BENGAL WATERPROOF WORKS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The present Rule was obtained by Bengal Water Proof Works Limited & Anr. praying inter alia for issuance of a Writ of Mandamus commanding the respondents to show cause as to why the classification of the rubber-sheet manufactured by the petitioners as approved by the respondent No. 4 the Assistant Collector of Central Excise, Calcutta-VI Division being No. 1/79 dated 16th August, 1980 with regard to rubber-sheets combined as cotton textiles and No. 1/80 dated 13th March, 1980 with regard to rubber-sheets combined with man-made fabrics should not be treated as a final classification of the said rubber-sheet and for further direction of disposal of the petitioners' several applications for refund of excess duty realized from them and for cancelling the directions of the respondents as contained in the letter No. C-37 dated 7th January, 1981 issued by the Superintendent of Central Excise and the communication dated 20th of January, 1981 of the Inspector of Central Excise, Range-V, Calcutta-IX Division and all proceedings thereto. It is alleged that of the several products manufactured by the Bengal Water Proof Works Limited, the petitioner No. 1, rubber-sheeting is manufactured of different qualities according to the purpose of the use. There are plain rubber-sheetings which are made entirely on rubber and there are also rubber-sheetings combined with other textile materials such as 'cotton textiles', 'rayon' or 'nylon textiles' and other textiles flax and hem. It is also stated that the proportion of rubber is used in these sheetings varies from product to product and depends upon the end use of the same. According to the petitioners some of the rubber-sheetings are sold directly for use in hospitals, nursing homes and for laying below the bed of invalid ailing persons. Such commodities are known in the trade and by the consumers as rubber goods and are not known as textiles. It is alleged that some of the respondents have been wrongfully attempting to classify the petitioners' products under the "Cotton Fabric" as contemplated in Entry No. 19 of the First Schedule to the Central Excises and Salt Act, 1944 with a view to claim excise duty from the petitioners in respect of the products of the petitioner No. 1 particularly with regard to those relating to rubber-sheetings. According to the petitioners, the rubber-sheeting manufactured by Bengal Water Proof Works Limited is properly classifiable under Item No. 16A(2) and it would be incorrect and wrong but classify the same in Item No. 19 of the First Schedule to the Central Excises and Salt Act, 1944.

(2.) The petitioners contend that a change was brought as to the definition of "cotton fabric" in the Tariff description and was restricted to cotton fabrics only and did not extend to any processing. In view of the said change on definition of cotton fabrics, the petitioners protested against the realization of excise duty on rubberised fabrics but in view of the Notification No. 39/68-Central Excise, dated 1st March, 1968 the petitioners were subjected to payment of Central Excise duties. The petitioners had to pay the same under protest.

(3.) Stating all these facts in details, the petitioners have come to this Writ Court on the ground that the classification of goods in accordance with any Tariff Item can only be approved in accordance with the procedure laid down in Rule 173 of the Central Excise Rules, 1944 by Proper Officer as contemplated therein. The classification of goods can only be approved in accordance with the procedure laid down in Rule 173B of Central Excise Rules, 1944 and in relation to rubber-sheeting manufactured by the petitioners, the same can only be done by the respondent No. 4 the Assistant Collector of Central Excise. The grievance of the petitioners is that the respondent No. 7 the Superintendent of Central Excise being obliged to accept the classification made by the respondent No. 4 the Assistant Collector of Central Excise with regard to rubber-sheeting manufactured by the petitioners, was not entitled in law to depend upon the Trade Notice No. 6/Rubber Cotton Fabrics-I/81 dated 8th January, 1981 issued by the respondent No. 3 the Collector of Central Excise, Calcutta and he was (not?) entitled in law to give any direction as contained in the letter No. C-37 dated 17th January, 1981.