1996 (9) TMI 212 - SC - Central Excise

Whether Aprons and cots did not fall under Item 16A ? Held that - Aprons and cots being cut pieces of long lengths of tubes or pipes are outside the scope of Item 16A; piping and tubing , as used therein, refers to lengths of pipes or tubes. The said exemption notification dated 29th August, 1967 applies to piping and tubing of unhardened vulcanised rubber that falls under sub-item (3) of Item 16A. The sweep of the exemption notification cannot be increased by the Court to cover goods that do not fall under Item 16A. The judgment in the case of Jain Engineering Co. 1987 (9) TMI 46 - SUPREME COURT OF INDIA dealt with an exemption notification that gave to articles mentioned in column (2) of the Table thereof and falling under Heading 84.06 exemption from payment of a certain portion of customs duty. Column (2) of the Table mentioned internal combustion piston engines and parts thereof. Heading 84.06, however, referred to internal combustion piston engines but not to parts thereof. The Court declined to accept the contention of authorities that the benefit of the exemption notification could not be given to parts of internal combustion piston engines because parts were not covered by Heading 84.06. To do so, it said, would be to amend the exemption notification, which the Court would not do. Appeal dismissed.

Summary

Issues:
1. Classification of "aprons" and "cots" under Tariff Item 16A or residuary Tariff Item 68.
2. Application of exemption notification to the classification of goods.

Detailed Analysis:
The judgment by the Supreme Court involved an appeal concerning the classification of "aprons" and "cots" manufactured by the appellants, which are components of textile machinery. The appellants initially paid excise duty under Tariff Item 16A but later claimed exemption based on a notification issued in 1967. A subsequent notice in 1980 reclassified the goods under the residuary Tariff Item 68. The Collector of Central Excise upheld this reclassification, leading to an appeal to the Tribunal, which limited the demand to the date of the show cause notice. The key contention was whether the goods fell under Item 16A or Item 68, impacting the excise duty liability.

The appellant argued that "aprons" and "cots" should be classified under Item 16A as "piping and tubing of unhardened vulcanised rubber," thereby excluding the application of the residuary Item 68. Reference was made to a previous judgment where the Court held that items falling under specific tariff entries should not be shifted to the residuary item unless they clearly do not fit within any specific entry. The Court emphasized that the specific wording of the tariff entry should be considered in determining the classification of goods.

Moreover, the appellant sought to extend the benefit of an exemption notification to the goods, contending that they were designed to be converted into component parts of machinery and did not convey air, gas, or liquids. Citing a previous case, the appellant argued that exemption notifications should be interpreted broadly to include parts related to the main product mentioned in the notification.

On the other hand, the excise authorities argued that the wording of Item 16A(3) referred to large lengths of piping and tubing, excluding small parts like "aprons" and "cots." They highlighted the specific mention of smaller parts in other sub-items of the tariff entry. The authorities emphasized that the exemption notification applied to piping and tubing intended for machinery components under Item 16A, which did not cover the goods in question.

The Court concluded that "aprons" and "cots" being cut pieces of long lengths of tubes or pipes did not fall under the scope of Item 16A, which referred to lengths of pipes or tubes. It reiterated that the exemption notification could not be stretched to cover goods outside the purview of Item 16A. Drawing parallels to previous judgments, the Court emphasized the importance of interpreting exemption notifications as they stand without expanding their scope beyond the specified categories. Ultimately, the appeal was dismissed, affirming the reclassification under the residuary Tariff Item 68 with costs awarded to the respondents.