Full Judgment
The Ministry of Commerce vide their certificates dated 28.1.98 and 3.2.98 also clarified that this 'net' is required for the green house installed by them. The revenue contends that the item is in the form of 'woven polypropylene shade nets' and not 'plastic sheets' and their classification are also under different heading, Therefore, the benefit of notification cannot be extended to them.
2. We have heard Shri A. Jayachandran, Ld. DR. None appeared for the respondent despite notice sent by the revenue. Ld. DR reiterated the grounds raised in the memo of appeal.
3. On a careful consideration, we notice that the Commissioner (Appeals) has examined the matter in terms of notification and has held that the item satisfies the description in S.No. 144 in list 8 and is required for use in a green house. The requirement appellant has to produce a certificate from the Ministry of Commerce as per the requirement of the notification. The appellants have also produced a certificate from the Central Institute of Plastics Engineering and Technology which certified that the item maintains all the characteristic of a plastic net while at the same time retaining the characteristics of plastic sheet. The Commissioner also has noted from the catalogue that the item is described as woven polypropylene shade cloth. He has noted that the material is made of polypropylene -- a plastic, which is not other than a sheet and he has held that it is also in the form of net hence the benefit of notification cannot be rejected. He has also examined the term 'sheet' as appearing in McGraw Hill Dictionary of Scientific and Technical Terms (1974 edition), in which sheet is defined as 'a wide, thin and usually flexible piece of material'. The Chambers English Dictionary defines it as 'a large wide expanse or thin piece. As per the Customs Tariff Act, 1975, a sheet is defined as 'a bloc of regular geomatric shape' (as per note 10 to Ch.
39 and note 9 to Ch. 40). Therefore, the Commissioner (Appeals) Commissioner (Appeals) concluded that the term 'sheet' would refer only to the shape of an article and not as to whether it is solid or not, as it appears to be the reason for the lower authority's rejection. He has noted the understanding in common parlance also and held that when someone refers to a sheet it is not always with reference to a solid object (for example 'a sheet of water'). Therefore, he has concluded that since the material is woven in the form of a net it has to be held as a sheet only as it also understood as a 'sheet'. In this regard, he has referred to para 1651 of S. Sarkar's Words and Phrases of Excise and Customs (2nd edition), which refers to the term 'warpsheet' which states that it is Rayon Tyre Yarn arranged in parallel rows lengthwise and loosely held together by cotton threads running breadthwise. He has noted that even bed sheets are called so even though they are made of wooven yarn and are not in solid state. Hence, he has come to the conclusion that the term 'sheet includes even net and hence has extended the benefit of the said notification.
4. On a careful consideration, we notice that the respondents have produced a certificate from the Ministry of Commerce, New Delhi, certifying that the item is required for the green house and it specifies the terms of Notification No. 11/97. The Commissioner (Appeals) after due examination of the material on record has come to the conclusion that the sheet in the instant case is the shade cloth which is thin, flexible, and wide. We do not find any error in the order and the same is legal and proper, for the reason that the imported item has been specified in the notification in question for use in the green house and there is no dispute on that aspect.
Therefore there is no merit in the appeal and hence it is rejected.
Ordered accordingly.
5. I am not able to persuade myself to agree with the order recorded by my Ld. Brother Shri S.L. Peeran.
6. To understand the case, we have to go through the facts of this case. In this case M/s. Blossoms Biotech Ltd. had filed Bill of Entry No. 6989 dated 6.2.98 through their CHA M/s. Madras International Shipping, Madras for the clearance of 108 rolls of woven shade nets imported from USA. The importers submitted invoices to the original adjudicating authority issued by the supplier namely M/s. Pak Unlimited Inc. USA in connection with the subject importation. The assessable value was declared as Rs. 10,24,878. The importers at the time of filing the Bill of Entry classified the item as Woven Shade Nets falling under Customs Tariff Heading 5608.90 and claimed duty concession under Notification No. CN11/97 Sr. No. 144 List 8 where the rate of duty is 25% + 5% + 15% + 0.05%. The Custom Notification No. CN 11/97 at Sr. No. 144 exempts only Ultra Violet Retardant Fibre Glass/Plastic Sheets whereas the item under import is Woven Shade Nets which is defined in manufacturer's catalogue as Woven Polypropylene Shade Cloth and is different from plastic sheets mentioned in Notification No. CN 11/97. Even classification wise plastic sheets are classifiable under Chapter 39 whereas the item under import is classifiable under CTH 5608. There is also a mention of certificate obtained from the Director, Government of India, Ministry of Commerce, New Delhi which states that the imported goods are required for being used in Green House.
