TMI Blog2001 (12) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod 1-9-1994 to 6-12-1994). The duty has been confirmed by treating the said intermediate product as double textured rubberised fabric and by classifying the same under Heading 59.05 of the Central Excise Tariff. 2. As per the Revenue inasmuch as the said intermediate excisable product was captively used by the appellant in the manufacture of exempted footwear, the exemption under the provision of Notification No. 217/86-C.E., dt. 2-4-1986 was not available. The demand has been raised only up to 6-12-1994 as a specific Notification No. 143/94, dt. 7-12-1994 granting exemption to rubberised textile fabrics falling under Heading 59.05, if captively used for manufacture of exempted footwear was issued. 3. Shri S.K. Bagaria, learned Advocate appearing for the appellant submits that for the manufacture of rubber canvas footwear the appellant buys fully manufactured fabric, rubbers and chemicals from the market. Rubbers and chemicals are mixed in mixtures. The mixture is warmed at a temperature of 70 C to 80 C immediately before use. This wormed and sticky mixture is put on to three bowl calendering machine where it passes through upper two rollers so as to facilitate its simultane ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the vulcansing chambers. 3.2 Based upon the above facts, it is the submission of the learned Advocate that in view of the short shelf life and in view of the raw, crude and elementary condition of the product, it is not possible or feasible to sell or market the said fabrics. He submits that the appellant had produced a number of evidences in the shape of experts opinion before the adjudicating authority to stress upon their plea that the product as emerging in their factory is not marketable. He drew the attention of the Bench to the following experts opinion :- (a) Certificate dt. 13-2-1994 from Footwear Design Development Institute, Ministry of Commerce, Government of India. (b) Affidavit of well-known Rubber Plastic Technologist, Mr. Somnath Chakravarty, M.Sc., Ph. D., FPRI, FICS FIC. (c) Affidavit of Mr. Parvati Pada Mukherjee, Rubber Plastic Technologist and having experience of about 50 years in Rubber Plastic Industry. (d) Affidavit of Mr. Maharaj Krishan Khanna, the appellant s Production Manager. Shri Bagaria submits that as against the above evidence adduced by the appellant, the department has not produced any evidence to show the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be beneficial to reproduce from the various books, as quoted by the learned Advocate at this stage. (a) The Vanderbilt Rubber Handbook published by P.T. Vanderbit Company Inc. Norwalk All of the processed elastomer coated fabric, to be made into a finished material, must go through the cycle of curing. The vulcanisation is necessary to give the proper physical properties to the rubber compound. Curing, or vulcanising, is generally accomplished by festooning in a dry heat chamber under specific conditions of time of temperature. These conditions are adjusted to the rubber compound and the specific requirements of the finished goods. (Pg. 5 of Suppl. P.B.) (b) Concise Encyclopaedia of Polymer Science and Engineering : Useful rubber articles, such as tyres and mechanical goods, cannot be made without vulcanization. Unvulcanised rubber is generally not very strong, does not maintain its shape after large deformation, and can be very sticky; it has about the same consistency as chewing gum . (Pg. 7 of Suppl. P.B.) The term vulcanization is generally applied to rubber or elastomeric materials. These materials forcibly retract approximately to their original s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 606/70 appearing at pages 331 to 334 of the appellants paperbook has directed the Union of India to refund the amount collected by the Revenue as Central Excise duty in respect of friction cloth used in the process of manufacture of footwear inasmuch as the matter was not opposed by the excise authorities. 3.6 Shri Bagaria also relied upon the following judgments in support of his contention that the unvulcanised fabrics quoted with rubber compound emerging at an intermediate stage cannot be held to be dutiable. (i) 1997 (89) E.L.T. 538 - CCE v. National Insulated Cable Co. (I) Ltd. (ii) 1990 (50) E.L.T. 10 - BMF Beltings Ltd. v. UOI (iii) 1987 (31) E.L.T. 671 - Brammer V. Link Belling (I) Ltd. v. ACCE (iv) 1993 (67) E.L.T. 140 - CCE v. Bharat Electronics Plastics (v) 2000 (120) E.L.T. 28 (S.C.) = 2000 (39) RLT 895 - CCE v. K.K. Rubber Co. Pvt. Ltd. (vi) 2000 (117) E.L.T. 529 - CCE v. United Phosphorus Ltd. (SC) (vii) 1996 (86) E.L.T. 457 - Nirlon Synthetic Fibres Chemicals v. CCE (SC) (viii) 1995 (76) E.L.T. 241 - Moti Laminates Pvt. Ltd. v. CCE (SC) (ix) 1994 (74) E.L.T. 22 - Indian Cable Co. Ltd. v. CCE (SC) (x) 1989 (43 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er in the said rubberised fabrics, the rubber content pre-dominated by weight. He submits that the appellant had filed copies of production guides relating to the said footwear, copies of quality specification, copies of certificates from the suppliers of the fabrics, copies of costs cards, copies of daily production report, etc., to show that so called rubberised textile fabric prepared for being used in manufacture of Gussed brand of footwear never exceeded more than 500 gms., per square metre in weight and rubber always pre-dominated by weight in the said fabrics. They also made submission as regards the report of chemical examiner and filed an affidavit of Shri M.K. Khanna. In case of doubt, a request was made for re-testing of the samples. All these factors were ignored by the Commissioner. 