RALSON (INDIA) LTD., METRO TYRES Vs. CCE

JUDGEMENT

(1.) M /s. Ralson (India) Ltd. (appellants in Appeal No. 419/2002), M/s Metro Tyres Ltd. (in Appeal No. 420/2002) and M/s Govind Rubber Ltd. (in Appeal No. 421 /2002) are engaged in the manufacture of tyres and tubes of rubber for Bicycles and Cycle Rickshaws. They manufacture 'compounded rubber' of heading No. 40.05 of the Central Excise Tariff Schedule and use the same captively in the manufacture of such tyres and tubes. Prior to 1.3.94, "compounded rubber" was wholly exempt from duty under Notification No. 152/87 -CE dated 25.5.87. This notification was rescinded by Notification No. 64/94 -CE dated 1.3.94 whereby the exemption stood withdrawn. However, the exemption was restored to compounded rubber by Notification No. 74/94 -CE dated 28.3.94. In the result, for the brief period from 1.3.94 to 27.3.94, there was no exemption from duty in respect of compounded rubber. This is the period relevant to the dispute in these appeals.

(2.) AS the appellants had not paid duty of excise on compounded rubber cleared for captive consumption for the above period (1.3.94 to 27.3.94), the Department issued show -cause notices to them. The notices were contested on numerous grounds. The Commissioner of Central Excise, in adjudication of the show -cause notice, passed order -in -original No. 27 -29/97 dated 27.10.97 confirming demands of duty of Rs. 46,97,428, Rs. 46,77,469 and Rs. 54,21,524 against M/s Ralson (India) Ltd., M/s Metro Tyres Ltd. and M/s Govind Rubber Ltd. respectively. The order of adjudication was challenged before this Tribunal by these appellants and the Tribunal, by order dated 26.11.99, remanded the matter for de -novo adjudication vide 2000 (36) RLT 64. The adjudicating authority, in the de -novo proceedings, again confirmed the demands of duly as above as per Order No. 86 -88/CE/2001 dated 29.11.2001. The present appeals are against this order of the Commissioner. The so -called cross -objections filed by the Department are only in the nature of arguments against the grounds of these appeals as well as in support of the impugned order. These are not cross -objections contemplated under Sub -section (4) of Section 35 -B of the Central Excise Act.

(3.) IN the remand order passed by this Tribunal, there was a direction for draw of samples of compounded rubber from the three factories for analysis as also for giving the assessees a reasonable opportunity of being heard. Pursuant to the remand order, the assessees filed identical written submissions with the Commissioner, wherein they raised various contentions and cited judicial decisions in support thereof. They also relied on a certificate dated 1.12.97 of Dr. S.N. Chakravarty, Chairman, Indian Rubber Institute as also on certain circulars of the Central Board of Excise and Customs. Samples of compounded rubber were drawn from the factories of the appellants and sent for testing to the Central Revenue Control Laboratory (CRCL), which, after testing of the samples, issued identical reports in respect of the three assessees' samples. This report read as under: