1997 (12) TMI 679 - SC - Central Excise

Summary

The Supreme Court of India addressed the classification of a product known as "rubber cement" or "black vulcanising cement" in the case at hand. The key issue revolved around whether the product should be classified under Tariff Entry 40.17 as contended by the assessees or under Tariff Entry 40.05 as argued by the Revenue. The Tribunal had classified the product under Tariff Item 35.01 before February 10, 1987, and under Tariff Item 35.06 thereafter, a classification accepted by the assessees but challenged by the Revenue.The relevant Tariff Entries were examined, with Tariff Entry 40.05 pertaining to "Compounded rubber, unvulcanised, in primary forms or in plates, sheets or strip." On the other hand, Tariff Entries 35.01 and 35.06 related to albuminoidal substances, modified starches, glues, enzymes, and prepared glues and other prepared adhesives, respectively.The Tribunal considered the manufacturing process of the product and noted that the raw material used was classified by the Revenue under Tariff Entry 40.08, which referred to vulcanised rubber products. This led the Tribunal to conclude that since the raw material was vulcanised rubber, the product in question could not be classified as unvulcanised compounded rubber under Tariff Entry 40.05.The Court examined Chapter Note 3 of Chapter 40 of the Central Excise Tariff, which specified that the term "primary forms" applied to liquids, pastes, and various bulk forms. However, the Court found that this argument, along with any other arguments put forth by the Revenue, was not persuasive. The Court emphasized that if the raw material used was classified as vulcanised rubber by the Revenue, the resulting product could not be considered unvulcanised compounded rubber under Tariff Entry 40.05.As a result, the Court held that the Revenue failed to demonstrate that the product fell under Tariff Item 40.05. The Court also rejected the Revenue's contention that the Tribunal had erred in classifying the product under Chapter 35. Consequently, the appeals were dismissed with no order as to costs.In summary, the Court's decision centered on the correct classification of the product based on the nature of the raw material used in its manufacture. The Court's analysis focused on the specific Tariff Entries, the manufacturing process, and the classification of the raw material to arrive at the conclusion that the product could not be classified under Tariff Entry 40.05 as argued by the Revenue.