1999 (10) TMI 679 - AT - Central Excise

Summary

Issues: Classification of Rubberised Cotton Hose Pipes, Eligibility for exemption under Notification No. 18/74.

Classification of Rubberised Cotton Hose Pipes:
The issue in this judgment revolves around the classification of Rubberised Cotton Hose Pipes, specifically agricultural and fire hose pipes. The appellants argued for classification under T1 16A(3) as unhardened vulcanized rubber pipes, while the Department classified them under T1 19.1(b) as 'Cotton fabrics subjected to rubberizing.' The test report described the product as a cotton hose pipe with a rubbery pink coating but did not confirm unhardened vulcanized rubber. The Collector ruled out classification under T1 16 due to market understanding and lack of evidence on the rubber lining. Relying on the decision of the Hon'ble Madras High Court, the Tribunal concluded that the product falls under T1 19.1(b) as rubberized cotton fabric, affirming the Department's classification.

Eligibility for Exemption under Notification No. 18/74:
The next issue addressed in the judgment is the eligibility of the product for exemption under Notification No. 18/74, which benefits goods manufactured without the aid of power. Evidence, including statements from the Rubber Technologist and Company Manager, confirmed the use of power for steering/mixing the rubber compound during manufacturing. As power was utilized in the production process, the product did not qualify for the exemption under the notification. Consequently, the Tribunal upheld the demand confirmation and the penalty imposed on the appellant, rejecting the appeal.

In conclusion, the Appellate Tribunal CEGAT, New Delhi, in the case concerning the classification of Rubberised Cotton Hose Pipes and eligibility for exemption under Notification No. 18/74, upheld the Department's classification under T1 19.1(b) based on the Madras High Court decision. Additionally, the Tribunal ruled that the product did not qualify for the exemption as power was used in the manufacturing process, affirming the demand confirmation and penalty imposition.