1996 (3) TMI 222 - AT - Central Excise

Summary

Issues:
Classification of products as Mosaic tiles and admissibility to exemption under Notification No. 55/86.

Detailed Analysis:

Issue 1: Classification of Products
The appeal challenged the order of the Collector of Central Excise (Appeals) regarding the classification of products claimed to be Mosaic tiles under Chapter 68 or Chapter 69. The Revenue argued that the goods should be classified under Chapter 69 based on the firing process after shaping, as per HSN explanatory notes. The Assistant Collector and Collector (Appeals) concluded that the products were fired after shaping, falling under Heading 69.05.00. The Respondent contended that the Revenue had accepted the products as Mosaic tiles in their appeal memo. The Tribunal had previously held in a related case that the products were Mosaic tiles based on commercial parlance. Collector (Appeals) also confirmed that the products were commercially known as Mosaic tiles based on trade documents and literature.

Issue 2: Interpretation of Chapter Notes
The Ld. Consultant argued that Chapter Note 2 of Chapter 69 restricts the chapter's coverage to ceramic products fired after shaping, but it does not mandate classification under Chapter 69. He pointed out that the word "ceramic" appears in both Chapter 68 and Chapter 69, and the HSN notes support the classification of ceramic products under both chapters. The Tribunal agreed with the Consultant's interpretation, emphasizing that the qualifying word "ceramic" alone is not determinative of classification.

Issue 3: Examination of Manufacturing Process
The products in question were made of stones and clay material, with a firing process after shaping. The Assistant Collector's observations regarding the manufacturing process were contested by the Consultant, who claimed that certain expressions used were not in the flow chart. However, the Collector (Appeals) made a clear finding on the stage at which the products were shaped and fired. The Tribunal upheld the Collector's finding, stating that the Revenue failed to produce evidence to dispute the conclusion. Without contrary evidence, the Tribunal accepted the Collector's determination that the firing occurred before shaping, aligning with Chapter 69 classification.

Conclusion
The Tribunal rejected the Revenue's appeal, upholding the Collector (Appeals) order regarding the classification of the products as Mosaic tiles under Chapter 69. The decision was based on the examination of the manufacturing process, commercial parlance, and the interpretation of relevant chapter notes and HSN explanatory notes. The absence of evidence from the Revenue to challenge the Collector's findings led to the Tribunal's decision to uphold the original order.