SC: Car matting comes within Chapter 57, First Schedule to CET Act, 1985

The Hon’ble Supreme Court, on 1st May 2020, in the matter of Commissioner Of Central Excise, Delhi-III v. M/S. Uni Products India Ltd. pronounced that “car matting” would come within Chapter 57 of the First Schedule to the Central Excise Tariff Act, 1985 under the heading “Carpets and Other Textile Floor Coverings” and not within Chapter 87 under the heading “Vehicles other than Railway or Tramway Rolling-Stock and Parts and Accessories Thereof”.

Question before the Hon’ble Supreme Court

Whether “car matting” would come within Chapter 57 of the First Schedule to the Central Excise Tariff Act, 1985 under the heading “Carpets and Other Textile Floor Coverings” or they would be classified under Chapter 87 thereof, which relates to “Vehicles other than Railway or Tramway Rolling-Stock and Parts and Accessories Thereof”.

Court’s observations

“The common parlance test”, “marketability test”, “popular meaning test” are all tools for interpretation to arrive at a decision on proper classification of a tariff entry. These tests, however, would be required to be applied if a particular tariff entry is capable of being classified in more than one heads. (Para 23)

Once the subject goods are found to come within the ambit of that sub-heading, for the sole reason that they are exclusively made for cars and not for “home use” (in broad terms), those goods cannot be transplanted to the residual entry against the heading 8708. (Para 26)

Copy of judgement: Judgement_01-May-2020

-Adv. Tushar Kaushik

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