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TMI Blog1990 (7) TMI 220X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondents herein for classification of the said product under sub-heading 4006.90. 1.03. The Assistant Collector issued a show cause notice to the respondents as to why their claim for the benefit of Notification 377/86 be not disallowed. The respondents in their reply dated 22-5-1987 contended that the product 'vulcanising solution' merited classification under sub-heading 4006.90 as it was a finished article. The Assistant Collector vide his order-in-original dated 8-1-1988 held the product Classifiable under sub-heading 4005.00 attracting duty at the rate of 40% ad valorem and demanded differential duty for the period 1-11-1986 to 30-9-1987 amounting to Rs. 25,61,791.72. 1.04. On appeal before the Collector of Central Excise (Appeals) by the respondents herein the said authority has held that the CEGAT decision in Elgi Polytex Ltd., Coimbatore v. Collector of Central Excise, Coimbatore - 1988 (34) E.L.T. 404 (Tribunal) will be applicable. That authority has further held that the reasons stated by the Tribunal are also applicable in the present appeal before it. Accordingly, the said authority modified the order of the Assistant Collector. 1.05. It is appropriate at thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly an adhesive for helping the cushion rubber compound, compound to adhere to the old tyre after buffing. Composition of the product under consideration here is similar to the product under consideration before the Tribunal in Elgi's case mentioned (supra). In any case similarity on the crucial issue that both the products in this case and in Elgi's case are rubber based adhesives cannot be doubted. It is, further, urged by the learned advocate that if Heading 35.06 is not accepted, then Heading 40.06 as articles of rubber with sub-heading 4006.90 should be acceptable because the product under consideration is a finished article of rubber having its own specific use of adhesion, it cannot by any means be called a compound rubber because the rubber compound content is only 12% to 15%. He, therefore, submits that appeal deserves to be rejected and impugned order may be upheld. His further submissions is that there is no case for remand because all the primary data for determination of the classification of the product under consideration is available on record. 4. We have carefully considered the pleas advanced on both sides. We find from the composition and the use of the product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case from the earlier judgment of the Tribunal in that of Elgi Polytex Ltd. Accordingly, we uphold the classification of the product under consideration under Heading 35.06. 5. As already stated Tariff Heading 35.06 has been introduced w.e.f. 10-2-1987 in the Central Excise Tariff Act, 1985. Accordingly, there will be no demand of duty on the respondents w.e.f. 10-2-1987. 6. However, from the perusal of the show cause notice leading to the impugned order, we find that the respondent company was asked as to why duty on their past clearances should not be demanded at 40% ad valorem under Section 11A of the Central Excises and Salt Act, 1944. As a result of this notice the Assistant Collector demanded differential duty w.e.f. 1-11-1986. The question, therefore, remains to be considered as to what would be the classification during the period 1-11-1986 to 9-2-1987 for the purpose of the present matter. The contending entries under Central Excise Tariff Act, 1985 during this period are 4005.00 as contended by the department and entry 4006.90 as contended by the respondent company herein. 7. For the sake of resolving the controversy it is appropriate at this stage to reproduce the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onclusions arrived at by him regarding classification of the product of vulcanising solution under sub-heading 4005.00 for six months period prior to 10-2-1987. 10. Shri A.S. Sunder Rajan, Departmental Representative had submitted that the Collector (Appeals) had not discussed the facts and had not applied his mind and hence the order was not a speaking order. Therefore, he had sought for remand of the case. 11. Shri F.S. Nariman, Sr. Counsel appeared for the appellants and submitted that vulcanising solution does not come under compound rubber and therefore, will not be covered under sub-heading 4005.00 of Chapter 40. He submitted that cushion compound in limited form is cut into small pieces and mixed with rubber solvent in a cement mixing churn. The cushion compound dissolves in the solvent and forms a homogenous solution. Thereafter, this solution is packed in 20, 25 and 200 litres containers ready for sale. The ingredients and its percentage composition are as under - Rubber - 12 % Rubber Chemicals - 3 % Solvent - 85 % He, further submitted that vulcanising solution is a finished article ready for sale and use. The vulcanising solution has the same use in the retre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the two Members and there is no need to repeat them. 16. Though the referring order was made on 17-10-1989, it could not be taken up for hearing so far since the office of the President was lying vacant. 17. The hearing was spread over two days - 11-5-1990 and 16-5-1990. Shri V. Chandrasekharan, SDR, represented the appellant-Collector on the first day and he, alongwith Shri S.S. Khosla, CDR, Shri L.P. Asthana, Jt. CDR and Shri A.S. Sunder Rajan, JDR, appeared on the second day. On both the days Shri F.S. Nariman, Senior Counsel with Shri K.R. Nambiar, Shri S.C. Sharma, Advocates and Shri S. Ignatius, Corporate Manager, represented the respondents. 