Customs, Excise and Gold Tribunal - Delhi
Sheela Foam Pvt. Ltd. vs Cce on 10 September, 2003
Equivalent citations: 2003(90)ECC710, 2003ECR413(TRI.-DELHI)
ORDER V.K. Agarwal, Member (T)
1. In this appeal filed by M/s. Sheela Foam Pvt Ltd. the issue involved in whether the goods manufactured by them are classifiable under Sub-heading No. 3921.10 of the Schedule to the Central Excise Tariff as claimed by them or under Heading No. 94.04 of the Tariff as confirmed by the Commissioner (Appeal) under the impugned Order.
2. Shri Parveen Sharma, learned Advocate, submitted that the Appellants manufacture P.U. Foam sheets, Composite sheets, Taped PU Foam sheets and cushions; that the process of manufacture in brief is that PU Foam Blocks are obtained by chemical reaction from inputs namely Polyol and Isocynates; These blocks are thereafter cut into blocks of regular geometrical shape by removing side/top/bottom skins; These Blocks are further cut into specific dimensions to result in PU Foam sheets; that PU Foam sheets in dispute have the dimensions as 36" x 72" x 4"; that in some cases self adhesive textile tape is affixed on the sides which bear the Brand name of the appellants and are described as Taped PU Foam sheets; that cushion in dispute are nothing but PU Foam sheets are generally used by the customers as Mattresses after covering them with textile material or the cloth covers and cushions are used as sofa seats by the customer after covering the same with textile material; that from their factory the goods are cleared in the form of PU Foam sheets only without any textile covers. The learned Advocate, further submitted that the impugned goods are classifiable under Heading 39.21 only even if they become articles ready for use; that PU Foam sheets are not used as Mattresses as such but only after covering the same with textile material and covers, etc.; that what is relevant for classification of a product is the form in which it is cleared from the factory of manufacture; that since the product in question are bare PU Foam sheets when they are cleared from the factory of the appellants they are classifiable under Sub-heading 3921.11. He relied upon the clarification issued by Central Board of Excise & Customs vide letter dated 17.12.91' that the Board under this letter has circulated a copy of letter dated 25.7.91 received from Nomenclature and Classification Directorate of Customs Cooperation Council, Brusesels wherein it has been clarified that Mattresses of expended foam of sponge rubber, made by moulding process would be classified under Heading 94.04 and expended Polyurethane sheets, merely cut into rectangles would be classified in C.C.C.N. Heading 39.01, despite the fact that they were intended for use as Mattresses; that Meerut Commissionerate issued a Trade Notice No. 4/93 dated 18.1.93 mentioning therein that Polyurethene Foam sheet obtained by cutting of PU Foam Blocks for use as Mattresses will merit classification under Heading 39.21 of the Central Excise Tariff. The learned Advocate contended that these two clarifications are very specific to the product in dispute and the department is bound by these clarifications. Reliance has been placed on the decision in the case of Paper Products Ltd vs. CCE, 1999 (112) ELT 765 (SC) and CCE vs. Dhiren Chemicals Ltd. - 2002 (143) ELT 19 (SC).
3. The learned Advocate also referred to Note 10 to Chapter 39 according to which the expression "Plates, Sheets, Film, Foil, and Strip" in Heading 39.21 applies only t plates, sheets, film, foil, and strip and to blocks of regular geometric shape whether or not printed or otherwise surface worked, uncut or cut into rectangles (including squares) but not further worked (even if when so cut they become articles ready for use); that it is mentioned in the H.S.N. Explanatory Note below heading 39.21 that plates, sheets, etc. whether or not surface worked with ground edges, drilled, milled, hemmed twisted, framed or otherwise worked or cut into shapes other than rectangular (including square) are generally, classified as articles of Heading 39.18, 39.19 or 39.22 to 39.26. He, therefore, contended that the impugned product will not be classified under Heading 94.04.
