1984 (6) TMI 220 - AT - Central Excise

Summary

Issues:
Classification of reclaimed rubber sheets under Central Excise Tariff - Item 16A(2) or Item 68.

Detailed Analysis:

1. Nature of Goods and Tariff Description:
The dispute centered around whether the reclaimed rubber sheets manufactured by the appellants fell under Item 16A(2) of the Central Excise Tariff or under the residuary Item 68. The appellants argued that their reclaimed rubber, being in the form of un-hardened plates and sheets, should be classified under Item 16A(2), citing specific wording and a Board's Tariff Advice. They contended that their reclaimed rubber was a product made from used rubber goods and thus should be considered a rubber product for excise duty purposes.

2. Historical Background and Contention:
The appellants initially denied that their reclaimed rubber sheets fell under Item 16A(2) but later contested the Department's classification under Item 68 when the duty rate increased. They argued that their industrial license description was irrelevant for tariff classification. The Department insisted that the reclaimed rubber sheets were merely raw material and not a product falling under Item 16A.

3. Department's Argument and Legal Interpretation:
The Department contended that the expression "Rubber Products" in Item 16A had a specific connotation, referring to products made from rubber rather than raw rubber material itself. They compared it to other tariff items like food products and iron or steel products. The Department emphasized that the reclaimed rubber sheets were not classified under Item 16A as they were raw material for manufacturing rubber products, not the products themselves.

4. Tribunal's Decision and Rationale:
The Tribunal analyzed the nature of the reclaimed rubber sheets based on the appellants' past statements and technical literature. Despite the manufacturing process, the Tribunal concluded that the reclaimed rubber sheets were raw material and not a product made from rubber. As there was no separate tariff entry for reclaimed rubber, the Tribunal held that the reclaimed rubber sheets were correctly classifiable under the residuary Item 68 of the Tariff. Therefore, the appeal was rejected.

In conclusion, the Tribunal upheld the classification of the reclaimed rubber sheets under the residuary Item 68 of the Central Excise Tariff, emphasizing the distinction between raw material and finished products in the context of tariff classification.