TMI Blog2005 (1) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... dication order is a well reasoned order, we want the Adjudicating Authority to also examine the matter in the light of the above Note-4 to Chapter 59 and Note-4 to Section XI. We have also given an opportunity to the department to lead evidence, both on the process as well as on marketability. The basic question which the Adjudicating Authority is required to decide is - whether Dipped Tyre Cord Fabric is an independent product in terms of manufacture and marketability? Accordingly, the question of excisability and the questions of classification of Dipped Tyre Cord Fabric are remitted to the Commissioner (Adjudication), Goa for a fresh determination in accordance with law. The controversy regarding classifiability of Rubberised Tyre Cord Fabric is no more res integra. The said product is classifiable under Chapter Heading 59.06. We do not find any infirmity in the impugned judgment of the Tribunal on this point. - 1476-1493 of 1999 - - - Dated:- 25-1-2005 - S.N. Variava, Dr. A.R. Lakshmanan and S.H. Kapadia, JJ. [Judgment per : S.H. Kapadia. J.]. - The main question which arises for determination in this set of Civil Appeals is - whether Dipped Nylon Tyre Cord Warp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refers to Rubberised Textile Fabric. It was observed in the impugned order that in order to be categorized as Rubberised Textile Fabric, the product should have a predominance of rubber in proportion to the fabric. According to the Commissioner, the process of dipping did not bring about a predominance of rubber in the product. According to the Commissioner, dipping was a process ancillary to manufacture. According to the Commissioner, dipping was a stage prior to rubberising. It was a stage prior to coating of compounded rubber on both sides of the tyre cord. Consequently, it was held that Dipped Tyre Cord Fabric was an independent product classifiable under Tariff Heading 59.02, on which additional excise duty was payable by the assessee. It was further held that Dipped Tyre Cord Fabric was capable of being marketed and, therefore, additional excise duty could be levied thereon. 5.Being aggrieved by the order dated 31-10-1997, M/s. M.R.F. Ltd. went in appeal to Customs, Excise and Gold (Control) Appellate Tribunal (hereinafter referred to as "the Tribunal"). At this stage, it may be noted that the assessee challenged similar orders passed by the Commissioner (Adjudication), Goa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther submitted that in the present case, the Tribunal has not examined the "process of dipping" and it has merely followed the previous judgments which do not have any application to Dipped Tyre Cord Fabrics. 9.Mr. F.S. Nariman, learned Senior Advocate appearing on behalf of M/s. M.R.F. Ltd. submitted that Dipped Tyre Cord Fabric was not an independent product in terms of manufacture and marketability. He submitted that the assessee did not manufacture Dipped Tyre Cord Fabric. He submitted that Dipped Tyre Cord Fabric was similar to friction cloth. He submitted that there is no evidence of Dipped Tyre Cord Fabric being marketable. He submitted that in order to determine whether the product was excisable or not, it was necessary to familiarize oneself with the product as well as with the manufacturing process. He contended that Grey Tyre Cord Fabric after going through the process of dipping loses its identity and becomes a different product commercially. He submitted that the product under Chapter Heading 59.02 was the basic product and when dipped it gets shifted from textile to rubber. He submitted that Chapter Heading 59.02 did not use words, such as, "Impregnated, coated, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purposes of Heading No. 59.06, the expression 'rubberised textile fabrics' means : (a) Textile fabrics impregnated, coated, covered or laminated with rubber, (i) weighing not more than 1,500 g/m2; or (ii) weighing more than 1,500 g/m2 and containing more than 50 per cent by weight of textile material; (b) Fabrics made from yarn, strip or the like, impregnated, coated, covered or sheathed with rubber, of Heading No. 56.04; (c) Fabrics composed of parallel textile yarns agglomerated with rubber, irrespective of their weight per square metre. This heading does not, however, apply to plates, sheets or strips of cellular rubber, combined with textile fabric, where the textile fabric is present merely for reinforcing purposes (Chapter 40), or textile product of Heading No. 58.10." 12. On reading above provisions, we find that it is the rubber content of the product, which is the main determinative test to decide whether Dipped Tyre Cord Fabric is classifiable under Chapter Heading 59.02 or 59.05 (now 59.06). To be categorized as Rubberised Tyre Cord Fabric, the product must have pre-dominance of rubber in proportion to fabric. It is for this reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the question of classification of Rubberised Tyre Cord Fabric, we may point out that the Superintendent of Central Excise having jurisdiction over M/s. M.R.F. Ltd., Arkonam issued two show cause notices dated 3-12-1996 and 3-6-1997 proposing to levy additional excise duty on Rubberised Tyre Cord Fabric captively consumed in manufacture of tyres during the period May, 1996 to October, 1996 and during the period November, 1996 to April, 1997 respectively. By the said show cause notices, the department sought to classify Rubberised Tyre Cord Fabric under Chapter Heading 59.02. M/s. M.R.F. Ltd., however, contended that Rubberised Tyre Cord Fabric was classifiable under Chapter Heading 40.05. According to the assessee, on rubberization, the content of rubber in the product exceeded the prescribed limit vis-a-vis the fabric and, therefore, it was classifiable under Chapter Heading 40.05. However, the Commissioner, Chennai came to the conclusion that Rubberised Tyre Cord Fabric was classifiable under Chapter Heading 59.05 (now 59.06). He placed reliance on the judgments in Falcon Tyres (supra) and Vikrant Tyres (supra). This order was passed by the Commissioner, Chennai on 25-9-1997 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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