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TMI Blog2000 (7) TMI 533X X X X Extracts X X X X X X X X Extracts X X X X ..... bes are made of various rubber compounds and cured in moulding presses. After curing various other operations such as post-curing, trimming, inflation etc. are carried out. After moulding and during various stages thereafter some tyres and tubes are found to be having manufacturing defects which cannot be repaired/rectified. The same are cut and punctured and cleared by the respondents by availing the benefit of Notification No. 76/86-C.E. In the classifications, the respondents have described the said goods as scrap cured cut tyres and scrap cured cut tubes . The same were sold by the respondents by describing the same in the invoices as cut tyres and cut tubes. 3. Proceedings were initiated by the department by issuing two notices da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tages during the course of manufacture of tyres and tubes and they are known differently in common parlance. They have also contended that as the product is being cleared by the assessee in the weightage unit, instead of numbers, the same would support the Revenue's stand that the goods were cleared as scrap and not as cut tyres and cut tubes. As regards the approval of classification lists since 1991, the Revenue has contended that there is no estoppel against law and the mistake once committed can always be rectified by the Revenue for the prospective clearances. The Revenue has further agitated that the wordings of the Notification No. 76/86-C.E., dated 10-2-86 are very clear and unambiguous and the benefit of the same should be restrict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facture of the tyres. It is only when the defects are noticed in the already moulded tyres and tubes which might be awaiting for some further manufacturing process, that the same are taken out of the mainstream and disposed of as scrap cured tyres and tubes because of the fact they are unusable. The respondents have argued that even where they are further cutting and punching the said tyres so that they cannot be re-used, no process of manufacture of scrap can be said to have taken place. As such he submits that the scrap in question being not result of manufacturing activity undertaken by the appellants cannot be charged to duty again. In this connection they placed strong reliance on the Hon'ble Supreme Court's decision in the case of Mot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and is erroneous that by further cutting the defective and damaged tyres and tubes, they have manufactured scrap. They have also submitted that in any case no duty is required to be paid on the items in question under first proviso to rule 49 which states that duty is not liable to be paid on goods unfit for marketing. In view of this a prayer has been made to reject the Revenue's appeal. 8. We have considered the submissions made from both the sides and have given our careful consideration to the issue involved. There is no dispute upto the stage of emergence of cut tyres and cut tubes. Said cut tyres and cut tubes are exempted from payment of duty under Notification No. 76/86. However, the benefit of the said notification is sought to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be levied thereon. As the issue on the point of manufacture is settled by Delhi High Court as confirmed by the Hon'ble Supreme Court and has subsequently been followed by the Tribunal in a number of cases, we do not find any justification in the Revenue's stand that the ratio of the same would not be applicable to the facts of the instant appeal inasmuch as the decision was given in the context of the earlier tariff and not under the new tariff, where waste and scrap has been specifically mention under sub-heading 40.04. It is observed that first the question of manufacture has to be decided and the tariff is only for the purposes of classifying the goods and applying the rate of duty for the purposes of calculating the duty required to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g in the Notification which is to the effect that these tyres and tubes must be cleared as cut tyres and cut tubes without further cutting or punching and as to what is the extent of cutting and punching of the same. 10. We also note that the Commissioner has observed that entry 40.04 covers "waste, parings and scrap of rubber" (other than hard rubber). This nomenclature which the Asstt. Commissioner wants to adopt is more glaringly inappropriate as the waste, parings and scrap are only unvulcanised rubber since the Tariff talks of other than hardened rubber; whereas cut tyres by whatever nomenclature it is called is hardened rubber as rejection is after curing. The Revenue has not rebutted the above finding of the Commissioner in their g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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