Customs, Excise and Gold Tribunal - Tamil Nadu
Mrf Limited vs Commissioner Of C. Ex. on 20 July, 1998
Equivalent citations: 1999(105)ELT619(TRI-CHENNAI)
ORDER V.K. Asthana, Member (T)
1. These 19 appeals were listed to be heard together because they all deal with a common issue namely classification and dutiability of Dipped/Rubberised Tyre Cord Fabrics. Since there are minor factual differences in all these appeals, therefore, they are being considered one after another.
Appeal No. E/Stay/888/98 and E/1307/98 :
2. To hear this appeal, appellants are required to deposit an amount of Rs. 1,40,93,760/- as confirmed in order-in-original No. 1/Commr.Goa/CX/98, dated 20-2-1998. Since the matter lies on a short compass and a number of decisions on the same subject exist by various Benches of the Tribunal, therefore by common consent, we waive this pre-deposit and stay the recovery thereof and proceed to consider the appeal on merits itself.
3. Heard learned Senior Advocate Shri Joseph Vellapally, Sr. Advocate and Shri Raju K. Lukose, Advocate for appellants and Shri R. Victor Thiagaraj, learned SDR, and Shri S. Kannan, learned }DR for Department.
4. Learned Senior Advocate for appellants at the very outset submitted that the issue of classification of the subject goods is already covered by decisions of the tribunal and is therefore no longer res Integra. He cited Order No. 1790-1807/98/WRB, dated 10-6-1998 wherein it has been held that the said product was classifiable under Chapter Heading 59.05 (now 59.06). It was also held therein that the duty demand, if any, on applying such classification may be redetermined by the Commissioner according to law. The Bench also set aside the order imposing penalty on the appellants. Learned Senior Advocate submitted that the said decision relied on an earlier decision in the case of Vikrant Tyres Ltd., as reported in 1997 (90) E.L.T. 178 (Tribunal) and a still earlier decision in the case of Falcon Tyres Limited as reported in 1996 (88) E.L.T. 450 (Tribunal) wherein also the Rubberised/Calendered fabrics were classified under Chapter Heading 59.05. Ld. Sr. Advocate also submitted that the issue for the material period was governed by Bombay-I Collectorate's Trade Notice No. 62/87, dated 29-8-1987 wherein also Dipped Fabrics were classified under Heading 59.05 (now 59.06). He further submitted that after such a classification, there was no additional duty of excise (goods of special importance) leviable on the goods as Heading 59.05/59.06 did not find any mention in the schedule to the said Act. He further submitted that in view of his aforesaid submissions regarding the matter not being res integra and the decisions cited above, for the purpose of these 19 appeals, hence he does not press any other arguments as contained in the grounds of these appeals, including any other classification or whether the goods are marketable and therefore dutiable or otherwise. He was at pains to clarify that these submissions are not pressed only in all these appeals. He further submitted that though there is another circular by the CBEC issued as later as 23-1-1998, as is held in the case of Poulose and Mathen v. C.C.E. reported in 1997 (90) E.L.T. 264 (S.C.), wherein the Hon'ble Apex Court has said that in such cases earlier circular would apply.
5. Heard learned SDR and JDR. They submitted that vide F.No. 59/6/97-CX-I, dated 3-1-1998, it has been clarified that Grey Tyre Cord after rubberisation and clandering etc. are rightly classifiable under Heading 59.02 as processed tyre and fabrics. They further submitted that as per Heading 59.06 of the Central Excise Tariff Act, 1985 'Rubberised textile fabrics, other than those of Heading 59.02' alone fall under 59.06. They submitted that because of this clear exclusion, the present item would fall under sub-heading 59.02 which is said circular now clarifies. They also submitted that on page 893 of the new edition of HSN, description against Heading 59.02 itself is very clear because it reads as follows:
"Tyre cord fabrics of high tenacity yarn of Nylon or other polymides, polyesters or viscose rayon."
Note below in this entry clearly specifies that this heading covers tyre cord fabrics whether or not dipped/impregnated with rubber or plastics and therefore the said goods are clearly covered by this entry. They submitted that as per Interpretative Rule (1) of the Rules for interpretation of the schedule to Central Excise Tariff Act, it is clearly laid down that the classification shall be determined according to the terms of the headings. In this case the Heading 59.02 clearly covers Tyre Cord Fabrics etc. and therefore this rule should be applied in this case and the goods classified under 59.02. They further submitted that as per note 4 of Chapter 59, particularly, the explanation at the said para (c) thereof, it is clearly provided that Heading 59.06 does not apply to plates, sheets or strip of cellular rubber, combined with textile fabric where the textile fabric is present merely for reinforcing purposes (Chapter 40) or textile product of Heading No. 58.10 and argued that in the case of tyre cord fabrics dipped or rubberised, the textile fabric is present merely for reinforcing, as the rest of the work is normally done by the rubberised element. Therefore this note would also exclude the product from 59.06.