3.10 Shri Bagaria also assailed the order of the Commissioner on the point of limitation. He submits that the entire facts were known to the Revenue and there is no ground for invoking the longer period. He submits that the dispute about the fabric was going on before the various High Courts including the Hon ble High Court of Calcutta who gave the verdicts in their favour and in such cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, therefore, cannot be called goods. It may be seen that even by party s own admission these goods were capable of being stored for a period of two to four weeks, two weeks during summer and four weeks during winter. Periods of two weeks and four weeks cannot be considered to be short shelf life. It is also admitted fact that the goods were taken out of the appellants factory to job workers for stitching, etc. Some of the important decisions of Tribunals on this topic are worth mention - In the case of M/s. Indian Oxygen Ltd. v. CCE, Bhubaneshwar reported in 1997 (89) E.L.T. 557 (T), it was held in Para 2.4 that a short shelf life was immaterial. Para 2.4 is reproduced for ease of reference : 2.4 We have carefully considered the pleas advanced from both sides. We agree with the adjudicating authority that a product different from its inputs (Jute stick powder, bags and liquid oxygen), namely Liquid Oxygen Explosive (LOX) has come into existence. Therefore, manufacture of goods has taken place. The fact that the goods are actually being marketed as LOX is clearly on record in view of the invoices being issued by the appellants to that effect. In the face of this evidence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Admittedly the inputs here are textile fabrics having sandwich of rubber compound and mixtures in between. The said lamination is passed between roller heated at 70 degree to 80 degree C. What emerges out of the roller is rubberized fabrics having rubber between two layers of textiles. The inputs and outputs are entirely different things. The commodity that emerges is a distinct commodity having its own identity, name and specific use and is totally different from the raw materials. The excisability of such fabrics is, therefore, in no doubt. MARKETABILITY : It has been held that marketability is a must for anything to qualify as goods. Marketability does not imply the actual sale and purchase but ability of being bought and sold in market. The product in question is admittedly taken out for job work outside the factory. The same after job work is brought back by the appellant for further use. That in itself is a good proof about the marketability of the product. In case a canvas shoe manufacturer does not have the machinery for manufacture of this double textured fabrics, it can always buy their product from Bata or any other manufacturer. In view of that marketability of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of that notification as rubber was not predominating. CLASSIFICATION : Once it is established that the impugned item is goods , the same is to be classified under the Central Excise Tariff. The best possible classification occurs under the sub-heading 5905.10 of the CETA, 1985. LIMITATION : This is a fit case for invocation of proviso to Section 11A of the Central Excise Act. Even though there was a specific High Court judgment of Hon ble High Court of Calcutta the party did not declare manufacture of these rubberized fabrics in their statutory record or declaration. Some of the relevant case laws on the subject are indicated below :- (1) 1996 (82) E.L.T. 610 (T) - Century Cement v. CCE (2) 1994 (70) E.L.T. 628 (T) - CCE v. Densons Pultroteknic (3) 1993 (68) E.L.T. 530 (All.) - S.P. Gupta Sons v. Union of India (4) 1996 (85) E.L.T. 154 (T) - Gujarat Ambuja v. CCE (5) 1994 (71) E.L.T. 489 (T) - Leisureland Pvt. Ltd. v. CCE. 5. In their rejoinder, the appellants submit that the issue is not about vulcanization of rubber but is as to whether any rubberised textile fabrics can be manufactured or come into existence as a commodity without vul c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pable of being marketed. For this proposition, the appellants have referred to a number of decisions of the Tribunal, various High Courts as also of the Hon ble Supreme Court. However, we find that as against the said decisions the adjudicating authority has relied upon Calcutta High Court s decision in the appellants own case as confirmed by the Hon ble Supreme Court inasmuch as the appeal filed by M/s. Bata India against the said decision of the Hon ble High Court, as reported in 1993 (68) E.L.T. 756 (Cal.) was dismissed. So, first of all we would discuss the applicability of the said decision of the Hon ble Calcutta High Court. 