1992 (12) TMI 144 - AT - Central Excise

Summary

Issues Involved:
1. Classification of Rice Rubber Rolls under Central Excise Tariff.
2. Applicability of Notification No. 197/67-C.E., dated 29-8-1967 for exemption.

Issue-wise Detailed Analysis:

1. Classification of Rice Rubber Rolls under Central Excise Tariff:

The primary issue was whether Rice Rubber Rolls should be classified under sub-heading 4009.99 as "Other Tubes, Pipes and Hoses of Vulcanised Rubber" or under sub-heading 4016.99 as "Other Articles of Vulcanised Rubber."

- The Assistant Collector initially classified the goods under sub-heading 4016.99, stating that Rice Rubber Rolls are used for shelling rice in the rice milling industry and are known in the trade as "Rice Rubber Rolls," not as tubes or pipes. The Assistant Collector emphasized that tubes and pipes generally serve as conductors or conveyors of liquids, fluids, gas, and the like, which Rice Rubber Rolls do not.

- On appeal, the Collector (Appeals) reclassified the goods under sub-heading 4009.99, relying on prior decisions and evidence that similar goods had previously been classified as piping and tubing.

- The Revenue filed an appeal to the Tribunal, arguing that the correct classification should be under sub-heading 4016.99. The Tribunal carefully considered the arguments, evidence, and relevant case law, including the common parlance test, which determines classification based on how goods are identified by those dealing with them.

- The Tribunal concluded that Rice Rubber Rolls are known and marketed distinctly as Rice Rubber Rolls, not as pipes or tubes. The Tribunal emphasized that the goods' primary function, specific sizes, manufacturing process, and trade identification do not align with the characteristics of tubes, pipes, and hoses described in sub-heading 4009.99.

- The Tribunal held that the goods are classifiable under sub-heading 4016.99, as they are distinct commercial commodities with a specific function of shelling rice and are not used as conductors or conveyors of fluids.

2. Applicability of Notification No. 197/67-C.E., dated 29-8-1967 for Exemption:

The secondary issue was whether Rice Rubber Rolls qualify for exemption under Notification No. 197/67-C.E., which provides exemption to "piping and tubing of unhardened vulcanised rubber."

- The Collector (Appeals) had allowed the exemption, classifying the goods under sub-heading 4009.99. However, the Tribunal, having reclassified the goods under sub-heading 4016.99, examined the applicability of the exemption.

- The Tribunal noted that the exemption under the notification is specific to "piping and tubing," which the Tribunal had already determined Rice Rubber Rolls are not. The Tribunal also considered the manufacturing process and concluded that at no stage do pipes or tubes come into existence during the production of Rice Rubber Rolls.

- The Tribunal found that the goods do not qualify for exemption under Serial No. 3 of the Table appended to the notification, as they are not "piping and tubing designed to be, or converted in the factory of its production into component parts of machinery articles."

- The Tribunal referenced the decision in Precision Rubber Industries v. Collector of Central Excise, where aprons and cots were considered parts cut from piping and tubing. In contrast, Rice Rubber Rolls are not manufactured by cutting piping and tubing, thus not meeting the criteria for exemption.

Conclusion:

The Tribunal concluded that Rice Rubber Rolls are classifiable under sub-heading 4016.99 as "Other Articles of Vulcanised Rubber" and are not entitled to exemption under Notification No. 197/67-C.E., dated 29-8-1967. The order of the Collector of Central Excise (Appeals), Chandigarh, was set aside, and the appeals were allowed.