1998 (7) TMI 178 - AT - Central Excise

Hose pipes - Eligible for exemption under Sl.No. 26(ii) and not under Sl.No. 26(i) of Notification No. 53/88-C.E.

Summary

Issues:
- Classification of PVC braided hose pipes for exemption under Notification No. 53/88.

Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi involved the classification of PVC braided hose pipes for exemption under Notification No. 53/88. The main issue was whether the hoses should be considered under Sl. No. 26(i) as claimed by the department or Sl. No. 26(ii) as claimed by the assessee. The Revenue contended that the hoses manufactured by the respondents fell under Heading 39.17 of the Central Excise Tariff Act and should be classified as Multilayer Plastic Laminated Tubes, attracting partial exemption. However, the Commissioner (Appeals) disagreed, emphasizing the distinction between tubes and hoses, particularly noting that hoses are known and traded as distinct products, usually reinforced with textile. The Commissioner also referred to a Board Circular clarifying that PVC hose pipes used for industrial purposes should not be treated as multilayer laminated tubes.

The Respondents argued that hoses are always reinforced, unlike pipes, and referred to technical literature supporting this distinction. They highlighted the absence of a statutory definition in the Tariff and the importance of trade parlance in determining classification, citing a Supreme Court case. The manufacturing process of the hoses, involving forming an inner tube, braiding synthetic yarn, and laminating with PVC compound, was also presented to support their classification argument.

Upon considering the submissions, the Tribunal noted the classification under Heading 39.17 was undisputed. The Assistant Commissioner's classification of the product as multilayer laminated tubes was based on the additional layer of PVC compound after braiding, following the Oxford Dictionary definition of a hose as flexible tubing. However, the Tribunal agreed with the appellants' argument that hoses are always reinforced, distinguishing them from tubes. Reference was made to ISI Specification and technical literature supporting the distinction between hoses and tubes based on reinforcement. The Tribunal emphasized that the product description as PVC hose pipe was crucial, as per the Board Circular, regardless of its specific use. Since the impugned product was a PVC hose pipe, not a multilayer laminated tube, and was reinforced as per technical standards, the appeal by the Revenue was rejected, upholding the Commissioner (Appeals) decision.