8. The Hon ble Calcutta High Court, on an appeal filed by Union of India against the order of the lower authorities held Herefit sheets, Thermo plastic sheets and Celluloid sheets made from cotton and silk fabrics for use in footwear, as excisable goods. It is seen on a reading of the said decision of the Calcutta High Court that though the observations as contained in the said judgment were against M/s. Bata India Ltd., the operative portion of the said decision rejected the appeal filed by the Revenue. Vide para 32 of the said judgment, the Hon ble H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d we find that the Commis sioner has relied upon the fact that such rubberised fabrics are being sent by the appellant to their job workers for further stitching, which fact proves the marketability of the goods in question. The appellants have explained that the shelf life of the so called rubberised fabric varies from 7 days to 4 weeks depending upon the weather conditions and keeping this view in mind they always chose their job workers which are situated nearby. For an item to be vandiable, it is necessary that the same should have sufficiently long shelf life so as to enable the same to come to the market for being bought and sold in the ordinary course of their business. It is well settled law that the onus to prove the marketability is upon the Revenue, who have failed to discharge the same in the instant case. 10. It is also seen that the appellants have strongly contended that the fabric in question after the mixture is spread on the same is not vulcanised, whereas the Commissioner has observed that the rubber mixture, before being spread on the fabric was vulcanised. Apart from the fact that this allegation was never made in the show cause notice so as to give an opport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 3. By observing so the Hon ble High Court has held that the unvulcanised friction cloth used in manufacture of belts not capable of being generally marketed cannot be held to be goods. 14. The Hon ble Bombay High Court in the case of Brammer V. Link Belting India Ltd. and Another - 1987 (31) E.L.T. 671 (Bom.) has held that application of rubber compound to cotton fabrics is only an intermediate stage and does not amount to manufacture of cotton fabrics rubberised and as such no duty can be levied on the same. The Hon ble High Court has rejected the enquiries made by the Inspector of Central Excise relating to marketability of vulcanised rubber which reveal that the product could be marketed, as heresay evidence and without having any basis. 15. The Tribunal in the case of CCE v. Bharat Electronics and Plastics - 1993 (67) E.L.T. 140 (CEGAT) has held that rubber quoted fabrics emerging as an intermediate product in the course of manufacture of friction tapes obtained by quoting of grey cotton fabrics with rubber, but without any vulcanization process, are not liable to duty being not marketable. 16. To the same effect is the decision of Eastern Bench of the Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 241 (S.C.), it has been held that no product is goods unless shown to be marketable by the department. Mere specification in the dictionary or Central Excise Tariff and draw back rate schedule is of no consequence. The Hon ble Supreme Court in the case of Nirlon Synthetic Fabrics Ltd. - 1996 (86) E.L.T. 457 (S.C.) has again stressed the criteria of marketability of a product for its dutiability and as again held that the onus to prove marketability is upon the Revenue, which is required to be discharged by production of evidence. 21. We also take note of the Hon ble Supreme Court s decision in the case of Hindustan Petroleum Corpn. Ltd. v. Union of India - 1999 (112) E.L.T. 8 (S.C.), laying down that the burden is on the department to prove marketability of the product which they want to charge to duty. Duty not leviable if department fails to prove so. Similarly in the case of Union of India v. Garware Nylons - 1996 (87) E.L.T. 12 (S.C.), the Hon ble Apex Court has again held that burden of proof is on the taxing authorities to show that a particular item is taxable in the manner claimed by them. Mere assertion is of no avail. Taxing authorities to lay evidence especially when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e observations of the Commissioner that he has seen the product and his findings based upon the same are not relevant, especially when the appellants have produced on record the technical evidence and the expert opinions to show that the goods are not marketable on account of their instability. The evidences produced by the appellant by the experts relating to marketability of the product have not been rebutted by the Revenue. As such we hold that the product in question has not been proved to be marketable and hence the same is not excisable. 