Customs, Excise and Gold Tribunal - Tamil Nadu
Carborundum Universal Ltd. vs Commissioner Of C. Ex. on 25 October, 2002
Equivalent citations: 2003(85)ECC287, 2003(152)ELT178(TRI-CHENNAI)
ORDER S.L. Peeran, Member (J)
1. All the seven appeals relate to a single assessee and the issue more or less being common, they are taken up together for disposal as per law. The Misc. application is for change of cause title. The appellant company have been taken over by the M/s. Car-
borundum Universal Ltd. by the order of the High Court and the appellants have filed necessary papers seeking for change of the cause title.
2. We have considered the request made and allow the application. The cause title shall be in the name of M/s. Carborundum Universal Ltd.
3. The issue in the first two appeals viz. E/1790/98 and E/1791/98 ' relates to the demands raised by the department on the plea that an intermediate product arises during the manufacture of final product namely "coated abrasives" falling under Chapter Heading 6802.00 of the Central Excise Tariff Act. The appellants process the cotton fabrics by applying glue and amylaceous substances. The department has considered this process as to be the process of manufacture and have considered the intermediate material to be "processed cotton fabrics" falling under Chapter sub-heading No. 5901.10 of CETA and have raised the demands. Appellants took the stand that the processes carried out by applying the gum and amylaceous substances on the duty paid cotton fabrics does not bring into a new product as claimed by the Revenue as the 'processed cotton fabric'. They denied that the said item is marketable and that is required to be classified under sub-heading 5901.10 of CETA.. Further, their plea was not accepted and the demands were confirmed in the Order-in-Original No. 16/AC-V/97, dated 24-2-97 of the AC which came to be confirmed in Order-in-Appeal No. 76/98, dated 2-3-98.
4. It is contended by the learned Advocate Shri R. Raghavan that this very issue pertaining to the said allegation of arising of coated fabrics as an intermediate product came up for consideration in their own case as reported in 2001 (133) E.L.T. 124 and the Tribunal after due consideration upheld the assessee's contention that the coated fabrics does not come into existence and hence the demands raised for the intermediate product is not sus-tainable and quashed the same. He submits that the issue is squarely covered by the cited judgment and seeks for setting aside the impugned orders by allowing the appeals.
5. Heard Id. SDR who reiterated the departmental view.
6. We have considered the submissions made by both sides and notice that the issue is no longer res Integra and this very Bench in the appellant's own case has clearly laid down that 'coated fabrics' does not arise in the process of application of gum and amylaceous substances for classification under Chapter Heading 59.01 in the cited judgment. The finding recorded in Para 4 of the said judgment is reproduced herein below :-
"4. We have considered the submissions made by both sides. We have also gone through the processed undertaken by the appellants as given in the impugned order. The Commissioner (Appeals) has nowhere held that the impugned product would be covered under Heading 59.01 as a similar stiffened textile fabrics and there is no counter appeal or cross-objections by the Revenue to treat the cloth as similar abrasive textile fabric. We also observe that even the Assistant Commissioner in his adjudication order only has assumed that it may be stiffened textile fabrics without giving any clear findings for classifying the impugned product under Heading 59.01. As the same is used as backing materials for the coated abrasives and for this purpose they were using the starch, glue etc., we do not agree with the findings that the impugned goods used as backing material for the coated abrasives could be treated as textile fabric of a kind used for the outer covers of the books or the like. It does not satisfy the criteria laid down in Tariff Heading 59.01. The Id.
Counsel has rightly relied upon the decision in the case of Swnstik Coaters P. Ltd. (supra) and Solapur Zilla Vinkar Sahakari Federation (supra) where the cotton fabrics though processed with starch and dolomite has been classified under Heading 52.06. Following the ratio of these two decisions, we set aside the impugned order and hold that the impugned product is classifiable under Heading 52.06 of the said Tariff Act."
7. Applying the ratio of the above judgment/ the impugned order is set aside and Appeal Nos. E/1790/98 & E/1791/98 are allowed.
8. The appeals viz. E/1967 to 1971/98 are against the common Order-in-Appeal No. 4/98, dated 27-2-98 by which the Commissioner (Appeals) has confirmed the Order-in-Original No. 18/ACV/95, dated 29-6-95. In view of intermediate product said to have arisen as 'coated fabrics' falling under Chapter sub-heading 5901.10, proceedings were also initiated for recovery of Cess under the Textile Committee Act, 1963 in terms of Section 5A of the said Act. Appellants had taken the same stand that 'coated fabric' does not arise in the process of manufacture of 'coated abrasives' and they are not liable to pay Cess under the said Act and the assessee's plea was accepted by the AC holding that Cess is not leviable under the Textile Committee Act, 1963. Revenue was aggrieved with the said order and filed an appeal before the Commissioner (Appeals) for setting aside the Order-in-Original and for confirming the demands on Cess to be levied under the Textile Committee Act, 1963. The appellants took the plea that Cess is not leviable as the product is not the product of Textile Industry. However, the Commissioner (Appeals) negatived the plea and held that packing cloth is still a textile product and therefore as the same has been captively consumed, the Cess is leviable under the Textile Committee Act, 1963.
9. Ld. Counsel Shri R. Raghavan submitted that as the Tribunal has already decided in their own case cited supra that, "coated fabrics" does not arise as intermediate product for classification under Chapter 59, the question of invoking the Textile Committee Act for levy of Cess does not arise. He prayed for setting aside the order of the Commissioner holding the Revenue's stand.
10. Ld. SDR reiterated the Revenue's view.
11. On a careful consideration of the submissions, we notice that the Tribunal has already held in the assessee's case as noted supra that an intermediate product does not arise for purposes of classification as 'coated fabric' under Chapter Heading 59.10 and as such the ratio of the cited judgment has been applied in the demands raised against the assessee which is a subject matter of consideration in Appeal Nos. E/1790 & 1791/1998. We have already held that 'coated fabric' does not arise and have allowed the appeals. The consequence is that no Cess is leviable under the Textile Committee Act, 1963 as 'coated fabric' does not arise in the course of manufacture of 'coated abrasives' and hence the appellants' contention is accepted for setting aside the impugned order and allow these appeals, All these appeals are thus allowed with consequential relief, if any, as per law.