2003 (9) TMI 443 - AT - Central Excise

Summary

Issues involved:
Classification of goods manufactured by M/s. Sheela Foam Pvt. Ltd. under sub-heading No. 3921.10 or Heading No. 94.04 of the Central Excise Tariff.

Detailed Analysis:

1. Classification Issue:
The appellant, M/s. Sheela Foam Pvt. Ltd., claimed that the goods they manufacture, including PU Foam sheets and cushions, should be classified under sub-heading 3921.10 of the Tariff. The appellant argued that since the PU Foam sheets are cleared from the factory without any textile covers, they should be classified under sub-heading 3921.10. The appellant relied on clarifications issued by the Central Board of Excise & Customs and the Meerut Commissionerate to support their classification claim.

2. Legal Interpretation - Appellant's Arguments:
The appellant's advocate contended that the impugned goods should be classified under Heading 39.21 even if they are used as mattresses after covering them with textile material. Reference was made to Note 10 to Chapter 39 of the Central Excise Tariff to support the classification under Heading 39.21. The advocate highlighted the absence of statutory definitions and emphasized the form in which the goods are cleared for classification purposes.

3. Counter-Arguments by Respondent:
The learned SDR argued that the products manufactured by the appellant fall under Heading 94.04, which specifically covers mattress support and articles of bedding. Citing a Supreme Court case, the respondent emphasized that the primary function and utility of the product determine its classification. The respondent also referred to a previous decision by the Tribunal in the appellant's own case, where PU Foam sheets cut to size of mattresses were classified as mattresses under Heading 94.04.

4. Tribunal's Decision and Analysis:
The Tribunal considered the submissions from both sides and noted that PU Foam sheets cut to size of mattresses with industrial tape affixed on the edges were classified as mattresses under Heading 94.04 in a previous decision involving the appellant. The Tribunal emphasized that the form in which the goods are cleared is crucial for classification. Following the earlier decision and the clarification from the Customs Cooperative Council, the Tribunal held that products with industrial tape affixed on the edges are classified as mattresses under Heading 94.04, while products without tape remain under Heading 39.21.

5. Remand and Duty Recalculation:
The Tribunal remanded the matter to the Jurisdictional Adjudicating Authority to recompute the duty based on the classification ordered in the judgment. It was specified that the assessable value should be re-determined treating the price as cum duty price. The decision referenced precedents from the Larger Bench of the Tribunal and the Supreme Court for guidance on duty computation.

In conclusion, the Tribunal disposed of the appeal by clarifying the classification of the goods manufactured by M/s. Sheela Foam Pvt. Ltd. and providing instructions for re-computing the duty amount in accordance with the classification determined in the judgment.