7. The item may be required for being used in Green House but the notification is very specific and it grants exemption only to Ultra Violet Retardant Fibre Glass/Plastic Sheets and not to all the items used in the Green House. This notification which is specific, grants concessional rate of duty only in respect of the specific item namely Ultra Violet Retardant Fibre Glass/Plastic Sheets whereas the item under import though usable in the Green House is only a Woven Shade Net and are not plastic sheet. The same is defined in manufacturer's catalogue as Woven Polypropylene Shade Cloth. Even classification wise plastic sheets are classifiable under Chapter 39 whereas the item under import was assessed on merit under CTH 5608.90 at the rate of 40% + 5% + 15% + 0.05% by the original authority denying them the benefit of Customs Notification No. CN 11/97. The catalogue also describes imported item as shade cloth and not a sheet. I also find that List No.8 read with Sr. No. 144 of Notification No. 11/97 allows concessional rate of duty only in respect of Ultra Violet Retardant Fibre Glass/Plastic. Sheets. Therefore I am of the considered opinion that the imported items are not eligible for concessional rate of duty under Custom Notification No. 11/97 and they have been rightly assessed to normal duty at the rate of 40% + 5% + 15% + 0.05%, by the original authority.
8. The subject item is Woven Polypropylene Shade Cloth which is highly stabilised against ultra violet rays and heat as per catalogue and it is in the form of net and cannot be considered sheet. Since net is woven material it is considered as textile article rightly classifiable under 5608.90. For classification purpose there is a distinct difference between net and sheet. Net is classifiable under 5608.90 whereas sheet is classifiable under Chapter 39 as article of plastic.
Therefore, if the notification refers sheet only, it means net is omitted. For applying notification we have to be very specific and see whether the subject item is listed therein. The Notification No. 11/97 covers only sheets and woven net of plastic cannot be covered by any of imagination and be called plastic sheets. Further it is a common knowledge that plastic sheets do not allow air to pass that is to say it has nil air permeability whereas the imported item is only a net which allows free flow of air.
9. Even if the imported item satisfy all the conditions of the Green House then also the importers are not eligible for concessional rate of duty under Notification No. 11/97 since the imported item is not Ultra Violet Retardant Fibre Glass/Plastic Sheets.
10. In view of the above discussion I set aside the impugned order passed by the Ld. Commissioner (Appeals) and restore the order passed by the Assistant Commissioner of Customs (Group 3 & 4) allow the appeal filed by the revenue. It is ordered accordingly.
In view of the difference of opinion, the following question arises for consideration by the third Member.
Whether the appeal is required to be rejected by upholding the Order-in-Appeal passed by Commissioner (Appeals) granting benefit of Sr. No. 144 in List 8 to the imported item in question as held by Member (J) in his order.
Whether the benefit of Sr. No. 144 in List 8 in the said notification is required to be denied to the importer in respect of the imported item and the revenue appeal is required to be allowed by setting aside the Order-in-Appeal and restoring the order passed by Assistant Commissioner (Group 3 & 4) as held by Member (T) in his order.
11. The conflict of decisions on the issue involved in this case between the Ld. Members of the regular Bench has brought up the matter before me as Third Member.
12. The appellant is the Revenue, represented by the DR. There is no representation for the respondent inspite of notice. It appears from the record of previous proceedings of the Tribunal in this case is that the respondents have never turned up to be personally heard inspite of notice. In the circumstances, there is no point in granting any further opportunity to them.
