TMI Blog1983 (2) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... ed of as such. 2. This appeal is directed against a composite order passed by the Appellate Collector of Customs and Central Excise, Madras whereby he disposed of appeals filed by the present appellant along with two appeals of other parties because there were identical questions for determination. This was by his order dated 11-2-1980, which had, in turn, confirmed the order passed by the Assistant Collector of Central Excise, Kottayam on 5-7-1978. 3. The facts giving rise to the controversy are to the effect that the appellants, claimed to be a partnership concern, is manufacturing certain products relating to tyre industry and it is alleged that one of the products which is finally turned out for clearance from the factory is ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ushion Compound but in reality it was a substance different from the same and was only in the nature of a semi-finished product, to be called only as cushion , and that it was not being sent out or traded in the market as cushion compound but only used inside the factory for the preparation of another finished product on which full excise duty as levied was being paid under Tariff Entry 16A(2) of the Central Excise Tariff and that no separate duty was payable on this article known as cushion . The notice was also resisted on the ground that it was barred by time as rule 9(2) could be attracted only in case there was clandestine removal as contemplated by rule 9(1) of the Central Excise Rules and that since the appellants had been showing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g or repairing of tyres, was leviable to excise duty, did not find favour with the Assistant Collector and holding that such a user of this article known as cushion or cushion compound which, according to him, were identical terms, was very much in vogue and that till the issuance of Notification No. 208/72-C.E., which exempted such goods if used inside the factory of manufacture for further production of rubber products, central excise duty would be leviable as contemplated by Tariff Entry No. 16A(2). 6. The Appellate Collector upheld this view by his order dated 11-2-1980 in the appellants case as well as two other orders, in the case of two other parties who were similarly affected by separate orders passed by the Assistant Coll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 2(f) of the Central Excise Act, 1944 but was only being employed as an integrated process in the preparation of another article and that resultant product was being cleared after payment of duty and that in case excise duty would be held leviable on this first product, namely, cushion also, it would inflict double burden on the appellants leading to unjust hardship. It is further contended that, in fact, the Excise Authorities realised this position and it was for this reason that they did not realise any duty prior to 14-10-1972 although they were regularly approving the classification lists and that it was only on issuance of Notification No. 208/72 dated 14-10-1972 that a doubt arose in the minds of the concerned authorities and impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Consultant, however, elaborated only the first two arguments emphasising that this product which has been characterised as cushion compound was, in fact, only cushion and not marketed out but used inside the factory for the manufacture of a finished product known as Tread Rubber with Cushion Backing and that no duty could have been levied on this intermediary product. He also raised the question of limitation under rule 10 as also the inapplicability of rule 9(2) of the Central Excise Rules with reference to which the Notice for Demand seems to have been made. 11. The learned Departmental Representative controverted these arguments by firstly referring to the judgment of Kerala High Court which was the writ petition filed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a factory though used in another process in the same factory for the manufacture of another product have become excisable by introducing a deeming provision that such user would be tantamount to removal from the factory or the premises. 12. We thus find that apart from the fact that the issue stands concluded by the judgment of Kerala High Court in the writ petition filed by this very appellant being Writ Petition No. 1461/72 decided on 16-1-1974 wherein it was held that the cushion compound said to be captively consumed for cushion backing of tread rubber was a product directly falling within the description given against Tariff Entry 16A(2) and liable to excise duty. Otherwise also, in view of the position as now introduced retros ..... X X X X Extracts X X X X X X X X Extracts X X X X
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