1989 (7) TMI 109 - HC - Central Excise

Summary

Issues:
Classification of rubber-sheet manufactured by petitioners, refund of excess duty, legality of classification by Central Excise Authorities.

Analysis:
The petitioners sought a Writ of Mandamus challenging the classification of rubber-sheet manufactured by them by the Assistant Collector of Central Excise. They argued that their products should not be classified as cotton fabrics but under a different item in the Central Excises and Salt Act, 1944. The petitioners contended that the classification should follow the procedure laid down in Rule 173 of the Central Excise Rules, 1944. They also claimed refund of excess duty paid under protest due to the classification dispute.

The petitioners emphasized that the major constituent of their rubber-sheeting was rubber, and classification should consider this aspect. They argued that changes in Tariff relating to cotton fabrics did not cover their products and they were entitled to a refund of Central Excise duty. Multiple refund applications were made by the petitioners, which had not been disposed of in their favor, leading them to approach the Writ Court seeking relief.

On the other hand, the respondents contended that the petitioners' products were not simply rubber goods but cotton fabrics subjected to waterproofing and rubberization. They argued that the goods fell under specific tariff items in the Central Excises and Salt Act, 1944. The Central Excise Authorities maintained that they had acted in accordance with the law, and the petitioners' attempts to classify their products differently had no merit.

After detailed scrutiny of arguments from both parties and considering various notifications and classifications under the Central Excises and Salt Act, 1944, the Court found that the dispute centered around whether the petitioners' products should be classified under Tariff Item No. 16A(2) or Item No. 19(l)(b). The Court noted the cancellation of previous exemption notifications and the retrospective effect of the Central Excise Laws (Amendment Validation) Act, 1982, which impacted the grounds for claiming exemption from duty.

Ultimately, the Court ruled against the petitioners, stating that their products should be classified under Item No. 19(l)(b) of the First Schedule to the Central Excises and Salt Act. The Court found no merit in the petitioners' claims for exemption or refund, concluding that the steps taken by the respondents were lawful. Consequently, the Rule was discharged, all interim orders were vacated, and no costs were awarded.