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Indirect Tax Laws

Notes Apart from that, the Court noted that the point of rule 3, which had been argued by the
learned counsel for the Revenue, was not part of its case in the show-cause notice. It is well
settled that in Court, Revenue cannot argue a case not made out in its show-cause notice.
In the light of the above discussion, the Apex Court pronounced that the said carpets shall
be classified as jute carpets and note as polypropylene carpet.
*Note:
1. The Note 1 to Chapter 57 of the Excise Tariff is reproduced as below:-
"For the purposes of this Chapter, the term 'carpets and other textile floor coverings'
means floor coverings in which textile materials serve as the exposed surface of the article
when in use and includes article having the characteristics of textile floor coverings but
intended for use for other purposes."
2. Section Notes 2(A) and 14(A) of Section XI of the Central Excise Tariff Act, 1985 is set out
as follows:-
"2(A) Goods classifiable in Chapters 50 to 55 or in heading 5809 or 5902 and of a
mixture of two or more textile materials are to be classified as if consisting wholly
of that one textile material which predominates by weight over any other single
textile material.

"14(A) Products of Chapters 56 to 63 containing two or more textile materials are to
be regarded as consisting wholly of that textile material which would be selected
under Note 2 to this section for the classification of a product of Chapters 50 to 55 or
of heading 5809 consisting of the same textile materials.”
Note: The headings cited in some of the case laws mentioned above may not correlate with
the headings of the present Excise Tariff as these cases relate to an earlier point of time.

Source: http://220.227.161.86/20925frpubcd_bos1.pdf
3.4 Summary

 There are thousands of varieties of manufactured goods and all goods cannot carry the
same rate or amount of duty.

 It is also not possible to identify all products individually.
 The excise duty is chargeable at different goods at different rates.
 Trade Parlance Theory emerged out of case of Grenfell vs. IRC (1876), where Justice Pollok
concluded that nay word in statue should be interpreted (understood in its popular sense,
in which people understand it.

 The Central Excise Tariff Act was amended in 2004.
 HSN system define as excisable goods list in India and goods are classified systematically
following the footsteps of HSN.

 The CE Act 1944 does not provide any guidelines for classification of goods.
 Duty at ad valorem rates is charged on a wide range of excisable commodities.
 Valuation of such goods is governed by section 4 of the Central Excise Act, 1944, read with
the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000.

 In some cases, tariff value is fixed by Government from time to time. This is a “Notional
Value” for purpose of calculating the duty payable.

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