Customs, Excise and Gold Tribunal - Delhi
Bata India Ltd. vs Cce on 31 May, 2004
Equivalent citations: 2004(95)ECC221, 2004(174)ELT477(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1. The issue involved in this appeal, filed by M/s. Bata India Ltd., is whether the benefit of exemption Notification No. 48/96-CE dated 10.8.96 is available to footbed insoles manufactured by them.
2. Shri M.C. Barua, learned Manager (Legal) of the Appellants, submitted that M/s. Bata India Ltd. manufacture footwear and component parts thereof; that the "footbed insoles" manufactured by them are component parts of footwear and are sent from their Faridabad factory to their Batagunj factory where they are used in the manufacture of footwear; that Notification No. 49/86-CE exempts "all component parts of footwear, except soles, half soles, heels, and soles and heels combined"; that the Commissioner (Appeals) has rejected their appeal denying them the benefit of Notification on the ground that the insole is also a sole which is not covered under description of goods in Notification. He, further, submitted that initially the Assistant Commissioner had denied the benefit of the Notification under Order-in-Original No. 58/93 dated 28.7.93 which was remanded by the Commissioner (Appeals) under Order-in-Appeal No. 396/93 dated 23.11.93; that the Assistant Commissioner was specifically directed to examine the case after taking necessary market/trade enquiries; that they filed Certificates of various manufacturers and dealers in footwear and component parts wherein it was clearly certified that soles and insoles are two different and independent component parts of footwear and are also so treated and regarded in the footwear industry and there can be no scope to treat the two together as the same thing; that it was also certified therein that soles and insoles are separately bought and sold in the market and that no one in the trade ever treats insoles as parts of soles; that the Revenue has not produced any other evidence of any nature from trade/market; that it is well settled that in remand cases, the Adjudicating Authority has no jurisdiction to go beyond the specific terms of the remand Order as held in the case of Hyderabad Industries v. CC, 1992 (62) ELT 751 and New India Sugar Mills Ltd. v. CCE, 2000 (91) ECR 399. He also contended that since the correctness of these certificates has not been disputed, these cannot be ignored and brushed aside by alleging that these traders and manufacturers were not registered with the Central Excise Department; that in addition, they had also filed the affidavit from Shri Priti Bhusan Ghosh Dastidar, a Fellow of Institute of Materials (U.K.) who has also opined that sole and footbed insole are two complete different component parts of footwear and are differently known and dealt with in trade and commercial parlance. The learned manager mentioned that soles are those parts of footwear which are put at the bottom of the footwear and come in contact with ground whereas the gootbed insoles are fixed above the soles and below the uppers; that soles and in-soles perform different functions in footwear and insoles are incapable of being used as soles by themselves. He relied upon the decision in Agglomerated Marbles Ltd. v. CCE, 2003 (152) ELT 22 (SC) wherein it has been held that when the Appellant produced evidence and material to show as to how the goods were known technically and commercially and when no negative material was produced in rebuttal by the Department, the order passed by the lower authorities against the assessee cannot be sustained. Reliance has also been placed on the decision in Hindustan Ferodo Ltd. v. CCE, 1997 (89) ELT 16 (SC) and UOI v. Garware Nylons Ltd., 2003 (86) ECC 404 (SC) : 1996 (87) ELT 12 (SC).
3. He, finally, submitted that no enquiry report on the issue involved has been relied upon by the Department; that the reliance by the Assistant Commissioner on Webster's Third International Directory (sic. Dictionary) is totally misconceived as the definition of sole given therein is not at all satisfied in respect of in-soles; that the sole itself may be in single piece or may be a combination of different layers and it is such soles which are referred to in the definition; that the definition nowhere mentions about insoles; that in the New International Webster's Comprehensive Dictionary of the English Language, the expression "sole" has been defined to mean "the bottom surface of a shoe, boot, etc. whereas the expression "insole" has been defined to mean "the fixed inner sole of a boot or shoe or removable inner sole placed without a shoe to improve its fit or as a protection against dampness"; that thus the said Dictionary meaning would also clearly indicate that the objects and functions of soles and insoles are completely different and these are different commodities.
