TMI Blog2006 (4) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... s against another similar order passed the same Commissioner (Appeals) in respect of the same factory for the period May, 1997 to February, 1998. The remaining appeal E/1395/1998 is against an order passed by the Commissioner of Central Excise (Adjudication), Chennai setting aside a demand of duty on an intermediate product of the assessee's factory at Arakkonam for the period 5/1996 to 4/1997. While the lower appellate authority set aside demands of duty on Beads, Dip solution and Dipped Tyre Cord Warp Sheets (all intermediates emerging in the process of manufacture of "ADV tyre" i.e. tyres meant for animal-drawn vehicles) after holding that these items were not marketable and hence not excisable, the adjudicating authority below set aside a demand of additional excise duty (AED) on Rubberised Tyre Cord Warp Sheets (another intermediate as above) after holding that this item was classifiable under Heading 59.06 in the Schedule to the Central Excise Tariff Act. AED was not leviable on goods falling under this Heading. 2. The respondents are engaged in the manufacture of tyres, tubes and flaps. ADV tyres were exempt from payment of duty during the period of dispute (Mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was actually being transferred between different units of the assessee, situated in Goa, Chennai, Andhra Pradesh and Kerala, and also that DTCWS w actually being purchased by the assessee from another party M/s. SRF Ltd. 3. The department had issued two other show-cause notices to the respondents demanding BED and AED on Beads, Dip solution and RTCWS for the period May, 1997 to February, 1998. These notices were adjudicated upon by the original authority which passed order No. 12/98 confirming the demand of duty following its own earlier order No. 65/97 ibid. An appeal preferred by the assessee against this order No. 12/98 was disposed of by the Commissioner (Appeals) as per Order-in-Appeal No. 153/98, wherein the above demand and duty was vacated by the appellate authority following its earlier Order-in-Appeal Nos. 49-51/98. [Again the dutiability of RTCWS did not arise for consideration by the appellate authority.] The present appeal No. E/3577/98 filed by the Revenue is against this Order-in-Appeal No. 153/98. This appeal is on the same grounds as those raised in Appeal Nos. E/3170-3177/98 as regards Beads and Dip solution. In the grounds of this appeal, there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ric in Resorcinol solution, applying rubber compound thereafter and finally calendaring the fabric, was held to be covered specifically under Heading 59.02 and not under Heading 59.06. Ld. Counsel also referred to the decision of this Bench in Madura Coats Ltd. v. CCE, Madurai [2000 (125) E.L.T. 726 (T)] wherein it was found that the department had accepted the assessee's classification of DTCWS under heading 59.02 for a certain period. On the other hand, Shri Ignatius. Counsel for the respondents, relied on the Bombay High Court's decision in the case of CEAT Tyres of India Ltd. v. UOI Others [ 1987(30) E.L.T. 857 (Bom.)] holding that Dip solution, not being stable and marketable, was not liable to levy of duty of excise. Counsel pointed out that this decision of a learned Single Judge of the High Court was affirmed by a Division Bench of the Court in UOI v. CEAT Tyre of India Ltd. [1989 (42) E.L.T. 565 (Bom.) = 1989 (43) E.L.T. 267 (Bom.)]. Ld. Counsel also relied on Order-in-Original No. 5/97, dated 5-8-97 of the Commissioner of Central Excise, Goa, wherein it had been found that Dip solution was not marketable for want of shelf-life. As regards Beads, Id. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder-in-original itself is in consonance with three decisions of the tribunal as well as our own decisions contained above, there fore the prayer of the learned Senior Advocate for appellants merits consideration and the appeals are dismissed as not pressed. However, learned Sr. Advocate submitted that the said prayer is with liberty to file cross- objections in case at future date, the Revenue agitates this issue in any manner. He consider this prayer to be fair and accede to it." It appears from the records and submissions that, against the above dismissal of the assessee's appeals E/62 63/98. M/s. MRF Ltd. filed Civil Appeal Nos. 1494 and 1495/99 [2005 (180) E.L.T. 310 (S.C.)] before the Supreme Court and that these Civil appeals were dismissed by the Apex Court as per Order dated 27-9- 01, which reads as under: - "Pursuant to the show cause notice which was issued the Commissioner by order No. 5 of 1997 dated 25th September, 1997 dropped the proceedings against the respondent and held that the item in question was classifiable under Heading 59.06. The appeal filed against the same by the respondent was withdrawn by it. This being so, there can be no occasi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k we can follow the ratio of the decision contained in our Final Order dated 20-7-98. As regards classification and dutiability of Dipped Tyre Cord Warp Sheets (DTCWS). this item has been held to be classifiable under Heading 59.06 and no BED/AED is leviable on it vide Final Order dated 20-7-98 ibid . However, as regards Rubberised Tyre Cord Warp Sheets, even