These two appeals against the decision of the Customs
Excise & Service Tax Appellate Tribunal (CESTAT) rendered on
16th July, 2008 require adjudication on the question as to whether
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“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”. The appeals are against a common decision
and we shall also deal with both these appeals together in this
judgment. The respondent-assessee want their goods to be placed
under Chapter heading 5703.90. We shall refer to the specific
entries against this item later in the judgment. The respondent, at
the material point of time were engaged in the business of
manufacture of textile floor coverings and car matting. The
subject-goods have been referred to interchangeably by the
revenue also as car mattings and car carpets. The respondent, at
the material time, were clearing the goods declaring them to be
goods against Heading No.570390.90. Effective rate of excise
duty on goods under that entry was 8% and education cess at the
applicable rate for the subject period. We find this rate of duty,
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inter-alia, from the order of the Commissioner dealing with the
first and the second show-cause notices. The rate of basic excise
duty would have been 16% apart from education cess if these
goods were classified against goods specified in heading
no.8708.99.00. Altogether three show-cause-notices were issued
against the respondent over clearance of goods under the said
heading. These notices required them to answer as to why they
should not be charged the differential rate of duty and interest. We
would like to point out here that in the show-cause notices, the
respective chapter sub-headings have been referred to as
8708.99.00 and 570390.90 and in the order of the Tribunal also,
the sub-headings have been referred to as such. But the authorities
themselves in certain places described the sub-headings in shorter
numerical forms, as 5703.90 and 8708.00. We find these minor
variations in the paper-book. But this variation of the sub-
headings represented in numerical form is not of any significance
so far as adjudication of these appeals are concerned. The
respondent were also to answer as to why penalty should not be
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imposed upon them in terms of Section 38A of the Central Excise
Act, 1944 read with Rule 25 of the Rules made thereunder. The
first show-cause notice is dated 9th August, 2005 in regard to
clearance of goods made during the period between 9 th July, 2004
and 31st March, 2005. They had cleared altogether 8,65,777
pieces of those items in different sizes in that period. The second
show-cause notice was issued on 2 nd May, 2006 and related to
clearance of 12,02,482 pieces of the same goods for the period
between 1st April, 2005 and 31st January, 2006. The third show-
cause notice is of 7th March, 2007 and the clearance involved
20,15,412 pieces from 1st February, 2006 to 31st January, 2007.
For the period involved in the third show-cause notice, clearance
was made by the respondent under Chapter sub-heading
no.570500.19, which carried effective rate of duty @8%.