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TMI Blog2015 (9) TMI 1322X X X X Extracts X X X X X X X X Extracts X X X X ..... eading 4005.10 in relation to the manufacture of which no credit of duty paid on the inputs used has been availed under Rule 57A of Central Excise Act, 1944 and/or no Cenvat credit of duty paid on the inputs used has been availed under CENVAT Credit Rules, 2001. In the present case, credit of the duty paid on inputs under Rule 57A of the Central Excise Act, 1944 and/or Cenvat credit as per CENVAT Credit Rules, 2001 has been availed, the goods are therefore not classifiable under CSH 4005.10. The same were therefore required to be classified under CSH 4005.90. 2.2 The second item is processed rubber compound which is in the cord form. Respondent have classified this item under CSH 4005.10 while the revenue wants to classify the same under CSH 4006.90. The said item is manufactured specially for supply to manufacturers of gaskets used in the pressure cookers. 2.3 Revenue's contention is that heading 4005 covers compounded rubber, unvulcanised in primary form/plates sheets or strips other than the form in articles of unvulcanised rubber described in heading 40.06. Further, in view of Chapter note 9 of chapter 40, these goods would appropriately be classifiable under heading 4006 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd has been further worked inasmuch it has been again put to extrusion process from where 10mm width processed rubber compound has been extracted. The extruded product is suitable for making gaskets for pressure cooker. In view of this factual position, the goods are correctly classifiable under 4006.90. Ld. AR submitted that the observation of the Commissioner (Appeals) about the cord form is incorrect. He further submitted that the sample of the goods are produced by the counsel for the respondent and from that it is amply clear that the processed rubber compound has been further worked. 3.2 As far as issue relating to extended period of limitation is concerned, Id. AR submitted that the appellant vide letter submitted that they are not availing the credit of inputs in the manufacture of processed compound and it was only during the visit of the factory that it was discovered that they are availing credit of duty on certain inputs. This clear cut misstatement of facts is with the sole intention to evading duty therefore, the extended period of limitation is correctly invoked. Ld. AR further submitted that in respect of the second item, it was only when the goods were tested and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... classification declaration and the revenue had not objected to the classification and it is their bona fide belief that the items were correctly classifiable and under the circumstances, extended period of limitation is not invocable. He submitted that in view of the said position, appeal filed by the revenue may be dismissed. 5. We have considered the submissions. In order to decide the classification of the first product, we reproduce the relevant heading: 40.05 Compounded rubber, unvulcanised, in primary forms or in plates, sheets or strip, other than the forms and articles of unvulcanised rubber described in heading no. 40.06 4005.10 Plates, sheets or strip, whether or not combined with any textile material, in relation to the manufacture of which no CENVAT credit of duty paid on the inputs used has been availed. Nil 4005.20 Used within the factory of production for the manufacture of excisable goods falling within this Schedule Nil 4005.90 Other 16% 6. We note that as far as the first item is concerned, there is no dispute between revenue and the respondent that the item is classifiable under 40.05. The dispute is only limited to whether the item i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n inputs used in the manufacture of the said goods. It is not in dispute that the respondent did not manufacture any intermediate product classifiable under SH 4005.20 during the material period. In this scenario, the products cleared by them after availing MODVAT credit on inputs was rightly classifiable under the residuary sub-heading 4005.90, residuary to SH 4005.10. This classification would necessarily result in levy of duty on the goods at the rate applicable to SH 4005.90 and this was done by the original authority, with which we are in full agreement. The decision taken by the learned Commissioner (Appeals), which is focused on Rule 57CC without regard to the correct classifiability of the goods, is not sustainable in law. Before application of Rule 57CC, the manufacturer should classify his final products, correctly and ascertain whether some of such products are dutiable and other exempted. If it is found that, upon correct classification of the final products, some are dutiable and others exempted, the manufacturer can start thinking of the procedure under Rule 57CC if he does not opt to maintain separate accounts in respect of common inputs used in, or in relation to, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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