2003 (3) TMI 181 - AT - Central Excise

Summary

Issues: Classification of pre-cured synthetic tread rubber under sub-heading 4008.21 or 4016.99.

In this case, the appellants challenged the order passed by the Commissioner of Customs & Central Excise, which classified pre-cured synthetic tread rubber under sub-heading 4008.21 instead of sub-heading 4016.99 as claimed by the appellants. The appellants, a Small Scale Unit, manufactured the goods and claimed exemption under Notification No. 175/86. The original authority demanded duty under a different sub-heading, leading to an appeal before the Commissioner (Appeals) and subsequently to the Appellate Tribunal. The main contention was whether the goods should be classified under sub-heading 4008.21 or 4016.99.

The appellants argued that the goods, made from moulding primary forms of unvulcanised rubber, should be classified under sub-heading 4016.99. They contended that the process of moulding changes the nature of the goods, making them unsuitable for classification under 4008.21. They cited relevant circulars and legal provisions to support their claim. On the other hand, the Revenue defended the classification under sub-heading 4008.21, emphasizing its specificity for tyre retreading material.

After considering the submissions and case records, the Tribunal analyzed the classification issue. The Commissioner had classified the goods under 4008.21, stating that the process of moulding did not change their identity as plates, sheets, or strips. However, the Tribunal noted that the goods were manufactured by moulding primary forms of unvulcanised rubber, a fact not disputed by the Revenue. Referring to a Board's clarification, the Tribunal highlighted that when rubber sheets are cut to shape or further worked, they should be classified under sub-heading 4016.99. Additionally, there was a clear exclusion of certain articles from Chapter 4008. Considering these factors and the principle of adopting a view favorable to the assessee, the Tribunal held that the goods should be classified under sub-heading 4016.99. Therefore, the impugned order was set aside, and the appeal was allowed with consequential relief, if any.