9911796707
TMI Blog1997 (1) TMI 537X X X X Extracts X X X X X X X X Extracts X X X X ..... ed below for convenience of reference : "9. In heading Nos. 40.01, 40.02, 40.03, 40.05 and 40.08, except as otherwise provided, the expressions 'plates', 'sheets' and 'strips' apply only to plates, sheets and strip and to blocks of regular geometric shape, uncut or simply cut to rectangular (including square) shape, whether or not having the character of articles and whether or not printed or otherwise surface-worked, but not otherwise cut to shape or further worked. In Heading No. 40.08, the expressions 'rods' and 'profile shapes' apply only to such products, whether or not cut to length or surface-worked but not otherwise worked. Sub-heading No. 4008.21 shall also apply to "plates", "sheets" and "strips", whether or not cut to shape, and surface-worked or further worked so as to render them fit for resoling or repairing or retreading of rubber tyres." The learned Original authority held that the appellants' product fall within the ambit of the said tariff heading in terms of sub-para 3 of note above. The learned CCE (A) upheld the classification as held by the learned original authority. The two competing items for the purpose of classification as held by the lower au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion reported in 1992 (61) E.L.T. 107 holding the goods to be assessable under Heading 16A(2) as sheet of rubber. The erstwhile Heading 68 reads as under : "All other goods, not elsewhere specified but excluding xxx xxx xxx" Before amendment to Chapter Note 9 of Chapter 40 as above, the item was classified under Chapter sub-heading 4016.99 and not under sub-heading 4008.21. He has pleaded that so far as their Hyderabad factory is concerned, the product has been held to be sheet and no reason as such has been entered in the lower authority's order as to the basis for holding it so and further finding has been entered that the same is of rectangular shape without any basis. It has also been ruled that the goods could not be considered as articles falling under Heading 4016 of the tariff for the reason that merely being in profile shape, the goods would not fall under Tariff Heading 4016. In the case of their Cochin factory, he has pleaded that the Collector had referred to flow chart and the appellants' product has been held to be 'sheet' and for that reason therefore classifiable under sub-heading 4008.21. The ratio of the decision of the Tribunal in the context of the erstwhile t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us to the manufacturing process as filed by the appellants in the paperbook and also the note which is submitted before us. The copies of these are enclosed as Annexure I to this order for ready reference. The write of the manufacturing process filed by the department is also enclosed as Annexure II to this order. The write up as filed in the paperbook in case of Appeal No. E/5448/93-C is also enclosed as Annexure III to this order. 6. The learned Counsel for the appellants also referred to the manufacturing process as placed before us and pleaded that essentially the manufacturing process in various units as placed on record by the department and by the appellants is same. Explaining the process he stated that the first stage of the manufacturing is master batch and natural rubber and synthetic rubber in the desired proportion is mixed up with various other chemicals in mixing mill and the material emerged is in sheet form. The same is transferred to conveyer and is taken for further processing and further rubber chemicals are added in the required proportion and after processing in the mixing mill it is again formed into continuous sheet and the sheet thereafter is fed into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oducts as profile shapes of non-cellular rubber. The matter has been examined in the Ministry. It is clarified that in the Explanatory Notes to the HSN, it has been explained that profile shapes are obtained in the length in a single operation (generally extrusion) and they have a constant repetitive cross-section, from one end to the other". (5) IS 7503 Part - I - 1988 deals with Glossary of Terms used in Rubber Industry. Part - I of this glossary contains definitions of basic terms. Para 2.1.2. reads as under :- "2.1.2. Extrudate - A profile produced by extrusion of a rubber compound." In this connection he referred us to HSN Notes to Chapter 40.08 at page 590 which reads as under : "Profile shapes are obtained in the length in single operation (generally extrusion) and they have a constant or repetitive cross-section from one end to other". He has pleaed that amongst the exclusions as set out under Chapter 40.08 moulded products have been excluded and in the inclusions under Chapter 40.16 at page 599 patches of rubber are included. He has pleaded that the appellants' product could be considered to be akin to patches and therefore in terms of the HSN, the same would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "strip". An article which is over 100 metres but only up to 1200 millimetres in width cannot be described as a "strip". Tariff Entries 3920.11 and 3920.12 cannot, therefore, be made applicable to the belting made by the appellants. For the later period, Tariff Heading 39.26 must be read as applicable to it." He has pleaded that this decision was given in the context of conveyor belt and the ratio would equally apply to the facts of this case. The product which is extruded is described as belt at the stage prior to extrusion as set out in the manufacturing process. He also urged that the material which emerged at the intermediate stage to the manufacture of notified finished products set out in the manufacturing process would be sheeting and not sheet and since only sheets were