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TMI Blog2019 (3) TMI 1420X X X X Extracts X X X X X X X X Extracts X X X X ..... socyanide. As a result of this reaction polyurethane bun is produced and this is cut into the required sizes and shapes. Another way of manufacture is to inject these two chemicals directly into moulds so that the foam gets formed in the shape of the desired article. The appellant herein is manufacturing polyurethane foam in the form of seat cushions by injecting these two chemicals into appropriate moulds. These moulds meet the requirements of the customer and they take the shape of a seat. The polyurethane foam so produced by the appellant gets used in the seats of the cars/buses or chairs etc. The foam is in the shape and size of the seat and the outer cover has to be added and it has to be fixed to the frame to complete the seat. The ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dated 25.11.2010 was issued by the Department demanding differential duty under Section 11A along with interest under Section 11AB. It was also proposed to confiscate the seized goods under Rule 25 of the Central Excise Rules, 2002 and impose a penalty under Rule 25 read with Section 11AC. For the subsequent period, the show cause notice dated 02.05.2011 was issued to the appellant demanding differential duty and proposing to imposing penalty under Rule 26 of Central Excise Rules. 3. Both these show cause notices were decided by the impugned order by the Adjudicating Authority who held that the goods in question are classifiable as seats under chapter heading 9401 and not as articles of polyurethane foam under chapter 39263010 of the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly. In the case of Vachan Foams as reported in [2017 (345) ELT 115 (Tri- Kolkata)] also it was held that polyurethane foam in shape is held classifiable under chapter heading 39. Therefore, the Learned Commissioner has erred in classifying the goods under chapter 94 holding it to be more specific heading. The impugned order therefore needs to be set aside. 6. Learned Counsel for the respondent does not dispute the facts of the case but seeks to rely on the order of the Tribunal in the case of U foam (P) Ltd., as reported at [1999 (105) ELT 232 (Tribunal)] in which held that cushion manufactured as seats should be classified under chapter 94.01. He also relies on the judgment of the Hon'ble Supreme Court in the case of CCE, Kanpur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Kurlon Limited [2014 (308) ELT 155 (Tri.-Delhi)] in which, it was held that polyurethane cut into shapes is classifiable under chapter heading 39 with consequential benefits to the assessee. Similarly, in the case of Vachan Foams forms [2017 (345) ELT 115 (Tri. -Kol.)] the Tribunal held that the polyurethane foam of regular shapes need to be classified under chapter 39 with consequential benefits. 8. The issue to be decided is whether the polyurethane foam produced in the form of seat and sold by the respondent is classifiable under CETH 9401 or CETH 3926 3010. These two entries are as follows: 9401 seats (other than those of heading 9402) whether or not convertible into beds and parts thereof. 39263010 3926 - other articles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Vachan Foams, the issue of classification between the 9401 and 3926 was not discussed. 9. We find that the issue is not squarely covered by the decisions and examine this case on merits. It is not in dispute that the articles in question are made of polyurethane and nothing else but they can be used only for seats. It is also not in dispute that they are not seats by themselves but become seats when attached to the frame and covered with upholstery. Chapter note 1(d) of chapter 94 excludes articles falling under chapter 39 from this chapter. Similarly, chapter note 2(x) of chapter 39 excludes articles falling under chapter 94. Thus, the chapter notes mutually excluding each other do not help in determining the classification. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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