2000 (10) TMI 132 - AT - Central Excise

Summary

Issues involved:
Classification of criss-cross patches of vulcanised/unvulcanised rubber under different sub-headings of the Central Excise Tariff Act.

Detailed Analysis:

1. Issue of Classification - Vulcanised Rubber Patches:
The appeal questioned the classification of criss-cross patches of vulcanised rubber under Sub-heading No. 4008.21 or 4006.90. The appellant argued that the patches did not fit the criteria of Sub-heading 4006.10 as they were not in running length like other products listed under that sub-heading. Referring to a previous case, the appellant contended that unless a product is specifically mentioned in Sub-heading 4006.10, it should be classified under Sub-heading 4006.90. The appellant emphasized that the patches had least resemblance to specified products and were not bought or sold as such, hence should be classified under Sub-heading 4006.90.

2. Issue of Classification - Unvulcanised Rubber Patches:
Regarding the classification of unvulcanised rubber patches, the appellant argued that they should not be classified under Sub-heading 4006.10 as they were not in the form of plate, sheet, or strip. The appellant referenced a Tribunal decision to support their argument. The appellant also highlighted that the HSN Explanatory Notes did not exclude patches used for repairing tires under Heading 40.16, and therefore, the unvulcanised rubber patches should be classified under Sub-heading 4006.90.

3. Counter-Argument by Revenue:
The Revenue reiterated that Sub-heading 4008.21 applied to plates, sheets, and strips of vulcanised rubber, including blocks, rods, and profile shapes. They emphasized that the impugned product should be classified under Sub-heading 4008.21 as it was further worked and fit for resoling or repairing tires. The Revenue also drew support from Board Circulars to strengthen their argument.

4. Judgment on Classification - Vulcanised Rubber Patches:
The Tribunal found merit in the Revenue's submissions, stating that Heading 40.08 covered not only plates, sheets, or strips but also profile shapes. Note 9 to Chapter 40 clarified that the expressions 'plates', 'sheets', and 'strips' also applied to blocks of regular geometric shape. The Tribunal concluded that the criss-cross patches of vulcanised rubber should be classified under Sub-heading 4008.21 and not under Sub-heading 4016.99.

5. Penalty Imposition:
The Tribunal agreed with the appellant that no penalty should be imposed under Rule 173Q of the Central Excise Rules and Section 11AC of the Act as the issue pertained to product classification. The Tribunal remanded the matter of classifying criss-cross patches of unvulcanised rubber back to the Commissioner (Appeals) for a well-reasoned order, emphasizing the principles of natural justice.

6. Conclusion:
The appeal was disposed of with the decision that criss-cross patches of vulcanised rubber were classified under Sub-heading 4008.21. No penalty was imposed, and the matter of classifying unvulcanised rubber patches was remanded for further review.