In Brief
The Supreme Court held that car mattings manufactured by the respondent should be classified under Chapter 57 (Carpets and Other Textile Floor Coverings), heading 5703.90 of the Central Excise Tariff Act, 1985, not under Chapter 87 (Parts and Accessories of Motor Vehicles). Though made specifically for use in vehicles, the HSN Explanatory Notes explicitly exclude textile carpets from classification as vehicle accessories and place them under Chapter 57. The Court rejected the revenue's argument that exclusive use in motor vehicles warranted classification as parts, reasoning that the tariff entry must reflect the goods' essential nature (textile floor covering) rather than their specific end-use. The Tribunal's decision in favour of the assessee was upheld and the revenue's appeals were dismissed.
The lawyer headnote and full judgment text are available to registered users.