22. Before we part we would like to mention that most of the judgments holding rubberised textile fabric or friction cloth as non-excisable relied upon the decision of the Punjab and Haryana High Court in the case of Punjab Rubber Allied Indus. - 1983 (12) E.L.T. 54 (P H). On an appeal filed by Union of India and Others against the decision of the Punjab and Haryana High Court, the same was allowed by the Hon ble Supreme Court as reported in 1999 (105) E.L.T. 3 (S.C.) = 1997 (19) RLT 359 (SC). As such a doubt about the applicability of the earlier decisions of the Tribunal or of the various High Courts as regards the excisability of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing repeated. 25. The issue for consideration in this appeal filed by M/s. Bata India Ltd. (hereinafter referred to as M/s. Bata ), is the dutiability and marketability of the product referred to in the show cause notice dated 29-3-1995, as double textured fabric (para 17) and in the show cause notice dated 30-3-1995 as rubberised fabric (internal page 4). For obtaining the said product, a thin layer of rubber was sandwiched between two sheets of cotton fabrics. Shri Manhar Jagota, Manager - Supply and Transport, looking after all matters relating to Central Excise in the appellants company, in his statement dated 16-6-1994, recorded under Section 14 of the Central Excise Act, referred to the product in question as combined/laminated fabric. He explained the process of manufacture as under - The manufacturing process of combined/laminated fabric involves the preparation of a rubber compound by mixing inter alia rubber with various chemicals and solvent oils in a specific ratio in the power operated mixers and then this rubber compound known as friction mixture is applied through a three bowl calendering machine on two textile fabrics in running length so as to obtain laminat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided exemp tion from duty. It is clear from this exemption notification that the rubberised textile fabrics are used for the manufacture of footwear. Earlier there was no exemption for such rubberised textile fabrics when they were used in the factory of their production for the manufacture of exempted footwear. By this exemption Notification dated 7-12-1994, exemption was so provided. This legal provision makes it clear that rubberised textile fabrics for use in the manufacture of footwear is a known and identifiable commodity. 30. It is thus clear from these provisions of the law that the rubberised textile fabrics were used for the manufacture of footwear and no exemption was available to such fabrics earlier than 7-12-1994 when they were used for the manufacture of footwear which were exempted from the whole of the duty of excise leviable thereon or were chargeable to nil rate of excise duty. 31. The main argument of M/s. Bata in contesting the levy and the proposal to impose penalty was that the goods in question held to be classifiable as rubberised waterproof fabric, were not a marketable commodity. 32. The marketability does not depend upon the shelf life of a gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an 50% by weight of textile material. In this view of the matter, such friction cloth would fall under Heading 59.05 except for such cloth in which the sheet material weighs more than 15 grams per square metre but contains less than 50% by weight of textile material. This particular category would fall under Chapter 40.05 which covers plates, sheets, or strips of compounded unvulcanised rubber . Thus view finds support through Explanatory Note 3 under Heading 40.05 of the H.S.N. Accordingly, Friction Cloth weighing more than 1500 grams per square metre and containing more than 50% by weight of unvulcanised rubber compound would fall under Heading No. 40.05 and all other friction cloth would fall under Chapter No. 59.05 of the tariff. The classification of the product may be decided keeping in view of the aforesaid position. 2. By Notification No. 5/87-C.E., dated 15-1-1987 rubberised textile fabrics falling under Heading 59.05 which do not weigh more than 15 grams per square metre and in which rubber predominates by weight have been exempted from duty. While applying this exemption care would have to be taken to ensure that only such Friction Cloth as is classifiable under Headi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Central Excise Tariff relating to textile fabrics is a multi stage tariff. Duties are levied at different stages. Under Chapter 59 of the Tariff, impregnated, coated, covered or laminated textile fabrics were classified. This duty was separate and in addition to the duty leviable on the base fabrics which were subjected to the process of impregnation, coating, cover ing and lamination. Under Heading No. 59.05, rubberised textile fabrics, other than tyre cord fabric of high tenacity yarn of polyamides, were covered. Under Chapter Note 3 of Chapter 59, the expression Rubberised Textile Fabrics was defined as under - 3. For the purposes of heading No. 59.05, the expression rubberised textile fabrics means - (a) Textile fabrics impregnated, coated, covered