2009 (2) TMI 493 - AT - Central Excise

Classification - actual user condition - whether product being manufactured by the appellant is classifiable under heading 4008.21 or the fall under heading 4008.29 - assessee has explained that inasmuch as they were not sure about the use of their product in the overseas market they have classified it under heading 4008.29. they were availing modvat credit of duty in respect of export products and the exports were done under LUT and under the claim of benefit of DEPB, they claimed the classification under heading 4008.29 and no objection was ever raised by the Revenue. - held that - there is no evidence produced on record by the Revenue to establish that the sheets cleared by the appellant were actually put to some other uses, other than the one specified against the entry. The Revenue s entire case is based upon only one fact that the appellant have not been able to show that the sheets have actually been used for the specified purposes. - the product for domestic clearance has to be held as classifiable under heading 4008.21. order is accordingly set aside and appeal allowed decision in favour of the assessee.

Summary

Issues Involved:
1. Classification of Vulcanised Non-Cellular Rubber sheets under the appropriate tariff heading.
2. Requirement of end-use evidence for classification under heading 4008.21.
3. Relevance of export classification under heading 4008.29 to domestic classification.

Detailed Analysis:

1. Classification of Vulcanised Non-Cellular Rubber Sheets:
The primary issue in this appeal is whether the Vulcanised Non-Cellular Rubber sheets manufactured by the appellant should be classified under heading 4008.21 or 4008.29 of the Central Excise Tariff Act, 1985. Heading 4008.21 pertains to "Plates, blocks, sheets and strip of Vulcanised Non-Cellular Rubber, used in the manufacture of soles, heels or soles and heels combined, for footwear," while heading 4008.29 covers "others." The appellant contends that their product falls under heading 4008.21 since it is primarily used in the manufacture of footwear components.

2. Requirement of End-Use Evidence:
The adjudicating authority differentiated between the two sub-headings based on the actual use of the sheets. It was held that if the sheets are used in the manufacture of soles or heels for footwear, they should be classified under heading 4008.21. However, in cases where the end use is not established, the classification defaults to heading 4008.29. The appellant argued that the expression "used in the manufacture of" in heading 4008.21 should not necessitate proving the actual use for each clearance. Instead, it should suffice if the product is generally intended for and used in the footwear industry in most cases. The Tribunal agreed with the appellant, stating that requiring proof of actual use for each clearance is impractical and not mandated by the tariff entry. The expression should be interpreted to mean the intended or ordinary use of the goods.

3. Relevance of Export Classification:
The adjudicating authority also noted that the appellant classified the same sheets under heading 4008.29 for export purposes, suggesting inconsistency. The appellant explained that this classification was due to uncertainty about the end use in the overseas market and was done to avail modvat credit and other export benefits. The Tribunal accepted this explanation, stating that the classification for export purposes does not impact the classification for domestic clearances, which should be assessed independently.

Conclusion:
The Tribunal concluded that the Vulcanised Non-Cellular Rubber sheets manufactured by the appellant are classifiable under heading 4008.21 for domestic clearances, as they are of a kind used in the manufacture of soles and heels for footwear. The requirement to prove actual end use for each clearance was deemed unnecessary. The appeal was allowed, and the impugned order was set aside, granting consequential relief to the appellant. The Tribunal did not consider other grounds raised by the appellant, as the main issue of classification was decided in their favor.