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1997 (8) TMI 149 - AT - Central Excise
Issues: Classification of rice rubber roller manufactured by the appellants and consequent demand thereon.
Analysis: The controversy in this case revolved around the classification of the rice rubber roller manufactured by the appellants and the resulting demand for duty. The appellants initially classified the product under Tariff Item 16A(3) with an exemption claim under Notification No. 197/67. However, the department issued a show cause notice proposing a different classification under Tariff Item 68. The original authority upheld the reclassification under Tariff Item 68, leading to a demand for duty. Subsequently, another show cause notice was issued for a specific period, and the demand was confirmed based on the previous classification. On appeal, the appellants argued that the show cause notice lacked a valid basis for the change in classification, citing past assessment practices and a High Court judgment. They contended that the product was essentially a rubber pipe and tube, aligning with Tariff Item 16A(3) criteria. The appellants also referenced a previous judgment supporting their position. In contrast, the JDR argued based on a Tribunal judgment regarding the classification of rice rubber rollers under Tariff Heading 40.16, emphasizing that the product did not fit the description of Tariff Item 16A(3). The Tribunal considered both parties' arguments and acknowledged the appellants' past assessment under Tariff Item 16A(3). However, they upheld the reclassification under Tariff Item 68, citing cogent reasons provided in the show cause notice for the change. The Tribunal agreed with the JDR's position, supported by the Tribunal's previous judgment and Supreme Court confirmation, that the product did not fall under the category of "tube and pipe of rubber" but rather qualified as "other articles of rubber." Consequently, the Tribunal affirmed the classification under Tariff Item 68 and upheld the duty demand within the statutory time limit, leading to the dismissal of both appeals.
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