covered under Chapter Note 9 of Chapter 40 and the appellants had only done moulding on the sheeting. The same therefore could not fall under this tariff heading. In this connection he referred us to the decision of the Hon'ble Supreme Court in the case of Inarco Limited v. CCE, reported in 1996 (87) E.L.T. 3 (S.C.). He has pleaded that in that case the Hon'ble Supreme Court has held that there was differen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is reproduced below for convenience of reference : "The profiles which do not qualify to be called as plates, sheets and strips have been classified under other forms in the Central Excise Tariff. Out of the examples enumerated in respect of other forms profile shapes are also covered. Thus profile shape should be understood as such of the extruded products which do not have regular geometric form of cross-section and or which are not cut or cut to other than rectangular shapes and or having been subjected to further working. Even according to the definition of profile given in the Book on "Moulding of Plastics" referred to by the appellants, the cross-sectional shape of the extrudate usually reserved for complex shapes is known as a profile. This explains as to why strips and profile shapes were separately classified under Headings 40.05 and 40.06 respectively. The above interpretation also finds support from the Explanatory Notes in HSN under 40.06. According to HSN the Heading 40.06 includes unvulcanised rubber profile shapes for example plates and strips of non-rectangular cross-section generally made by extrusion. That is why camel back strips with a slightly trapezoid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty while passing the order and sought for remand of the matter for this limited purpose. The learned SDR has no objection in this regard. 11. In regard to classification of precured treads the issue of classification of which is before us for our consideration, we observe that both the sides accept that the classification of the same before the amendment to Note 9 of Chapter 40 in 1990 by addition of sub-para (3) therein, was under heading 4016. The controversy as to the classification, arose only by introduction of amendment as above. The case of the Revenue is that by this amendment the scope of the term plates, blocks, sheet came to be extended by this amendment to cover within its ambit precured treads which were manufactured for resoling, repairing or retreading of rubber tyres. The controversy therefore, centres around this amendment. Prior to this amendment, as seen from the records before us, the view held by the department, as seen from the letter of the Board bearing F.No. 99/18/89-CX. 3, dated 10-11-1989, filed before us in another batch of appeals involving the same issue which were heard separately wherein the (Board's letter was produced in Appeal Nos. E/2507 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... term "plates, sheets etc." has been enlarged to cover within its ambit precured treads as emerged in the form which has been described in the Board's instruction above, by change of its shape by moulding to trapezoidal form. It is therefore, necessary for us to refer to Chapter Note 9 which we have reproduced earlier and which is reproduced below : "9. In heading Nos. 40.01, 40.02, 40.03, 40.05 and 40.08, except as otherwise provided, the expressions 'plates', 'sheets' and 'strips' apply only to plates, sheets and strips and to blocks of regular geometric shape, uncut or simply cut to rectangular (including square) shape, whether or not having the character of articles and whether or not printed or otherwise surface-worked, but not otherwise cut to shape or further worked. In heading No. 40.08, the expressions 'rods' and 'profile shapes' apply only to such products, whether or not cut to length or surface-worked but not otherwise worked. Sub-heading No. 4008.21 shall also apply to "plates", "sheets" and "strips", whether or not cut to shape, and surface-worked or further worked so as to render them fit for resoling or repairing or retreading of rubber tyres." We observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... worked. The term surface worked has not been defined in the tariff but the same technically could be only taken to be process by which surface of the plates, sheets etc. had been subjected to some finishing process. Thus if there was other type of working of these sheets etc. or even if the same were cut to in other shape other than rectangular or square these would go out of the ambit of tariff 4008. By amendment of tariff 1990 by introduction of sub-para (3) to Note 9 of Chapter 40, it is seen that the scope of item falling under 4008 which can be considered as plates, sheets or strips was further enlarged and these for purposes of classification under tariff heading 4008.21 could be cut in any shape and surface worked and also further worked and the cutting of the shape and working has to be such as to render these fit for resoling or repairing or retreading of rubber tyres. Thus for the limited purpose to render the goods fit for resoling or repairing or retreading the process carried out on plates, sheets and strips were not restricted as earlier i.e. surface worked and cut to rectangular and square shape. The earlier instructions as were issued by the Board and which were ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acturing process placed before us, the product of the appellants are manufactured out of the strips and sheets and which have been subjected to moulding which brings the goods within the category of vulcanised plates, sheets and which have been further worked and also have been formed into shape other than rectangular and square. The appellants plea is that the appellants' goods are not plates and sheets but