or laminated with rubber, - (i) Weighing not more than 1, 500 g/m2; or (ii) Weighing more than 1,500 g/m2 and containing more than 50 per cent by weight of textile material; (b) Fabrics made from yarn, strip or the like, impregnated, coated, covered or sheathed with rubber, of Heading No. 56.04; (c) Fabrics composed or parallel textile yarns agglomerated with rubber, irrespective of their weight per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 19 and 22 of the erstwhile Central Excise Tariff. The High Court framed the question for their consideration in para 5 as Whether the respondent is the producer or manufacturer of the said goods and as such liable to pay excise duty thereon or those products are only intermediary processes, used to complete the footwear. In para 15, the High Court observed that the niceties of the technicalities for the manufac ture of the sheets were not the decisive test and that there was no denying the fact that coating of cotton fabrics, silk fabrics as well as artificial silk fabrics turned the fabrics into a special kind of sheets through stages of processing with rubber and other chemicals being impregnated into the fabrics. In para 27, the High Court made a reference to the other manufac turers of shoes specially the small manufacturers who could not afford to have a large plant exclusively engaged in the production of such sheets and due to the process involved, they were to buy such sheets from the producers of such sheet. In Para 28, the Hon ble High Court had discussed as under - 28. Again, no case has been made out by the respondent that they are holding monopoly in the manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.L.P. (C) No. 6164 of 1993 filed by M/s. Bata India Ltd. against the judgment and order dated 12th January, 1993, passed by a Division Bench of the Calcutta High Court in Appeal No. 443 of 1978 (Union of India v. Bata India Ltd.) By its impugned order, the Calcutta High Court held that the three types of sheets, namely, herefit sheets, thermoplastic sheets and celluloid sheets from cotton and silk fabrics manufactured by the petitioner are excisable goods even though they are used as articles at the intermediary stage in the process of manufacture of final and different product i.e. footwear. There is no absolute bar of Civil Court s jurisdiction in excise cases and goods though specified in Central Excise Tariff are excisable unless shown to be non-marketable. They may be raw materials for manufacture of further goods but they by themselves constitute goods hence are liable to duty. REPRESENTED BY : Mr. Ashok Desai, Sr. Advocate, for M/s. Khaitan Co., for the Petitioner. The Supreme Court had noted the arguments that the discussion in the order of the Calcutta High Court was against M/s. Bata. Thus, even when the Hon ble Supreme Court had not gone into the merits of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nical), the matter is placed before the Hon ble President for reference to the Third Member on the point whether the appeal filed by M/s. Bata (India) Ltd. is to be allowed as proposed by the Member (Judicial), or the appeal filed by M/s. Bata (India) Ltd. is to be rejected as proposed by Member (Technical). Sd/- Sd/- (Archana Wadhwa) (Lajja Ram) Member (Judicial) Member (Technical) 43. [Order per : V.K. Agrawal, Member (T)]. - In this referral order, the issue involved is whether the double textured rubberized fabric/unvulcanised sandwiched fabric manufactured by M/s. Bata India Ltd., is marketable or not so as to attract Central Excise duty. 44. Shri S.K. Bagaria, learned Advocate, reiterated the arguments which were made by him at the time of hearing of the matter by the referral Bench. The learned Advocate highlighted that the issue is fully and directly covered in appellants favour by direct judgment of the Hon ble Calcutta and Delhi High Courts in respect of identical products in their own case; that the Calcutta High Court in its judgment dated 23-7-1979 held that the goods were simply friction cloth unvulcanised, and as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legal provisions as has been assumed by the learned Member (Technical); that the decision in the case of Falcon Tyres v. CCE - 1996 (88) E.L.T. 450 and MRF Ltd. v. CCE - 1999 (105) E.L.T. 619, are not relevant as in these decisions the issue only related to classification of rubberized or calendered fabrics; that none of the disputes involved in the present matter were decided in these cases. He also mentioned that under Rule 57F, the partially processed inputs can vulcanization (sic) in the manufacture of rubber textile fabrics is evident in following decisions also :- (1) CCE v. Bharat Electronics Plastics, 1993 (67) E.L.T. 140 (Tri.). (2) Brammer V. Link Belting India Ltd. v. ACCE, 1987 (31) E.L.T. 671. (3) CCE v. K.K. Rubber Pvt. Ltd., 2000 (120) E.L.T. 28 (S.C.) = 2000 (39) RLT 895. 