TMI Blog2015 (9) TMI 1322X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the manufacture of such goods. Accordingly, the appellant had not availed the credit on their main input i.e. raw rubber and fillers. However, they had availed on a minor quantity of consumables. Commissioner (Appeals) has thereafter observed that this is unintentional wrong availment of Cenvat credit and same cannot be considered as wrong classification of goods and has agreed with the contention of the respondent. - goods classified by the respondent in 4005.10 would be classifiable under 4005.90. We also note that the respondent has declared in various documents as also, in the form of letter that he is not availing the credit of any of the inputs used in the manufacture of such item which have been found to be factually incorrect on verification. In view of this position, there has been clear cut mis-statement of facts and extended period of limitation would be invocable as far as the first product is concerned. Penalty under section 11AC/Rule 25 will also be imposable. - Decided in favor of revenue. As regards, second item there is no dispute about the fact that for the manufacture of this product the compounded rubber in the primary form i.e. in the form of sheet is u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 4006.90. 2.4 In addition to the above issues of classification, the show-cause notice has invoked the extended period of limitation. 3. Ld. AR on behalf of the revenue submitted that heading 4005.10 covers only those plates, sheets or strips in relation to the manufacture of which no Cenvat credit of duty paid on the inputs used has been availed. He further submitted that there is no dispute that respondents have availed Cenvat credit on certain inputs used in the manufacture of such goods. The Commissioner (Appeals) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the officers visited the factory along with the chemical examiner that the process was understood and the correct classification could be arrived at. In view of this position, the extended period of limitation is invocable for the said item also. 4. Ld. counsel for the respondent showed us the sample of the two products as also sample of the gaskets manufactured from the second product. Ld. counsel submitted that the goods got tested, vide report dated 20.01.03 the chemical examiner has stated that the material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded 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 is classifiable under 4005.10 or 4005.90. It would be seen from the description of 4005.10 that the primary requirement to classify under the said sub-heading is that in relation to the manufacture, of which no Cenvat credit of duty paid on the inputs used has been availed. In the present case, there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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, the manufacturer of the dutiable and exempted final products. The decision taken by the learned Commissioner (Appeals) has done violence to this scheme of law. 7. We are entirely in agreement with the above view and in our considered view; goods classified by the respondent in 4005.10 would be classif ..... X X X X Extracts X X X X X X X X Extracts X X X X
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