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TMI Blog1996 (6) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... ipes and Tubes as the resulting products which are used in textile spinning machinery as components , therefore, they qualify for classification under Heading 8448.00. The assessee had pressed for accepting the ratio of the Bombay High Court s judgment rendered in the case of M/s. Precision Rubber Ltd. v. CCE as reported in 1990 (49) E.L.T. 170. Ld. Collector has rejected the said contention on the ground that the decision was with reference to the erstwhile tariff and considering inter alia the eligibility of exemption of the products under erstwhile Tariff Item 16A(2) read with Notification No. 197/67, and therefore has held that the ratio does not appear to have relevance to the present case. 3. The Revenue has also come up in Appeal No. E/920/91-C against the order, dated 17-9-1990 passed by the Collector (Appeals), Bombay. The Collector (Appeals) in this case has accepted the appellant s contention that their products are correctly classifiable under chapter sub-heading 4009.99 following the ratio of the Bombay High Court. The Revenue in this particular appeal has challenged the said classification arrived at by the Collector (Appeals) and have pleaded for classifying the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther sub-classifiable under sub-heading No. 4016.99. The goods attracting duty @ 15% Adv. as they are not covered by the description of goods against the rest of the sub-classifications of Heading 40.09. It is also stated that the products Cots and Aprons have a specific trade name and connotation other than tubings and pipings of vulcanised unhardened rubber. They are known in the trade and commercial parlance as parts and accessories of textile machinery . As they conform to the ISI Specifications and that they have a very special type of use for the textile industry, the classification has, therefore, to be only under sub-heading 4016.99. 4. In the assessee s appeal, the lower authorities had classified the goods under sub-heading 8448.00 which is challenged before us, and the assessee is claiming the classification under 4009.99 nil rate of duty. The revenue filed a cross objection 369/94, by which they have given up the classification under sub-heading 8448.00 and have prayed for classifying the product under 4016.99. This cross objection have been dismissed by us by a separate order in the open Court, however, we have granted liberty to the revenue to plead their case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has contested for the sub-heading 4009.99. 6. The assessee in this case has submitted that there is no significant difference between the old Tariff Item 16A(3) and the present Heading 40.09. It is their plea that the Notification 197/67, dated 29-8-1967 exempted certain goods falling under Item 16A(3) viz. Piping and Tubing designed for use as component parts of medical or surgical instruments or machinery articles . It is stated that S. Nos. 2 3 of this Notification applied to Piping and Tubing designed for use in laboratories or designed to be, or converted in the factory of its production into component parts of machinery articles respectively . The item in question falls within S. No. 3 of the said notification. After the amendment of the tariff, the items were considered to be falling under sub-heading 4009.99, the tariff rate itself was Nil and as the notification was also in existence, the Government realised about the tariff having Nil rate of duty and therefore, they issued an amending Notification No. 31/90 omitting S. Nos. 2 3 in Notification No. 197/67. Therefore, it became clear that the item being unhardened vulcanised rubber continued to be tre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y nugatory if it is held that pipes and tubes which have become known as machinery parts have ceased to be pipes and tubes and therefore, such an interpretation as placed by the ld. Collector (Appeals) is not a correct interpretation. It is also submitted that the ratio of the Bombay High Court rendered in the case of Precision Rubber Ind. is binding on the Tribunal and there is no reason to differ for the same, in the context of there being no material difference in the language of Tariff Item 16A and Heading 40.09. Therefore, they submit that the earlier decision rendered in their own case of the Tribunal in Inarco Ltd. v. CCE Order No. 167/84D, dated 23-3-1984 is no longer pending after the ruling rendered by the Hon ble Bombay High Court. It is also submitted that the Tribunal judgment in Inarco Ltd. is contrary to the judgment of the Hon ble Supreme Court as rendered in the case of Bharat Forge as reported in 1990 (45) E.L.T. 525, where the Hon ble Supreme Court has held that pipes and tubes cut into size were classified under Tariff Item 26AA and not under Tariff Item 68, even if they were known in the market as a distinct commodity. It is also submitted that the Tribunal jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the ruling of Kohinoor Rubber Mills is clearly distinguishable and did not apply to the present case but on the other hand, there were observations in the judgment which helps the party. Ld. Sr. Advocate specifically relied on para 18 of the Hon ble Supreme Court judgment wherein it has been held that the items continued to be piping after processes as it does not change the character of the piping. He also relied on the ruling rendered by the Tribunal in the case of Track Parts Corpn. v. Collector of Customs as reported in 1992 (57) E.L.T. 98, wherein it has been specifically held that marely because the hose pipes were cut to specific sizes and subjected to further processes and fitted with fittings and it does not change the essential character and it continued to remain as hose within the Heading 40.09. 