18. The referring Bench has relied on the Tribunal's decision on the classification of a similar product in the case of Elgi Polytex Ltd., Coimbatore v. Collector of C. Ex., Coimbatore -1988 (34) E.L.T. 404. The Technical Member's order specifically notes :- "We find from the composition and the use of the product as given above and not controverted by the appellant that its primary function is as an adhesive; composition of the product is also similar to the composition of the product under consideration before the Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case shall be referred by the President for hearing on such point or points by one or more of the other Members of the Appellate Tribunal, and such point or points shall be decided according to the opinion of the majority of the members of the Appellate Tribunal who have heard the case including those who first heard it: Provided that where the members of a Special Bench are equally divided, the point or points on which they differ shall be decided by the President". 20. Now, before dealing with the question, I would like to note an objection raised by Shri Sunder Rajan, learned Departmental Representative, to my hearing the matter. His objection was based on the following provision in the President's Order No. 137 of 1983 dated 19-9-1983 which reads thus: - "Clause 5(2) Where a Member of the Bench having jurisdiction in a matter has decided or dealt with that matter in any other capacity, or does not consider it proper, for any reason, to deal with that matter, President shall allot the matter to a reconstituted Bench which does not include that member, or to another Bench, as he may consider appropriate." The submission was that since I was one of the Members comprising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. In this context, reference was made to the then President's decision in Collector of Central Excise, Chandigarh v. Himachal Pradesh Horticulture Produce Marketing & Processing Corporation Ltd. - 1988 (34) E.L.T. 160. I have perused this decision. The points of difference are set out in para 29 of the report and the President has given his decision in para 52. In that case, the present question was not posed and naturally, therefore, the President had no occasion to go into it. This decision is, therefore, of no help in resolving the present question. 22. Shri Nariman, Learned Counsel for the respondents, submitted that the proviso to Section 129C(5) of the Customs Act was unique. Such a provision was not to be found in the Income Tax Act or the Administrative Tribunals Act. There are a number of judicial pronouncements with reference to the provisions of the Income Tax Act which are analogous to the main clause of Section 129C(5) of the Customs Act. Having regard to these pronouncements, the law is well-settled that the Third Member to whom a point of difference between two Members is referred has no jurisdiction to go outside the two opinions recorded by the referring Bench. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... differ and the case shall be referred by the President for hearing on such point or points by one or more of the other members of the Appellate Tribunal, and such point or points shall be decided according to the opinion of the majority of the members of the Appellate Tribunal who have heard the case including those who first heard it (emphasis supplied). It is clear that the decision on the point or points of difference is not left to the referee Member or to the referee Bench but to the original Bench which shall decide the point of difference according to the opinion of the majority of the Members who have heard the case including those who first heard it. The proviso, on the other hand, provides that where the Members of a Special Bench are equally divided, the point or points on which they differ shall be decided by the President (emphasis supplied). It appears to me, therefore, that in Special Bench matters, the duty is cast on the President to decide the point. The methodology followed in non-Special Bench matters of deciding the poing according to the majority opinion does not seem to be axiomatically applicable in Special Bench matters. If the position was otherwise, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not in conformity with the said decision especially when the learned Member of the referring Bench had, after noting the similarity of the products, applied the precedent decision for the period from 10-2-1987. 25. Shri Sunder Rajan submitted that the existing Section 129C(5) of the Customs Act is being substituted by the Finance Bill, 1990, by a new provision in which the special provision requiring the President to decide the point of difference would not find a place. While that may be so, it is still in the future. For the present, what is in issue is the scope of the present provision. 26. As to the merits of the classification, the learned Departmental Representatives submitted that the classification should be decided as between 4005.00 and 4006.90 - the two sub-headings recorded in the opinions of the two learned Members. Shri Nariman, on the other hand, contends that the classification should be in accordance with the Tribunal's decision in the Elgi Polytex case which has been followed by the referring Bench in respect of the period on and from 10-2-1987. Since the product in the present case is similar to that in the Elgi Polytex case (and the two Members are agreed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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