Case: C.C.E., Bhubaneswar-1 Vs. M/S. Champdany Industries Ltd

to (a) or (b), they shall be classified under the heading which occurs last in the numerical order among those which equally merit consideration." 45. From a perusal of the said Rules it appears that the dominant intention in the said Rule, especially clause (a) thereof is that the heading which provides the most specific description shall be preferred to the heading providing a more general description. 46. In the case in hand, following the said interpretation, the goods manufactured by the respondent-company are to be classified as jute carpet or jute floor coverings. 47. Clause (b) and Clause(c) of the said Rule 3 will apply only in those cases which cannot be classified under clause (a). Since in the instant case following the dominant intention of clause(a), the goods manufactured by the respondent-company can be classified, clause (b) and clause(c)of the said Rule need not be pressed into service. 48. Reference in this connection may be made to a three-Judge Bench decision of this Court in Commissioner of Central Excise, Nagpur Vs. Simplex Mills Co. Ltd. - (2005) 3 SCC 51 . In paragraph 11 of the said report, the purport of the said Rule has been discussed. While discussing the said Rule, this Court held that the Rule having been framed pursuant to the powers under Section 2 of the Central Excise Tariff Act, 1985 is statutory in nature. Learned Judges also made it clear that for the purposes of classification primacy should be attached to the section and chapter notes along with terms of the headings. If on application of Section and Chapter Notes, `no clear picture emerges then only can one resort to those rules. 49. In the instant case from the above discussion, it is clear from a perusal of the Chapter and Section Note, that the goods manufactured by the respondent-company can be classified as jute carpets/jute floor coverings. Thus, the argument on behalf of the Revenue cannot be accepted. 50. Apart from that, the point on Rule 3 which has 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 unless the foundation of the case is made out in the show- cause notice, Revenue cannot in Court argue a case not made out in its show-cause notice. {See: Commissioner of Customs, Mumbai Vs. Toyo Engineering India Limited - (2006) 7 SCC 592 , para 16. 51. Similar view was expressed by this Court in the case of Commissioner of Central Excise, Nagpur Vs. Ballarpur Industries Ltd. - (2007) 8 SCC 89 . In paragraph 27 of the said report, learned Judges made it clear that if there is no invocation of the concerned rules in the show-cause notice, it would not be open to the Commissioner to invoke the said Rule. 52. Learned counsel for the Revenue also relied on some judgments.53. It relied on the case of Oswal Agro Mills Ltd. and Ors. Vs. Collector of Central Excise and Ors. - 1993 Supp. (3) SCC 716. In that case the Court allowed the appeal filed by the assessee and did not accept the interpretation of the Revenue on `Toilet Soap. Learned judges relied on the age old principle that where the words of the statute are plain and clear, there is no room for applying any of the canons of interpretation which are merely presumption in cases of ambiguity in the statute. 54. Applying the said principle in the present case, we hold that the ratio in Oswal Agro (supra) does not at all advance the case of the Revenue. Apart from that the said decision was rendered under the old Tariff Act when there was nothing like Chapter Note and Section Note. Oswal Agro (supra) has no application here. 55. Learned counsel relied also on the decision of this Court in Novopan India Ltd, Hyderabad Vs. Collector of Central Excise and Customs, Hyderabad - 1994 Supp. (3) SCC 606. In that case, the Court interpreted the provision of Old Tariff Act with regard to exemption and held in paragraph 16 that a person invoking an exemption provision must establish clearly that he is covered by the said provision. In case of doubt or ambiguity, the benefit of exemption cannot be claimed by the assessee. 56. In the present case, those questions are not at all relevant as we are concerned with the provisions of the new Central Excise Act of 1985 which came into force on 22.2.1986 with Section Notes, Chapter Notes, Headings and sub-headings. Therefore, the ratio in Novopan (supra) has no relevance in the facts of the present case. 57. Learned counsel also relied on the decision of this Court in Hindustan Poles Corporation Vs. Commissioner of Cental Excise, Calcutta - (2006) 4 SCC 85 . In fact the judgment in that case does not at all advance the case of the respondent. In paragraph 39 of the judgment it has been held that the residuary entry is meant only for those categories of goods which clearly fall outside the ambit of specified entries and unless the Department can establish that the goods in question can, by no conceivable process of reasoning, be brought under any of the tariff items, resort cannot be had to the residuary item. 58. Following the said principle, as we must, in the instant case, the goods manufactured by the respondent-company fall clearly under the specified items as discussed above. 59. Revenue also relied on another decision of this Court in Kemrock Industries & Exports Ltd. Vs. Commissioner of Central Excise, Vadodara - (2007) 9 SCC 52 , for the purpose of essentiality test. As noted above, there is no whisper of the essentiality test in the show-cause notice. As no case of essentiality test has been made out in the show-cause notice, the same cannot be argued for the first time before this Court. As such the judgment in Kemrock (supra) on essentiality test is of no avail.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]37. Therefore, the mere fact that the surface of the carpet is polypropylene fiber, it does not cease to become jute carpet. So this Court is constrained to hold that this argument by the Revenue on the basis of surface or essentiality test is erroneous.