45. Learned Advocate further submitted that the appellants have produced sufficient evidence to establish that the impugned in-process material is not at all marketable whereas no evidence whatsoever has been produced by the Department to prove the marketability of the impugned product; that it follows from the decision of the Supreme Court in the case of K.K. Rubber Co. Pvt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the view that since the operative part of decision was in their favour, it was not necessary to decide the points raised in the SLP; that the SLP was dismissed for these reasons by the Supreme Court; that due to this peculiar facts and circumstances, the SLP was dismissed and as Supreme Court neither considered nor decided the marketability aspect, the said decision of the Calcutta High Court cannot be relied upon. He also contended that larger period of limitation of five years is not applicable in the present matter, as the entire facts were known to the Department and particularly, in view of the decisions of the Calcutta High Court, that non-filing of Classification List and non-maintenance of statu tory Central Excise records were due to their bona fide belief and impression that the impugned materials were not liable to excise duty, which was based on the findings of the Calcutta and Delhi High Courts; that for the same reason, penalty of Rs. one crore is not imposable on the appellants. 47. Countering the arguments, Shri D.K. Bhowmik, learned JDR reit erated the arguments submitted earlier before the referral Bench and emphasized that even by appellants own admission the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is required to be marketable i.e. it should be capable of being brought to the market or being bought or sold. It is the case of the appellants that the fabrics so obtained by them does not have much shelf life as it vary from 10 days to 4 weeks depending upon climatic conditions. It was held by the Supreme Court in Bhor Industries (supra) that for articles to be goods, these must be known in the market as such or these must be capable of being sold in the market as goods. However, Supreme Court further, observed in the same case that actual sale in the market is not necessary, hence used in the captive consumption is not determinative but the articles must be capable of being sold in the market or known in the market as goods. Same principle was reiterated in Hindustan Polymer v. CCE - 1989 (43) E.L.T. 165, wherein it was held that for an article to be goods, this must be known in the market as such, and this must be capable of being sold in the market as such. I observe that it is not disputed fact the impugned fabric is sent by the appellants to job workers for stitching purposes and is received back from them. It has been emphasized by the appellants that they ensure that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial silk fabrics were coated with a suitable rubber compound dissolved in Petrol. Thereafter, the said fabrics were cut into small pieces, which was then reactivated with catalyst solution. Then these pieces were put on to the shoes and the same were then vulcanized. The pleas taken by the appellants in that matter were that the processing done by them did not make or trans form fabrics into a new substance and the said processed fabrics were not known to the consumer or commercial community or in the market in general; the fabrics after processing were merely unfinished intermediary components which were not marketable and could not be bought and sold. It was also urged by them that these must be used immediately in the stage of manufacture of footwear else, processed fabrics would loose their utility and became totally useless. The Calcutta High Court held as under :- .........there is no denying the fact that coating of cotton fabrics, silk fabrics as well as artificial silk fabrics turns the fabrics into a special kind of sheets through stages of processing with rubber and other chemicals being impregnated into the fabrics. The crux of the matter is whether those sheets are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity of rubberized cotton fabrics/friction cloth. The learned Advocate for the appellants has also made submissions about the non-applicability of extended period of limitation and on the question of quantum of penalty. I find that the difference between the two learned Members of the referral Bench was on the question of marketability of the product. No views were expressed by the learned Member (Judicial) on these aspects. Therefore, I refrain from considering these two aspects. I hold that the product in question is marketable as held by the learned Member (Technical). Sd/-(V.K. Agrawal)Member (Technical) FINAL ORDER 51. In view of the Majority Order, the appeal filed by M/s. Bata India Ltd. is rejected on merits by holding that double textured rubberised fabric/unvulcanised sandwiched fabric is an excisable product. However, as there is no Majority Order available on the point of limitation and on the applicability of notification and on the quantum of penalty, the appeal is posted for rehearing on the said issues. Sd/- Sd/-(Archana Wadhwa)Member (Judicial)Dated : 21-12-2001 (V.K. Agrawal) Member (Technical ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
