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Commissioner of Central Excise, Mumbai IV Versus Brahans Rubber (P.) Ltd.,

2015 (9) TMI 1322 - CESTAT MUMBAI

Classification of goods - first item is processed rubber compound in sheet form - second item is processed rubber compound which is in the cord form - whether the item is classifiable under 4005.10 or 4005.90 - Held that:- 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 dispute tha .....

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to avail credit of the duty paid on inputs used 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 res .....

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on 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 used as an input and the said sheet is further extruded through a die of dimension of 10×10 sq.mm. to get compounded rubber of the said dimension in running length. This product is outcome of second time extrusion process and extrusion process is .....

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t, and only the demand which is within the normal period of limitation is upheld - Decided partly in favour of Revenue. - APPEAL NO. E/886/2005-MUM. - Final Order No. A/2813/2015-WZB/EB - Dated:- 19-8-2015 - P.K. JAIN AND S.S. GARG, JJ. For The Appellant : Sanjay Hasija, Supdt.(AR) For The Respondent : R.V. Shetty, Advocate ORDER P.K. Jain, Technical Member - This is an appeal filed by the revenue against the order dated 17.01.2005 passed by the Commissioner (Appeals). 2. The brief facts of the .....

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90. Revenue's contention is that only such plates, sheets or strips are classifiable under sub-heading 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 .....

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s 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 .....

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t as the said sub-heading does not make any distinction like major and minor items and the description itself says no Cenvat credit of duty paid on inputs has been availed. He further submitted that once Modvat/Cenvat credit has been taken by the respondent on any of the inputs howsoever minor, the goods cannot be classifiable under said heading and would fall under residuary sub-heading 4005.90. He submitted that in view of this position, the classification by the respondent is incorrect. He fu .....

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submitted that it could be seen that the compound processed rubber has gone through the extrusion process second time and the processed compounded rubbed so obtained cannot be considered in primary form, that chapter note 9 of chapter 40 clarifies that the expression 'plates', 'sheets' and 'strips' apply only to plates, sheets and strips and to blocks of regular geometric shape, uncut or simply cut to rectangular (including square) shape, whether or not having the charac .....

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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 proc .....

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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 is composed of natural rubber, carbon block, fillers, additives including sulphur. It is .....

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signed by the Joint Director, while the second report dated 25.05.2003 is signed by chemical examiner Grade I, who is junior official. In case the department was not satisfied with the earlier report, it should have be referred the matter to the Chief Chemist. Ld. counsel further submitted that in the report dated 25.05.2003, the chemical examiner has expressed his opinion on the classification of the goods which is outside the purview of the chemical examiner. The chemical examiner's job is .....

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m and the first item except that the first item is in the form of rectangular lump, the second is in continuous length having a width of 10mm. He further submitted that their unit was functioning for more than 10 years and the unit was audited number of times earlier also, they were filing 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 lim .....

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le 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 4005.9 .....

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). We find the Commissioner (Appeals) has taken a view that the respondent had classified the goods under 4005.10 and cleared the goods indicating this classification in their clearance document and their monthly return. This clearly indicates the intention of the respondent not to avail credit of the duty paid on inputs used 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 mino .....

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there is nothing like major or minor item in the description. Once a manufacturer has taken the credit of any of the inputs, the goods manufactured out of such inputs goes out of such sub-heading viz. 4005.10, and would be required to be classified under 4005.90 which do not stipulate any such condition. This Tribunal in Hi-Mile Rubber (P.) Ltd.'s case (supra) has observed as under:- "7. On considering the submissions of the learned SDR, we have found a good case for the appellant Clas .....

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uct 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 f .....

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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 classifiable under 4005.90. We also note that the respondent has declared in various documents as also, in the form of letter that he .....

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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 used as an input and the said sheet is further extruded through a die of dimension of 10×10 sq.mm. to get compounded rubber of the said dimension in running length. This product is outcome of second time extrusion process and extrusion process is carried out on the compounded rubber. This is a case where the processed compounded rubber in the primary form .....

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