2008 (9) TMI 673 - AT - Central Excise

Dipped Tyre Cord Warp sheets - Excisability - Scrap Tyre Cord Slicing - Strictures - Expunction of - Order of Appellate Tribunal - Scope of

Summary

Issues Involved:
1. Expunction of remarks made by the Tribunal.
2. Classification and duty liability of Processed Tyre Cord.
3. Classification and duty liability of Scrap Tyre Cord Splicing.

Issue-wise Detailed Analysis:

1. Expunction of Remarks Made by the Tribunal:
The first issue involves a miscellaneous application filed by the Special Counsel for Revenue, requesting the expunction of certain remarks made by the Tribunal in Misc. Order No. 32/2008. The remarks criticized the Revenue for not taking interest in pursuing appeals and not providing adequate assistance to the Tribunal. The Special Counsel argued that these remarks were made without following the Principles of Natural Justice and requested their removal. Upon careful consideration, the Tribunal concluded that the remarks were general in nature, made out of frustration due to repeated adjournments in high-revenue matters, and not directed against any specific individual. The Tribunal clarified that it did not question the professional commitment of the Special Counsels and rejected the miscellaneous application for expunction of the remarks.

2. Classification and Duty Liability of Processed Tyre Cord:
The second issue pertains to an appeal filed by the Revenue against an order by the Commissioner of Customs & Central Excise (Appeals), Hyderabad, which held that no Additional Duty of Excise (AED) was required on Processed Tyre Cord classified under Chapter Heading 59.06, and set aside the demand for AED. The Commissioner (Appeals) also upheld the classification of scrap of Dipped Nylon Tyre Cord Fabric under Chapter Heading 5902.90, confirming the demand for AED on the scrap. The Revenue contended that the processed tyre cord should be classified under Chapter Heading 5902, not 5906, and that the exemption under Notification No. 67/95 did not apply to AED. The Tribunal, upon review, agreed with the Revenue's contention, noting that the Supreme Court had remanded similar cases for reconsideration, and that the product was indeed excisable and marketable. The Tribunal remanded the matter for re-computation of duty liability, allowing for Cenvat credit on inputs used in the manufacture of the processed tyre cord.

3. Classification and Duty Liability of Scrap Tyre Cord Splicing:
The third issue involves an appeal by the party against the classification of 'Scrap Tyre Cord Splicing' under Chapter Heading 5902.90 and the confirmation of AED. The party argued that the scrap, arising from the rubberization process, was not covered under any tariff entry and could not be considered manufactured goods. They relied on case laws such as Premier Tyres Ltd. v. CCE and Dunlop India Ltd. v. CCE, which held that scrap rubberized fabric was not liable for excise duty. The Tribunal found merit in the party's arguments, noting that scrap waste is chargeable to duty only if there is a specific tariff entry or notification, which was absent in this case. Consequently, the Tribunal allowed the appeal and set aside the demand for duty on the scrap tyre cord splicing.

Conclusion:
The Tribunal addressed the issues comprehensively, rejecting the application for expunction of remarks, agreeing with the Revenue on the classification and duty liability of processed tyre cord, and siding with the party on the non-liability of duty on scrap tyre cord splicing. The detailed analysis and adherence to legal precedents ensured a thorough resolution of the disputes.