1998 (12) TMI 277 - AT - Central Excise

Summary

Issues:
Classification of Vulcanising solution under CET sub-heading No. 4005.00 or 3506.00.

Analysis:
The dispute in the appeal relates to the classification of Vulcanising solution manufactured by the respondents, either under CET sub-heading No. 4005.00 as claimed by the Revenue or under CET sub-heading No. 3506.00 as claimed by the manufacturers and upheld by the Collector of Central Excise (Appeals). The respondents had manufactured and cleared Vulcanising solution without duty payment, claiming classification under sub-heading No. 3506.00 and availing exemption under Notification No. 175/86. The Revenue contended that the product falls under sub-heading No. 4005.00, attracting duty, and issued a show cause notice for duty recovery. The Assistant Collector classified the product under sub-heading No. 4005.00, denying the exemption. However, the lower appellate authority set aside this decision, following a Tribunal's ruling in the case of MRF Ltd., which upheld classification under sub-heading No. 35.06 post-10-2-1987.

The Tribunal considered the Tribunal's decision in the case of MRF Ltd., which was based on an earlier case involving Elgi Polytex. In the Elgi Polytex case, a similar product containing rubber compound, sulphur, resin, and spirits was classified as glue under Heading No. 35.06 due to its composition. The Tribunal ruled out classification under Heading No. 40.05 because the rubber compound used was vulcanised. In the case of MRF, the Tribunal dealt with a vulcanising solution containing rubber compound, rubber chemicals, and solvent. The current product's composition includes natural rubber, zinc oxide, carbon black, sulphur, and rubber chemicals, mainly used in tyre retreading. The Revenue's appeal was based on challenging the Tribunal's decision, which was later upheld by the Supreme Court.

Considering the precedents set by the Elgi Polytex and MRF cases, upheld by the Supreme Court, the Tribunal upheld the lower appellate authority's decision to classify the Vulcanising solution under CET sub-heading No. 3506.00, rejecting the Revenue's appeal. The Tribunal found the decisions in the aforementioned cases directly applicable to the present case, leading to the classification under sub-heading No. 3506.00.