4. Countering the arguments Shri Vikas Kumar, learned SDR, submitted that Heading 94.04 specifically covers mattress support; articles of bedding and smaller furnishing (for example, mattresses, quilts, cushions, etc.) fitted with springs or stuffed internally fitted with any material or of cellular rubber or plastic, whether or not covered; hat as mattress of cellular rubber or plastic whether or not covered are specifically mentioned under Heading 94.04 in H.S.N, the products manufactured by the Appellants have to be classified appropriately under the said heading only; that it is not disputed by the Appellants that PU Foam sheets are generally used as mattresses by the users; that it has been held by the Supreme Court in the case of CCE vs. Fuse Bas El toto Ltd., 1993(67) ELT 30 (SC) that in the absence of statutory definition o an article. its classification is t be determined on the basis of understanding in common parlance and its primary function and utility; that the Supreme Court held that "identity of an article is associated with its primary function and utility. The names of certain products have functional association in the mind of the consumers. There is a mental association in the mind of consumer in respect of certain products keeping in view the utility of the product an also the reputation the name of the product has acquired in the market and among the consumers". The learned SDR mentioned that the product in question is known in the market as mattress only. Finally, he submitted that the Tribunal in which is relevant for classification. The Tribunal had also considered the Trade Notice 4/1993 dated 18.1.93 and observed "that according to the Trade Notice PU Foam sheets obtained by cutting of PU Foam block for use as mattresses will merit classification under Heading no. 39.21. The goods presented for assessment should be sheets and not mattresses even when the sheets have been obtained by cutting of the PU Foam for use in mattresses. The Trade Notice does not provide that mattresses as such will be classifiable differently when they are specifically covered by Heading No. 94.04."
6. Regarding clarification received from the Customs Cooperative Council the Tribunal had mentioned "that the issue was of flexible PU Foam slabs or sheets for use as mattresses but not of mattresses as such. The Committee has opined that the expanded PU Foam sheets merely cut into rectangle even if intended for use as mattresses were classifiable under Heading NO. 39.01". Thus following the ratio of the Tribunal's decision in the Appellants' own case we hold that where PU Foam sheets cut to size of mattress have been affixed with industrial tape on the edges, the products have become mattresses classifiable under Heading 94.04. In cases where industrial tape has not ben affixed their own case CCE, Meerut vs. Sheela Foam Pvt. Ltd., 2001 (138) ELT 1387 has held that PU Foam Sheets cut to size of mattresses with industrial tape affixed on the edges, being sheets "further worked" are classifiable as mattresses under Heading 94.04 of the Tariff; that this decision of the Tribunal has not been set aside by the higher appellate forum.
5. We have considered the submissions of both the sides. We observe that this Tribunal has considered the question of classification of PU Foam sheets cut to size of mattresses with industrial tape affixed on the edges in the appellants' own case as reported in 2001 (138) ELT 1387 (Tribunal). The Tribunal after considering the submissions of both the sides and Note 10 to Chapter 39 of the Central Excise Tariff observed that "sheets as such were not usable as mattresses as they were pliable to be dispersed, disheveled or bulged out or wither out. Sheets were not usable as mattresses unless they were further worked, reinforced or supported on the edges. The goods were admittedly mattresses. By the process of reinforcing and support of the edges the sheets had assumed the shape of mattresses.: The Tribunal, further, observed that "when the sheets and mattresses are separately described in the Tariff, it is the form in which the goods are cleared and the products are in the form of PU Foam sheets cut to sizes of mattresses/cushion they will remain classifiable under Heading 39.21 in view of the clarification from the Customs Cooperative Council. The matter is thus remanded to the Jurisdictional Adjudicating Authority to recompute the amount of duty in the light of the classification ordered in this Order. While recomputing the duty the assessale value has to be re-determined treating the price as cum duty price in terms of the decision of the Larger Bench of the Tribunal in the case of Sri Chakra Tyres Ltd. Vs. CCE, 1999 (32) RLT 1and CCE vs. Maruti Udyog Ltd. - 2002 (49) RLT 1 (SC).
The appeal is disposed of in the above terms.