Customs, Excise and Gold Tribunal - Delhi
Collector Of Central Excise vs M.R.F. Ltd. on 30 September, 1999
Equivalent citations: 2000(68)ECC598, 2000(115)ELT85(TRI-DEL)
ORDER
K. Sreedharan, J. (President)
1. Revenue questions the correctness of the appellate Order passed by Collector of Customs and Central Excise (Appeals), Bombay holding that Bead Wire Rings used in the manufacture of tyres are not marketable items and hence not excisable to duty.
2. Respondent is engaged in the manufacture of tyre and other rubber products. In manufacturing the tyres they make Bead Wire Rings. Those Bead Wire Rings were classified by them under Chapter Heading 8308.00 giving the broad description as Beads and Spangles of base metal. Department issued notice requiring them to show cause why the said articles should not be classified as other articles of iron or steel coming under Chapter sub-heading 7326.20. Respondent filed their detailed objections to the notice. By order-in-original, dated 22-3-1993, Assistant Collector, Panaji modified the classification as coming under Heading 7326.20. This order was taken in appeal. The appellate authority came to the conclusion that Bead Wire Ring is not a marketable item and hence not falling under any of the Chapters and not excisable commodity under the Schedule. Aggrieved by this order, Revenue has come up in appeal.
3. The appellate authority, namely, Collector of Central Excise and Customs, Bombay in the impugned order dealt with identical goods manufactured by three other manufacturers, namely, M/s. Dunlop India Ltd., M/s. Metro Tyres Ltd. and M/s. Goodyear (India) Ltd. In the case of those three manufacturers, three different Collectors of Central Excise took the view that Bead Wire Rings are not marketable and hence not chargeable to duty. Case relating to M/s. Dunlop India Ltd. was decided by the Collector of Central Excise (Appeals), Madras in Appeal No. 173/89. Collector of Central Excise, Ludhiana decided the issue relating to M/s. Metro Tyres Ltd. as per or-der-in-appeal, dated 23-4-1991, while in the case of Goodyear (India) Ltd. the decision was of Collector of Central Excise, Delhi in Appeal No. 138/91, dated 31-1-1991. Those orders have not been got reversed by any course known to law.
4. The appellate authority, after going into the details of manufacture and use of Bead Wire Rings, came to the conclusion that they are steel wires in circular shape coated with rubber compound by mechanical operation and are wrapped with rubberised bead chaffer fabric. He has also found, as a matter of fact, that such product has very short shelf life and that they cannot be retained as a commodity to be used as and when required. On facts, the Collector further found that by nature of the material used the quality gets affected which will result in failure of the product. As a result of this finding of fact, he came to the conclusion that the product which is sought to be charged to duty is not a marketable commodity. This Tribunal, after an elaborate survey of all the relevant decisions of the Supreme Court, held :
"It is settled law that marketability being an essential attribute of goods, if the product at the stage of removal is not marketable, the question of classification and assessment of Central Excise Duty does not arise."
[1999 (111) E.L.T. 807, Collector of Central Excise v. United Felt and Carpet] So marketability is a basic condition to be satisfied for goods to become excisable to duty. The Collector of Customs and Central Excise, the lower appellate authority, as a matter of fact, found that Bead Wire Rings are not marketable. No material has been placed before us to take a different view. So the goods in question are not to be classified under the Central Excise Tariff. In this view, we do not find any merit in this appeal. Appeal is accordingly dismissed.