1997 (11) TMI 357 - AT - Central Excise

Summary

Issues:
1. Classification of rubber solution (solvent based) and eligibility for Notification No. 175/86-C.E.
2. Availability of Notification No. 250/86-C.E. for Rubber Solution (Water based).

Analysis:
1. The appeal dealt with the classification of rubber solutions manufactured by the respondents and their eligibility for specific notifications. The Tribunal confirmed the classification of solvent-based rubber solution under sub-heading 3506.00, citing previous orders. The benefit of Notification No. 175/86 was extended as it covered goods falling under this heading, despite the Revenue's objection based on a different chapter classification. The Tribunal upheld the lower authority's decision on this issue.

2. Regarding the water-based rubber solution, the Tribunal found that the Revenue contested the exemption due to power usage in manufacturing. The lower authority had remanded the matter for verification, leading to the benefit extension subject to verification. The Tribunal agreed with this approach, emphasizing the need for verification before granting exemptions based on power usage in manufacturing processes.

3. The Vice President's assent highlighted the nature of water-based rubber solutions, emphasizing that adding water and emulsifier might not change the characteristics significantly. Reference was made to scientific sources and classification under Heading 40.01 for natural rubber latex. The discussion also touched on synthetic latexes and the duty exemption criteria related to power usage in manufacturing processes.

4. The Tribunal's consideration of the solvent-based rubber solution as an adhesive involved a comparison with Board Circulars and Tribunal decisions. The Tribunal's view differed from the Board's, citing exclusion clauses under Heading 40.05 of the HSN. The order emphasized the product's use as an adhesive for retreading purposes, supporting the lower authority's decision based on previous Tribunal rulings.

5. The judgment concluded by upholding the lower authority's decision on both types of rubber solutions, emphasizing the need for verification in cases of exemption claims based on manufacturing processes. The appeal was rejected, maintaining the decisions made in the open court session.