1984 (3) TMI 246 - AT - Central Excise

Summary

Issues Involved:
1. Scope of the benefit of Exemption Notification No. 197/67 dated 29-8-1967.
2. Classification of goods 'Aprons' and 'Cots' under the relevant Tariff Item.
3. Justification of retrospective demand for excise duty.

Summary:

Scope of Exemption Notification No. 197/67:
The main issue in this appeal is the scope of the benefit of Exemption Notification No. 197/67, particularly with reference to Sub-item (3) of the Table annexed thereto, vis-a-vis the goods manufactured by the appellants, bearing the trade name: 'Aprons' and 'Cots'. The notification exempts piping and tubing of unhardened vulcanised rubber from the whole of the duty of excise leviable thereon, provided they are designed to be, or converted in the factory of their production into component parts of machinery articles.

Classification of Goods:
The appellants argue that their products, 'Aprons' and 'Cots', are nothing but tubing of unhardened vulcanised rubber designed to be components of textile machinery and should be classified under T.I. 16A(3) and entitled to the benefit of Exemption Notification No. 197/67. However, the Collector held that these products are distinctly different from the tubing and piping from which they are made, and thus should be classified under T.I. 68. The Tribunal upheld this view, stating that the 'Aprons' and 'Cots' are finished manufactured products with a distinct trade name, character, and usage, and therefore, do not qualify for the exemption under the said notification.

Retrospective Demand for Excise Duty:
The appellants contended that the decision to classify 'Cots' and 'Aprons' under T.I. 16A(3) and accord the benefit of exemption was a well-considered decision of the Excise authorities, reiterated from time to time. However, the Department issued a show cause notice on 24-9-1980, proposing to classify these goods under T.I. 68 and recover excise duty retrospectively. The Tribunal found justification in the plea that the demand for recovery of duty retrospectively could not be sustained. It held that the demand for excise duty by reference to T.I. 68 for these products is enforceable with effect from the date of the show cause notice, i.e., 24-9-1980.

Conclusion:
The appeal is dismissed on merits, and the period of demand is modified to be enforceable with effect from 24-9-1980.