6. Learned SDR further submitted that since the aforesaid circular of 1998 of the Board is not in accordance with the aforesaid decisions of the Hon'ble Tribunal cited by learned Sr. Counsel, therefore, the matter deserves to be placed before a Larger Bench for reconsideration.
7. At this point, learned Senior Counsel rose to rebut that firstly, as per the decision of the Hon'ble Apex Court in the case of Poulose and Mathen v. C.C.E. as reported in 1997 (90) E.L.T. 264 (S.C.) as well as that of C.C.E. v. Usha Martin Industries reported in 1997 (94) E.L.T. 460 (S.C.), the department can only take action under their circular which was in force at the relevant time as they cannot argue contrary to the stand of the Board during the relevant period. During the relevant period in all these appeals, the department stand was that the goods were classifiable under 59.05 (now 59.06). He further submitted that remedial measure available to the department against these decisions of the tribunal is an appeal to the Apex Court and not a circular contrary to these decisions.
8. We have carefully considered the arguments on both sides. We note that this tribunal is a precedential court. We also note that any clarification or circular issued by the department is not legally binding on us. These are well settled laws and do not need any further reiteration. We find that in the 3 decisions of the CEGAT cited by learned Sr. Counsel supra, the product classified is same. One of these decisions (the latest) is by the West Regional Bench whereas the earlier are emanating from the IVth Court at Delhi. In view of these, we are bound to follow the precedence established by these decisions as we are sitting in a Co-ordinate Bench. The department has not led any ground to show that these decisions could be distinguished on facts with the present appeals under consideration. Therefore, we respectfully apply the ratio of the said three decisions and hold that Dipped Tyre Cord Fabrics/Rubberised/Calendered Tyre Cord Fabrics would be classifiable under Heading 59.05 (now 59.06). We further order that the duty demand, if any, on applying such classification may be redetermined by the jurisdictional Commissioner according to law. Accordingly we set aside the impugned order-in-original dated 20-2-1998 and the appeal succeeds accordingly.
(ii) Appeal No. E/492/98 :
9. This appeal arises from Order-in-Original No. 11/Commr. Goa/CX/97, dated 31-10-1997 and the entire duty and penalty amounts were stayed vide Stay Order No. S/361/98, dated 12-5-1998. In view of the discussions in the aforesaid Appeal No. E/1307/98 and as the products involved are the same, we therefore arrive at the same conclusion and hold that the products are classifiable under Heading 59.05 (now 59.06). We also order that the duty demand, if any, on applying such classification may be redetermined by the jurisdictional Commissioner according to law. Accordingly, we set aside the order-in-original dated 31-10-1997 and the appeal succeeds accordingly.
(iii) Appeal No. E/241-243/98 :
10. These appeals arise out of Order-in-original No. 4/97, dated 24-10-1997. Appellants had deposited an amount of Rs. 1.5 crore in compliance to the Stay Order Nos. 149-151/98, dated 19-2-1998. In view of the discussions in the aforesaid appeals, and as the products involved are the same, we therefore arrive at the same conclusion and hold that the products are classifiable under Heading 59.05 (now 59.06). We also order that duty demand, if any, on applying such classification may be redetermined by the jurisdictional Commissioner according to law. Accordingly, we set aside the impugned order-in-original dated 24-10-1997 and the appeals succeed accordingly.
(iv) Appeal No. E/730-741/98 :
11. These appeals arise out of order-in-original No. 14/Commr. Goa/CX, dated 15-12-1997. The appellants between 10-2-1998 and 22-6-1998 have deposited as pre-deposit a sum of Rs. 8 crores as directed vide Stay Order No. S/404-415/98, dated 21-5-1998. In view of the discussions in the aforesaid appeals, and as the products involved are the same, we therefore arrive at the same conclusion and hold that the products are classifiable under Heading 59.05 (now 59.06). We also order that duty demand, if any, on such classification may be redetermined by the jurisdictional Commissioner according to law. Accordingly, we set aside the impugned order-in-original dated 15-12-1997 and the appeals succeed accordingly.
(v) Appeal No. 62, 63/98 :
12. These appeals arise out of order-in-original No. 5/97, dated 25-9-1997, wherein the Commissioner (Adjudication) has classified the said product under 59.05 (now 59.06) and dropped the demands. In this case, learned Senior Advocate submitted that in view of the citations of the tribunal led by him which holds classification on the same lines as the impugned order-in-original, he has been instructed to pray that the appeals may be permitted to be withdrawn as not pressed.
13. In view of our aforesaid decisions in the other appeals (S. No. 1 to IV para 2 to 11) to apply the ratio of the said three decisions of the tribunal, we find that since the order-in-original itself is in consonance with three decisions of the tribunal as well as our own decisions contained above, therefore the prayer of the learned Senior Advocate for appellants merits consideration and the appeals are dismissed as not pressed. However, learned Sr. Advocate submitted that the said prayer is with liberty to file cross objections, in case at future date, the Revenue agititate this issue in any manner. We consider this prayer to be fair and accede to it.
14. Therefore, all the 19 appeals are accordingly disposed of by this common order as recorded above.