Final Order dated 20-7-98 cannot help the assessee inasmuch as the demand of duty on Rubberised Tyre Cord Warp Sheets confirmed in Order-in- Original No. 65/97 of the Assistant Commissioner was not challenged by the assessee. As regards this item, Order-in-Original No. 65/97 of the original authority has become final and binding and consequently, the assessee is liable to pay BED/AED on Rubberised Tyre Cord Warp Sheets cleared for captive consumption during the period November, 1996 to April, 1997. As regards Beads, the question whether this intermediate product of the respondents is excisable is no longer res Integra inasmuch as this Tribunal has held, in their own case, that this item is not marketable and hence not liable to duty of excise on account of its very short shelf-life vide 2000 (115) E.L.T. 85. In respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit of appropriate duty paid on eligible inputs used in the said intermediate product for the relevant period. (Order pronounced in open Court………………) Sd /- (P.C. Chacko), Member (Judicial) t Dated 28-10-2004 10 . [Per : Jeet Ram Kait, Member (T) (agreeing with Member (J)]. - While agreeing with the view taken by my learned brother Shri P.C. Chacko, Member U) that Appeal Nos. E/3170 to 3177/98 filed by the Revenue should be rejected, I would like to add that so far as the item Dip Solution is concerned, the plea of the learned Sr. Counsel for the Revenue, as recorded on page 9 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 97. The total AED involved in this appeal is Rs. 3,82,19,754/- (Rupees Three Crores, eighty-two lakhs, nine teen thousand, seven hundred and fifty-four). The allegation in the show cause notices is that the product viz. RTCWS falling under sub-heading 5902.10 is exempt from the payment of Basic Excise duty for captive use as per Notification No. 67/95-CE, dated 16-3-95, but there is no specific exemption from AED. The show cause notice culminated in the order of adjudication passed by the Commissioner against which is the present appeal. By the impugned order, the Commissioner classified the product under heading 59.06, and held that no AED is leviable under 59.06 and dropped the proceedings initiated under the two show cause notices ibid. It is against this order of the Commissioner that the Revenue has filed the appeal on direction from the Board, on the following grounds (a) Initially M/s. MRF had filed classification declaration classifying coated Rubberised Tyre Cord Warp Sheet under heading 59.02 and the said classification list was approved. They had cleared the RTCWS to their sister units on payment of duty by adopting the said classification. (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant product is called as coated or RTCWS and are used in the manufacture of tyres. (f) As per page No. 815 of the HSN Explanatory notes, the heading 59.02 covers, tyre cord fabric whether or not dipped or impregnated with rubber or plastics. (g) It is well-settled that any change in classification can only take prospective effect. 13. Smt. Bhagyadevi learned SDR appearing on behalf of the Revenue reiterated the grounds taken by the Revenue. She has also referred to the decision of the Tribunal in the case of Good Year (India) Ltd. v. CCE, New Delhi reported in 2003 (157) E.L.T. 560, wherein it was held that tyre cord fabric obtained by dipping grey tyre cord fabric in Resorcinol solution, applying rubber compound thereafter and finally calendering the fabric, was held to be specifically covered under heading No. 59.02 and not under heading 59.06. 14. On the other hand Shri Ignatius, learned Counsel for the assessee relied upon the decision of the Tribunal in their own case viz. MRF v. CCE, Goa and Chennai (Final Order Nos. 1370 to 1388/98, dated 20-7-98) reported in 1999 (105) E.L.T. 619 (T) in support of his contention that the product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ading 59.02 is not correct and requested for classification under heading 40.05, therefore, when the classification of RTFWS was not the subject matter of the show cause notice, the Commissioner by changing the classification has traversed beyond the scope of the show cause notice. Further as per Rule 173B, the proper officer to decide the classification was the Assistant Commissioner and for the purpose of reclassification or making any amendment to the already approved classification, the procedure for revising the classification, as per Rule 173B, have to be followed. 18. The Revenue in their present appeal viz. Appeal No. E/1395/98 has challenged the impugned order of revising classification of the product RTCWS suo motu by the Commissioner. The grounds advanced by Revenue such as: (a) Commissioner traversed beyond the scope of the show cause notice, and reclassified the product under a different heading. more particularly when the classification proposed by them was approved and they were clearing the goods on payment of duty in consonance with the approved classification. (b) They have not disputed the approved classification list in reply to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Leave is granted and the appeal is admitted the correctness or otherwise of the judgment of the Tribunal becomes wide open. In such an appeal, the Court is entitled to go into both the questions of fact as well as law. In such an event, the correctness of the judgment is in jeopardy. 