1996 (6) TMI 257 - AT - Central Excise

Issues Involved:
1. Classification of Fenoplast PVC impregnated flame resistant colliery conveyor belting and Food quality PVC impregnated/coated cotton conveyor belting.
2. Validity and time-bar of refund claims filed by the assessee.

Issue-Wise Detailed Analysis:

1. Classification of Fenoplast PVC Impregnated Flame Resistant Colliery Conveyor Belting and Food Quality PVC Impregnated/Coated Cotton Conveyor Belting:

The primary issue in these appeals was whether the products manufactured by M/s. Fenner India Ltd. should be classified under Tariff Item 19III (as claimed by the Department) or under Tariff Item 68 (as claimed by the assessees). The Tribunal considered the manufacturing process, which involved weaving a fabric from a mixture of cotton and nylon yarn, followed by impregnation with PVC compound. The Chemical Examiner's report indicated a high percentage of PVC in the final product.

The Tribunal referred to the Supreme Court decision in C.C.E. v. Multiple Fabrics Ltd., which held that a high percentage of PVC compound excluded the product from being classified as fabric under Tariff Item 22, thus falling under Tariff Item 68. The Tribunal found that the Assistant Collector's reasoning, which distinguished the present case from the Supreme Court decision based on the manufacturing process, was not persuasive. The Tribunal concluded that the high percentage of PVC compound in the conveyor belting meant it could not be classified as fabric under Tariff Item 19.

2. Validity and Time-Bar of Refund Claims:

The refund claims pertained to duty paid from December 1974 to May 1981. The Collector (Appeals) had remanded the matter to the Assistant Collector to examine the issue of limitation and whether a valid protest had been lodged. The Department sought to set aside this remand order and restore the Assistant Collector's order, which dismissed the refund claim as time-barred.

The Tribunal upheld the Collector (Appeals)'s remand order, stating that the issue of valid protest and limitation was a factual question that needed to be examined by the Adjudicating Authority. The Tribunal saw no reason to interfere with the remand order and thus rejected the Department's appeal on this point.

Separate Judgments:

Judgment by Vice President:

The Vice President emphasized the distinction between "belting" and "belt," noting that the term "belting" referred to the material from which belts are made. He highlighted that the Notification No. 70/69 included "belting" under sub-item 1 of Item 19, indicating that such materials were considered industrial fabrics. The Vice President argued that the manufacturing process, which involved weaving a fabric and then impregnating it with PVC, supported the classification under Tariff Item 19III. He also noted that the refund claims were time-barred and non-maintainable, as the classification had been determined final by the Assistant Collector's order dated 2-4-1976.

Judgment by Third Member:

The Third Member agreed with the Vice President, citing the Supreme Court's decision in C.C.E., Hyderabad v. Fenoplast (P) Ltd., which held that impregnated fabrics fell under Tariff Item 19III. The Third Member also concurred that the refund claims were time-barred and non-maintainable.

Final Order:

In view of the majority opinion, the Tribunal concluded that:
1. The products in question were industrial fabrics classifiable under erstwhile Tariff Item 19III.
2. The refund claims filed by M/s. Fenner India were time-barred and non-maintainable.
3. The appeals of the Department were accepted, and the appeal of M/s. Fenner India Ltd. was rejected.

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