2008 (7) TMI 173 - AT - Customs

Classification of the items exported assessee urged that the items are only rubber compounded sheets falling under 4005 - department considered them as rubber mat and sought under Chapter 4016 it is not disputed that the goods are vulcanized, as this is evident from the test report and also from the report of the Rubber Board - under 4005, only unvulcanized rubber will come hence department claim for classification under Chapter heading 4016, is allowed

Summary

Issues Involved:
Correct classification of exported items - rubber compounded sheets or rubber mats under Customs Tariff.

Analysis:
The appeal involved the issue of the correct classification of items exported by the respondents, whether they are rubber compounded sheets or rubber mats under the Customs Tariff. The respondents argued that the items were rubber compounded sheets, while the department classified them as rubber mats under Chapter 4016. The Commissioner (A) set aside the original orders based on the decision of the Hon'ble Kerala High Court, stating that the items were rubber compounded sheets and not rubber mats. The Revenue challenged this decision on various grounds, including the interpretation of Chapter Note 9 of the Customs Tariff, which excludes articles cut to shape or further worked from certain headings. The Revenue argued that the items exported, being rubber mats cut to size and further worked, should not be classified under specific headings. They also contended that the items were vulcanized, making them ineligible for classification under Heading 4005, as per the report of the Chemical Examiner. The Revenue cited a previous tribunal order to support classifying vulcanized rubber articles under Heading 4016. They further argued that the specific tariff item 40169100 covered floor coverings and mats, supporting the classification under Heading 4016. The Revenue also emphasized that the issue of DEPB credit eligibility for rubber mats should be decided by the DGFT, not Customs, and criticized the Commissioner (A) for relying on the High Court judgment in the classification decision. The Revenue highlighted discrepancies in the Chemical Examiner's reports from different years to justify the change in classification. On the other hand, the respondents argued that Customs had historically classified the items under a different heading, and referred to the Kerala High Court's decision that vulcanization did not preclude an item from being considered a rubber sheet. The Tribunal ultimately upheld the Revenue's appeals, concluding that the goods were vulcanized rubber mats falling under Chapter 4016, not unvulcanized rubber under Chapter 4005, based on detailed examination and technical advice from the Rubber Board.

This comprehensive analysis of the judgment highlights the key arguments presented by both parties regarding the classification of the exported items, the relevant provisions of the Customs Tariff, the impact of vulcanization on classification, and the significance of previous tribunal orders and High Court decisions in determining the correct classification under the Customs Tariff.