2003 (12) TMI 132 - AT - Central Excise

Summary

Issues involved:
Classification of goods under sub-heading No. 3921.10 or Heading No. 94.04 of the Central Excise Tariff Act.

Analysis:

The judgment by the Appellate Tribunal CESTAT, New Delhi, involved the classification of goods manufactured by M/s. J.J. Foam P. Ltd. under sub-heading No. 3921.10 or Heading No. 94.04 of the Central Excise Tariff Act. The issue was whether the PU Foam sheets for mattresses, which were taped with cotton tape as packing, should be classified under Heading No. 94.04 as confirmed by the Commissioner (Appeals) or under sub-heading No. 3921.10 as claimed by the appellants. The appellant cited Trade Notice No. 4/1993 and a Board's Circular to support their classification under Heading No. 39.21. On the other hand, the learned SDR referred to previous Tribunal decisions to argue for classification under Heading No. 94.04. The Tribunal considered the submissions and previous decisions, including the case of Sheela Foams (P) Ltd., and noted that the PU Foam sheets, when cut to size of mattresses and affixed with industrial tape on the edges, became mattresses classifiable under Heading No. 94.04.

The Tribunal emphasized that the form in which the goods are cleared is relevant for classification and that the Trade Notice did not provide for mattresses to be classified differently under Heading No. 94.04. The decision also considered the clarification received from the Customs Cooperative Council regarding the classification of PU Foam sheets intended for use as mattresses. Based on the precedent set by previous decisions, the Tribunal concluded that the impugned product, being PU Foam sheets cut to size of mattresses with industrial tape on the edges, should be classified under Heading No. 94.04. The Tribunal upheld the duty demand but agreed with the appellants that no penalty should be imposed as they had regularly filed classification declarations, and the change in classification was made in good faith. Therefore, the penalty imposed on the appellants was set aside, and both appeals were disposed of accordingly.