4. Countering the arguments, Sh. Kumar Santosh, learned SDR, submitted that the Commissioner (Appeals) has mentioned in the impugned Order that departmental enquiry in the matter did not yield any result as none of the manufacturers of Delhi/Faridabad gave their opinion on the matter as they had not cleared insoles; that manufacturers like M/s. Lakhani, M/s. Baluja, Deamon Shoes, Rex Shoes and action Shoes have refrained from giving their opinion as they were not clearing insoles as such; that in view of this, the Commissioner (Appeals) has examined the matter in detail and observed as under:
"SOLE: The part of a shoe or other article of footwear on which the sole of the foot rests and upon which the wearer treads (emphasis added); specif: a shaped piece of leather, rubber or other material forming the bottom or a layer of the bottom (emphasis added) of a shoe and often excluding heel.
(ii) Technical literature of Footwear Design and Development Institute (FDDI), Ministry of Commerce 'Swayam Siddh' Product Knowledge incorporating Glossary of Terms Relating to Footwear by Bureau of Indian Standards:
Insole (page 40): a) A piece of leather or any other suitable substitute material being an exact replica to the shape of the bottom of the last to which the upper, sole, welt, etc. are attached directly or indirectly. (b) The part of soling (emphasis added) on which the foot rests either directly or separated by a loose insole.
(iii) The principal parts of the shoe as per technical literature mentioned above (page 61) "The major parts of the shoe are of course the upper, the sole and the heel. In addition, there is in most constructions another sole (emphasis added), next to the foot, called the sole which shoemakers consider the backbone or foundation of the shoe....."
5. The learned SDR, mentioned that the Commissioner (Appeals) has given a specific finding, based on the definitions given in Technical Literature and Dictionary and the sample shown to him, to the effect that sole of a footwear generally consists of three layers -- outer sole, middle sole and inner sole. The outer sole alone comes into contact with the ground and, therefore, is made of tough material to withstand friction and wear and tear; that is the outer layer of the sole; that then comes the middle sole which is generally meant to give the shoe the necessary thickness and is, therefore, made of softer and more flexible material; that finally there is the insole or inner side which forms the inner surface of the sole and is, therefore, called insole; that the technical literature describes insole as "part" of soling" and "another sole"; that thus the benefit of Notification is not available to the Appellants.
6. We have considered the submissions of both the sides. Notification No. 49/86-CE dated 10.2.1986 exempts all component parts of footwear, except soles, half soles, heels, and soles and heels combined if no credit of the duty paid on the inputs used in the manufacture of such goods has been availed of under Rule 57A of the Central Excise Rules, 1944. The Appellants are seeking the said exemption in respect of footbed insoles on the ground that 'insole' is different from 'sole' and the same is not excluded from the purview of the Notification. The Assistant Commissioner has denied the benefit of the Notification on the ground that sole of a footwear generally consists of three layers -- outer sole, middle sole and inner sole and the Notification does not exclude only 'outer sole' and as the Notification excludes 'sole' as such, the benefit of Notification is not available to the Appellants. This finding of the Assistant Commissioner is based on the technical literature which defines 'insole' as 'a piece of leather or any other suitable substitute material being an exact replica to the shape of the bottom of the last to which they upper, sole, welt, etc. are attached directly or indirectly." Insole is also described as the part of soling on which the foot rests or another sole. The Appellants have referred to various certificates obtained from dealers and manufacturers to the effect that soles and insoles are two different parts. However, not a single certificate has been brought on record. They have brought on record an Affidavit of Sh. Priti Bhushan Ghosh Dastidar who is working in the Research & Development Department of the Appellant Company, His affidavit is not to be relied upon, being not of an independent party. Further, we observe that besides making the statement that sole and insole are two completely different component parts the affidavit does not mention any technical reason for saying so. It also does not negate the specific finding reached by the Assistant Commissioner that sole of a footwear consists of three layers - outer sole, middle sole and inner sole. The Commissioner (Appeals) has also concluded in the impugned Order that 'outer sole or in-sole or mid-sole is a sort of sole and each of them is a part of shoe/footwear...." We, therefore, hold that insole is also a sole which is excluded from the purview of Notification No. 49/86-CE. Accordingly, we rejected the appeal.