TMI Blog2003 (7) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... ering; that under a letter dated 22-9-80 the Appellants were directed for the first time to apply for Central Excise Licence for the manufacture of cord warpsheet, that the Appellants under their letter dated 27-9-1980 had submitted their application for the licence under protest; that they had filed a Writ Petition No. 1353 of 1980 in the High Court of Delhi challenging levy of Additional Excise Duty; that similar Writ Petitions were also filed by other tyre companies; that the Department in reply filed in the High Court, had mentioned the manufacturing process which goes to show that the Department was fully aware of the processes undertaken by the Appellants; that the Appellants in their Re-joinder filed in the High Court had mentioned that the impugned product is an in process material and is not a marketable commodity and is not bought and sold in the market as such and that no duty of excise is payable in respect of rubber products. He, further, mentioned that a writ petition had also been filed by M/s. MRF Ltd. on the same issue in Bombay High Court which was allowed by the High Court as reported in 1985 (22) E.L.T. 5 (Bom); that the said judgment was accepted by the Board a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned that the process employed by all the tyre companies to manufacture tyre cord warp is same; that only compound may be different. He further contended that in the decisions referred to above the view of the Department itself was that the product in question would fall under Heading 59.05 of the Tariff. Reliance has also been placed on the following decisions : (i) Apollo Tyres Ltd. v. CCE Cus, Vadodara - 1999 (108) E.L.T. 247(T) (ii) Birla Tyres v. CCE Cus, Bhubaneswar-1 - 2001 (135) E.L.T. 1313 (T) (iii) CEAT Ltd. v. CCE Cus, Aurangabad - 1999 (111) E.L.T. 383 (T) (iv) MRF Ltd. v. CCE, Goa Chennai - 1999 (105) E.L.T. 619 (T) 4.Finally, the learned Senior Counsel submitted that the Appellants are not manufacturer of textile as their final products are tyres and tubes; that if the contention of the Revenue to classify the impugned product under Heading No. 59.02 is upheld, it would go to show that there is no manufacture as the input also falls under the same Heading and no different commercial commodity emerges; that in case a different commercial commodity emerges then it ceases to be classifiable under Heading 59.02 and hence n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, polyesters or viscose rayon. 59.06 Rubberized textile fabrics other than those of Heading 59.02." 8.The facts which are not in dispute are that the grey tyre cord fabrics is dipped in a Resorcinol solution and thereafter the rubber compound is applied and the fabric is calendered. The Appellants thus get rubberized tyre cord fabric after the processing undertaken by them. Heading 59.02 specifically covers tyre cord fabrics of high tenacity yarn of nylon or other polyamides polyester or viscose rayon. According to the Explanatory Notes of HSN, "this heading covers tyre cord fabric, whether or not dipped or impregnated with rubber or plastic. This fabric is used in the manufacture of tyres and consists of a warp of parallel filament yarn held in place, at specific distance by waft yarn." The Explanatory Notes below Heading 59.06 clearly mentions that Heading 59.06 covers "textile fabrics impregnated, coated, covered or laminated with rubber, including dipped fabrics (other than those of Heading 59.02)". The Explanatory Notes further mention that these rubberised fabrics are used principally for the manufacture of water proof apron specifically ready-made garme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for classification under that Heading. The Supreme Court decisions cited above make it clear that the Departmental authorities are bound by such clarification and are to follow the decisions on classification by the higher forum. Though the Commissioner in the impugned order has not dealt with the implication of the precedent decision and clarification of the Board, we find that the matter is settled clearly enough about the classification of the goods in dispute which have to be followed by the Departmental authorities." The Appellate Tribunal therefore, allowed the Appeal filed by M/s. Apollo Tyres by classifying the product under Heading 59.05 without examining as to whether the tyre cord fabric will fall under Heading 59.02. Similarly, in other cases also the Appellants have been contesting classification of the product under Heading 59.06 on the basis of Tribunal's earlier decision in Vikrant Tyres etc. without discussing the classification of the product under Heading 59.02. However in view of the specific Tariff Heading for tyre cord fabrics and in view of the Explanatory Notes of HSN, the product is appropriately classifiable under Heading 59.02. We also observe that Boar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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