9. We have carefully considered the submissions made by both the sides and perused the records. The question that falls for our consideration is as to whether the products Aprons and Cots which have been cut to specific sizes and certain processes carried out to make them as specific components for use in the textile machinery would be excluded from the sub-heading 400 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... classification gets settled thereby and that the change of tariff would not make any difference, in as much as the Hon ble Bombay High Court has clearly held that merely because the item has been converted into a component from pipes and tubes, it does not cease to be pipes and tubes, by virtue of such cutting and bevelling processes. In order to buttress the arguments, the ld. Sr. Advocate has also relied on the ruling of Hon ble Supreme Court rendered in the case of Bharat Forge Press Ind. Ltd., Tract Parts Corpn., Parle Exports Pvt. Ltd. 10. On a careful consideration of the pleas made by the assessee and the revenue, we have to uphold the contentions of the assessee. The reason being that the Bombay High Court in the case of Precision Rubber Ind. at Para 18 of the judgment has held that what has resulted in the manufacturing process, continued to have the character of the tubing as contemplated by the relevant entry. Tariff Item 16A at the relevant time reads : Rubber Products, the following namely : 3. Piping and tubing of unhardened vulcanised rubber. The Tariff Entry 40.09 reads : Tubes, pipes and hoses of vulcanised rubber other than hardened rubber, with o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue and since by those who have to construe, execute and apply the said enactments. A similar view had earlier been expressed by the Hon ble Supreme Court in the case of Desh Bandhu Gupta Co. (supra) wherein it has been held that principle of contemporanea expositio would apply in a case where documents issued by Government almost simultaneously with issuance of the Notification explaining the manner in which transactions stated in the Notification were intended to be closed, and therefore, it has been held that the documents can be looked into for finding out the true intention of the Government in issuing the Notification. In this regard, Hon ble Supreme Court has also relied on Maxwell s Interpretation of Statute (12th Edn. P. 268) and Crawford on Statutory Construction (1940 Edn. Pp. 393-395 Para 219). In the case of Track Parts Corpn., the Tribunal has held that hose assembly made of vulcanised rubber other than hard rubber with end fittings are classifiable under sub-heading 4009.50 of the Customs Tariff Act, 1975. A similar argument as raised by the ld. SDR had been raised in that case but the Tribunal rejected the same. This ruling has got a clear applicability to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l under Heading No. 40.16 (as evident from specific mention of this heading) and not others. In the present matter it is nobody s case at this stage, that the articles in question attract 40.16. In other words, they are not hit by the exclusion Clause 1(a). 18. Secondly, Section XVI (and Chapter 84 thereof) distinguishes between machinery and mechanical appliances; And Section Note 5 shows that the Machines is the genus of which machinery and mechanical appliances have been treated as species and the articles in question are admittedly component parts of machinery. 19. Further the fact is that Chapter Note 2 of Chapter 40 excludes only parts of mechanical appliances made of hard rubber. 20. Hence, in view of the specific entry for textile machinery parts in Chapter 84 under Heading 8448.00 which covers parts and accessories suitable for use solely or principally with machines of this heading or of Heading Nos. 84.44, 84.45, 84.46 and 84.47", the Chapter Note 2(d) of Chapter 40 can only be interpreted to mean that parts of mechanical or electrical appliances made of unhardened rubber could be considered under that chapter, provided of course, they could be shown to be cover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct remains that the notification as it stood during the relevant period did not cover pipings and tubings which had been converted into component parts of machinery. 23. The ld. DR s arguments on the other hand have a lot of force. And if anything, it is the ratio of the Tribunal s order in the case of appellants themselves as reported in 1987 (31) E.L.T. 469 (T) = 1985 (5) ETR 698, to the extent of its finding on facts, which is still valid. The relevant portion reads as follows: we have thus not an iota of doubt in our mind that these products known as `Aprons and `Cots are finished manufactured products, wholly distinct from tubings and pipings from which they are made. 24. It may be mentioned that this part of the finding was concurred with by the Bombay High Court and the Tribunal s order was modified only on the legal aspect of classification and appropriate heading. 