15. Even in relation to a Civil dispute, an appeal is considered to be a continuation of the suit and a decree becomes executable only when the same is finally disposed of by the Court of Appeal". 19. In view of the above, I am of the opinion that the suggestion of the learned Sr. Counsel for the Revenue, to keep Appeal No. E/1395/98 pending till the outcome of the decision of the Hon'ble Supreme Court, is acceptable and I order accordingly. 20. I also note learned Member (J) on page 17 has held that the assessee is liable to pay duty BED/AED on RTCWS for the period from 11/96 to 4/97 for the reason that demand of duty on RTCWS confirmed by order-in-Original No. 65/97 of the Assistant Commissioner was not challenged by the assessee and consequently the assessee is liable to pay AED/BED on RTCWS. The period involved in the appeal No. E/1395/98 is 5/96 to 4/97. There is, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose yarn. Further, in the write up furnished by the respondents assessee vide their letter No. E/A/G/SO/231, dated 23-11-96, the assessee has stated as under: "Rubberised Tyre Cord Fabrics is essentially a nylon Warp Sheet containing nylon cord made by twisting the fabling two or more number of yarn plies. This is dipped in Resorcinol, Formal Dehyde. VP latex dip solution to impart the property of adhering to rubber. This will be rubberized by passing through a calender and applying rubber compound on both the side of the warp sheet" Rubberising the fabric as submitted by MRF itself consisted of two stages. They are as under (i) Rubberisation Stage-I: Dipped fabric (ii) Rubberisation Stage-Il : Calendered fabric The second stage of rubberisation is known as coating or calendering the dipped tyre cord warp sheets in the calendering machine with two or more rollers operated at selected surface speeds and controlled temperature for coating rubber on both sides of the dipped tyre Cord Warp sheet to a controlled thickness and the resultant product is called as coated or Rubberi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "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 garments, the pneumatic articles, camping equipment, sanitary goods etc. It is thus apparent from the Explanatory notes of HSN that all rubberised textile fabrics will fall under heading 59.06 except the fabric of Heading 59.02. Heading No. 59.02 specifically covers tyre cord fabric whether or not dipped or impregnated with rubber or plastics. As it is not in dispute that the impugned product is tyre cord fabric on which rubber compound has been applied and is used in the manufacture of tyres, the appropriate classification of the product will be under Heading 59.02 only and not under heading 59.06 . It is settled law that the heading which provides the most specific description shall be preferred to heading which provides a mere general description. In the present matter Heading 59.02 provide very specific description of the product in question'. In view of the above, respectfully followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l No. 8 has mentioned the items such as Dip Solution. Beads and DTCWS. Further, in the statement of facts, it is stated that the Assistant Commissioner order regarding RTCWS has been upheld by the Commissioner (Appeals) which statement is again factually incorrect. In the grounds of appeal also it is stated that Commissioner (Appeals) has allowed appeal in respect of items viz. Dip Solution Beads while in fact he has allowed appeal in respect of DTCWS also, though that product was not the subject matter in the Show cause notice as noted above. It shows how carelessly Revenue appeal has been prepared and filed. However, for the above discrepancy, I am not inclined to remand the matter. In respect of Beads Dip solution, it is settled that they are not subject to levy of duty. In respect of RTCWS, I hold same view as I have taken in appeal No. E/1395/98, that is, to await the decision of the Hon'ble Supreme Court. Ordered accordingly. Sd/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C.N.B. Nair, Member, (T)]. - The issues referred are to be found in paragraph 23 of the Division Bench order. The reference relates to Appeals No. E/1395/98 No. E/3577/98-Ex. 25. I have perused records and heard both sides. 26. The first issue referred is the maintainability of appeal No. E/1395/98-Ex. learned Counsel for the respondent states that this issue is not being contested. Thus, this issue is not in contest. Therefore, I answer that the appeal is maintainable. 27. The second issue is as to whether Appeal No. E/3577/98-Ex. is to be dismissed. In regard to this issue also, the respondent does not contend that the appeal should be dismissed at the threshold. The submission is that the appeal may be considered on merits and order passed. I answer this issue also accordingly. In sum, the appeals are required to be considered on merits by the Division Bench in the light of the judgment of the Hon'ble Supreme Court. 28. The reference is answered as above and registry is directed to place the appeals before the Division Bench. (Dictated pronounced in the open Court) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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