1985 (4) TMI 295 - AT - Central Excise

Summary

Issues:
Classification of Friction Cloth under Tariff Item 16A(2) or Tariff Item 19(1)(b).

Detailed Analysis:

1. Background: The case involved M/s. Falcon Tyres Ltd., manufacturers of tyres and V-belts, who purchased cotton fabrics and rubberized them to create "Friction Cloth" for further use in manufacturing. The dispute centered around whether this Friction Cloth should be classified under Tariff Item 16A(2) as rubber products or under Tariff Item 19(1)(b) as cotton fabrics.

2. Initial Adjudication: The Assistant Collector of Central Excise classified the Friction Cloth under Tariff Item 19(1)(b) and demanded duty payment. This decision was upheld by the Collector of Central Excise (Appeals), leading to the appeal by the appellants.

3. Legal Proceedings: The appellants had previously filed a Writ Petition in the High Court seeking relief against the enforcement of the order but clarified that it did not bar the appeal's hearing on merits. The appeal proceeded with arguments from both parties.

4. Appellants' Argument: The appellants' consultant argued that the Friction Cloth should be classified under Tariff Item 16A(2) due to the predominance of rubber compound over cotton fabric, supported by Chemical Examiner's report and previous classification orders.

5. Respondent's Argument: The Senior Departmental Representative contended that as long as cotton content exceeded 40%, the goods should be classified under Tariff Item 19(1)(b), citing legal definitions and circular instructions supporting this classification.

6. Judicial Analysis: The Tribunal considered the nature of the goods, the Chemical Examiner's report, and legal precedents. It noted that the cotton content in the Friction Cloth was 47.1%, not meeting the predominance required under Tariff Item 19(1)(b).

7. Precedents Considered: The Tribunal distinguished previous cases cited by both parties, emphasizing that the facts of those cases differed from the present case, and the classification under Tariff Item 16A(2) was appropriate based on the current circumstances.

8. Conclusion: After careful consideration of arguments and legal provisions, the Tribunal ruled in favor of the appellants, classifying the Friction Cloth under Tariff Item 16A(2). The appeal was allowed, lower authorities' orders were set aside, and reclassification under Tariff Item 16A(2) was directed with consequential relief granted.