2004 (7) TMI 433 - AT - Central Excise

Summary

Issues:
Classification of Rubberised Nylon Tyre Cord Fabric (RNTCF) under Central Excise Tariff - Whether under Heading 5902 or 5906.

Issue 1: Classification of RNTCF under Central Excise Tariff

The appeal involved a common issue regarding the classification of Rubberised Nylon Tyre Cord Fabric (RNTCF) under the Central Excise Tariff. The primary question was whether the RNTCF should be classified under Heading 5902 as claimed by the Department or under Heading 5906 as claimed by the parties. The Commissioner's order referred to various Tribunal judgments and upheld the classification under Heading 5906.

Issue 2: Contradictory Views and Need for Referral to Larger Bench

The Revenue pointed out a contradictory view in the case of Good Year (India) Ltd. where the item was classified under Heading 5902. They argued that the matter should be referred to a Larger Bench to resolve the dispute due to conflicting judgments. The argument was supported by references to HSN Notes and Board's Circular No. 10/87-CX.

Issue 3: Arguments by Senior Counsel and Advocates

The Senior Counsel for the respondents argued that the processes carried out on the RNTCF did not result in the creation of new marketable goods. They contended that the RNTCF should not be reclassified under Heading 5902 after the processes. References were made to legal precedents such as Laminated Packaging (P) Ltd. v. CCE and Tega India Ltd. to support their argument.

Issue 4: Tribunal's Analysis and Decision

After considering the submissions, the Tribunal agreed with the Senior Counsel and Advocate that the previous judgments had not thoroughly examined the provisions of HSN Notes under both Heading 5902 and 5906. The Tribunal noted that the calendering process on the fabrics should fall under Heading 5906 according to the HSN Notes. Due to the conflicting judgments and the need for clarity on classification, the Tribunal decided to refer the matter to a Larger Bench for a definitive ruling.

Conclusion:

The Tribunal decided to refer all appeals to a Larger Bench to determine the correct classification of the RNTCF under the Central Excise Tariff. Despite arguments for considering the appeals on their merits without referring to the conflicting judgments, the Tribunal emphasized the importance of resolving the difference of opinion between the benches for judicial discipline. The decision to refer the matter to a Larger Bench was made to ensure a consistent and accurate classification of the product in question based on the relevant judgments.