are only profile shapes and therefore would not come within the ambit of tariff heading 4008.21. We have in the face of this plea to consider that if the appellants products are not covered by the introduction of sub-para 3 of Note 9 of Chapter 40, which other item could have been contemplated for inclusion under this heading over and above the items which were earlier included. The appellants were specifically asked in this regard and the learned Counsel for the appellants merely submitted that it was not for the appellants to say which are the other items that could have been further sought to be included. The Revenue also had no specific plea to make in this regard. However, to appreciate the plea of the appellants, we had asked whether there are any other types of plates, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uitable for that purpose, then even if the material is considered as profile shape in profile form the same would still figure within the ambit of heading 4008.21. By note in sub-para (3) of Note No. 9 an exception has been carved out to bring within the ambit of Tariff Item 4008.21 such material rendered usable for the specific purpose in the note. Tariff Item 4008.21 has specific material in the form mentioned thereunder which are for resoling, repairing or retreading of rubber tyres. We hold that the purpose of amendment was to broaden the scope of terms plates and sheets etc. mentioned thereunder to encompass within its ambit such material as are manufactured by the appellants. No other types of material for retreading or repairing etc. manufactured by any other process emerging in different form and which is vulcanised have been brought to our notice. We observe that the interpretation of statute has to be such that it advances the purpose set out therein. The amendment in the present case was specifically brought into cover additional range of goods which are manufactured for resoling, repairing etc. and which have been manufactured to assume the sheets, plates and strips for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome desired width was only sheeting and not sheet. We observe that sheet rubber is defined as under in the Mc Graw-Hill Dictionary of Scientific and Technical Terms second edition : "Sheet rubber (Matter) Latex that has been rolled into sheets either smooth or ribbed". The long rolls of sheet are also covered by this definition. The appellants plea therefore has no force. In regard to the issue regarding Notification 337/86 which was not considered by the lower authority while rejecting the appellants plea for benefit of Notification No. 71/68 in Appeal No. E/5448/91 we observe that the appellants plea is required to be considered in the light of the Notification No. 337/86, as urged by them. We therefore remand the matter for this limited purpose to the original authority for passing an order afresh after affording opportunity of hearing to the appellants. Therefore, for this limited purpose appeal E/5448/93-C is remanded to the original authority. Our decision as confirming the order of the learned lower authority for assessment of the goods in question i.e. precured treads under Heading 4008.21 will be effective from the date on which assent was granted to the Finance Bill i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s fed into the extruder continuously. The rubber comes out of the extruder continuously in the required width and thickness. This hot material is cooled on a conveyor. After cooling the extrudate is cut at the required length of approx 3.0m, per specification. These profiles after cutting, called Preps, are stored for moulding. (2) Extrusion with Hot Feed Extruder (Hindupur and Pondy) The final batch on the skids is obtained from the mixing department is first warmed on a mixing mill before extrusion. The material in continuous sheet form, is fed into a mixing mill. When sufficient quantity is loaded on the mill, the material from the skid is cut off. The rubber gets warmed up and forms a band on one of the rolls of the mill in about 5-10 minutes. This band is cut and fed on to a conveyor in continuous strips of about 200 mm width. From the conveyor it falls on to another mixing mill for further warming with the help of a similar conveyor arrangement. The continuous strip from the mill to the extruder will be around 150 mm width and 8-10 mm thickness. The extruder takes the warmed material and extrudes it in the form of profiles of desired shape and dimension. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il, etc. are mixed in an internal mixer for a stipulated period and then dumped on to the mixing Mill. In the mixing Mill, the compound is further mixed and blended and finally taken out and cooled. This compound is known as Master Batch and this again mixed in the internal mixer along with the anti-oxidants curing agents, sulphur etc. for a given period. The mixed materials is then dumped on to mixing mill where further blending takes place. After this the compound is taken out, cooled and packed in polythene sheets for despatch. (The process of manufacture is identical for all the Envelope compound, cement compound, Gum compound, etc.) PROCESS OF MANUFACTURE OF GUM STOCKS (a) Mixing : Mixing of the compound is similar to the process involved in mixing precured tread rubber until the final batch is obtained. (b) Calendering : The final batch sheet are warmed up in a mill and the warm stock is made into a thin continuous sheet using a calender. The calendered sheet is cooled down in cooling drums, a film of polythene applied to the cushion and rolled up with a core to get the finished product. Note : The process of manufacture is identical to Bonding gum, and& ..... X X X X Extracts X X X X X X X X Extracts X X X X
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