise in the case.;