13. The relevant facts of the case have already been detailed in the orders recorded by Ld. Members of the regular Bench and the same need not be repeated. The short question which arises for consideration is whether the "woven shade nets" imported by the respondents and cleared under Bill of entry No. 6989 dt. 6.2.98 were eligible for the benefit of concessional rate of duty under the Customs Notification No. 11/97 dt. 1.3.97. The party had claimed the benefit in terms of item No. 144 of the Table annexed to the said Notification. As per this item No.144, goods specified in list '8' required for use in "green house" were chargeable to the concessional rate of 25% of Basic Customs Duty. List '8' contained 9 items of goods, one of which was "Ultra Violet retardant fibre glass/plastic sheets." 14. The original authority held that a 'net' could not be considered to be a 'sheet' and therefore the goods in question did not qualify for the benefit of the said Notification. The appellate authority below, however, was of the view that a net or woven fabric could be considered to be a sheet as well. That authority, in this behalf, relied on common parlance as well as meanings of 'sheet' as given in Dictionaries of the English Language and of Scientific and Technical Terms. While Ld.
Member (J) of the regular Bench agreed with the findings of the lower appellate authority, Ld. Member (T) endorsed the view taken by the original authority.
15. Ld. DR, arguing in support of the view taken by the Ld. Member (T), submits that the Exemption Notification requires to be strictly construed. Where the term used in the Notification was 'sheet'; the goods claiming the benefit of the Notification should also be 'sheet' and not net or woven fabric. Ld. DR relies on the Tribunal's decision in Controller of Telecom Stores v. CC Mumbai, 2001 (135) ELT 1079. The submissions of the DR are on the premis that the term 'sheet' has a meaning distinct from that of 'net'.
16. I have examined these submissions as well as the grounds raised in the appeal. The only substantial ground raised in the appeal is that a woven net of plastic could not be called a sheet of plastic, as it does not allow air to pass through. It appears from this ground that, according to the Revenue, the test for distinguishing a 'net' from a 'sheet' is air permeability. It is not discernible from the appeal as to on what basis such a test has been propounded by the appellant.
17. Ld. DR has fairly conceded the classification of the subject goods under sub-heading 5608.90 of the Customs Tariff Schedule. Thus the goods are admittedly within the coverage of chapter 56 of the Tariff Schedule. 'Sheet' has not been defined in the Notification, nor in Chapter 56 of the Tariff Schedule. Therefore, as Ld. Commissioner (Appeals) rightly did in this case, one has to gather the meaning of the word from extraneous sources. It is trite law laid down by the Hon'ble Supreme Court that common parlance will be determinative of classification of goods under the Central Excise and Customs Tariff Acts, where the statute does not provide definition or self-explanatory description of the goods. It appears that the lower appellate authority has understood "sheet" as it is known in the common parlance. The authority has also relied on the meaning given in English Dictionary.
After all, what is given in the dictionary is the meaning as understood, by and large, by intelligent common people. A sheet is understood by the common people as a large wide expanse used for spreading over an area. Sheets of asbestos or fibre glass are spread over a determinate area and constitute a roofing for the area. A sheet of fabric is spread over a bed and, then, it is called a bed-sheet.
These are the ways in which the common people understand a "sheet". The lower appellate authority has also usefully relied on S.B. Sarkar's "Words and Phrases of Excise and Customs". A copy of the 3rd edition of the book has been shown to me by Ld. DR, as required. It gives variant meanings of the word "sheet". One of these meanings is: "a large rectangular piece of cotton or other fabric". In the instant case, the Revenue has no quarrel with the fact that the goods in question is woven fabric of plastic. It should then come within the meaning of "other fabric" occurring in the definition of sheet given in Sarkar's book.
18. The meanings of the word "sheet" gathered from common parlance, dictionaries and Sarkar's glossary do not admit of the "air permeability" test of the appellant. Not only a solid expanse of material but a woven fabric of material can also very well fall within the meaning of the word 'sheet'.
19. The DR has relied on a decision of this Tribunal, wherein it was held that a Notification should be interpreted strictly on the basis of the words used therein leaving no scope for intendment. The word 'sheet' having not been defined in the Notification under reference in this case, it has to be construed on a reasonable basis as has been done by the lower appellate authority. The cited decision does not, in any way, confront this course adopted by the authority. In the result, the decision of the Commissioner (Appeals) requires to be upheld, and I do so. Ordered accordingly.
In terms of the majority order the impugned order is upheld and the revenue appeal is dismissed.