25. The present Heading 40.09 also covers merely tubes, pipes and hoses and not specialised articles which were different and distinguishable from them, and designed for use as parts of machinery. Since they are admittedly parts of textile machinery, therefore, in the absence of any chapter note or se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of the said goods under Heading 84.48 as machinery parts. The latter view found favour with the learned Vice President. He has accordingly proposed dismissal of Inarco s appeal. The learned Judicial Member had, however, upheld the appellants plea for classification of the goods under Heading 40.09, going by the Bombay High Court judgment in Precision Rubber Industries v. Collector of Central Excise [1990 (49) E.L.T. 170] wherein it was held that cots and aprons were classifiable as Piping and Tubing of unhardened rubber under Tariff Item 16A as the Tariff stood at that time and not under Item 68 as applied by the department. In coming to the said decision, the High Court overruled a Tribunal decision reported in 1987 (31) E.L.T. 469 in the case of Inarco themselves classifying the same products under Tariff Item 68 of the Tariff then in force, treating the goods as component parts of textile machinery, wholly distinct from tubing and piping from which they are made. While the learned Member (Judicial) had gone by the said High Court judgment, the learned Vice President has held that judgment was rendered under the old Tariff and hence not applicable to the present problem as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the publication of the ISI though authoritative does not suggest that aprons are not components . The Collector had relied upon the ISI specifications and concluded that aprons and cots are accessories. The High Court held that the said publications do not suggest that aprons and cots are accessories. The function performed by them is of gripping the fabric and the aprons and cots are accepted as components of machinery. The finding of the High Court that the items in question are component parts of textile machinery and not mere accessories thereof as had been held by the departmental authorities in that case (Precision Rubber) as well as in the earlier Inarco case would support the finding reached by the learned Vice President in Para 27 of his order that sub heading 8448.00 which specifically covers parts of textile machinery would apply to the goods in question which are admittedly parts of textile machinery. The alternative Heading 40.07 would apply to tubes and pipes which are known as such and not as other identifiable items know by separate names. If a person wants to buy aprons and cots he has to ask for them by such names. He will not get them by asking for tubes and pi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat line during his argument but agitated for classification under Heading 8448.00 vide Paragraph 5(iii) of learned Judicial Member s order. Since this question was thus argued before the Bench, the decision upholding that classification cannot be said to be beyond the issue agitated in the appeal. A Privy Council decision reported in AIR 1923 PC 189 and the Supreme Court decision in Fenner (India) Limited v. Collector of Central Excise, Madurai - 1995 (77) E.L.T. 8 were cited by the learned Senior Counsel in support of the plea that it was not open to the department to raise a ground in appeal proceedings which had been given up by them earlier. In other words since classification under Heading 84.48 had been abandoned by the department as they have sought classification of cots and aprons under Heading 40.16, the former classification cannot be claimed now. I have examined this contention in the light of the decisions cited. I find that in AIR 1923 Privy Council 189, the appellant had elected to abandon certain issues stated by the trial Judge and never called any evidence in support of them and a formal order was made upon his petition disposing them all in that way. It was note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent was recorded by the High Court and the Writ Petition was dismissed as unnecessary. In view of this position it was held that it was not open to the department to revert to the original classification which they had given up at the Writ Petition stage. This decision was taken in the facts and circumstances of this case where, on the department giving up their original stand, the court decided the matter. After this the department could not revive their original stand. It would be a case of estoppel. In the second appeal relating to the same parties, the authorities at all times sought to assess the belting under Tariff entries 3920.11 or 3920.12 and never under 59.08. It was held that it was impermissible for the Excise authorities to urge for first time in the appeal before them (Supreme Court) that the classification would be under 59.08. Thus the facts in both the appeals of Fenner (India) Limited are distinguishable from the present appeals. In the present case no decision was taken by any authority on the basis of the department s not pursuing the question of classification under 84.48. Such an approach was only a temporary phase and no decision was taken on such a position ..... X X X X Extracts X X X X X X X X Extracts X X X X
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