RANE BRAKE LININGS Vs. CCE

JUDGEMENT

(1.) THE dispute in this case relates to classification of what is called 'friction dust' for the period from 7.1.1981. For the prior period, it was classified under Tariff Item No. 15A(1)(i) of the old Central Excise Tariff as per order dated 24.2.1981 of the Assistant Collector of Central Excise as affirmed in Order -in -Appeal No. 483/81 dated 16.6.1981 of the appellate Collector of Central Excise and reaffirmed in Revisional Order No. 151/82 dated 6.3.82 of the Govt. of India. It may also be mentioned in this context that the writ petition filed by the party against the Government's revisional order was dismissed by the Hon'ble High Court of Delhi vide order dated 23.8.2001 in C.W.P. No. 2963/1982. The assessee accepted the above classification and accordingly paid duty for the period prior to 7.1.1981. For the subsequent period also, they had claimed classification of the same product under Tariff Item No. 68, this time relying on Tariff Advice No. 7/81 dated 7.1.1981 issued by CBEC. This claim as raised before the appellate Collector was disposed of in Order -in -Appeal No. 483/81 ibid as follows: As to the contention that the product has to be classified as per the Tariff Advice No. 7/81 dated 7.1.81., I have to state that in the absence of details as to the resinuous characteristic or not of the product in the test report of Chemical Examiner, I cannot decide the issue. The appellants are asked to approach the lower authority and seek remedy as per the Tariff Advice.

(2.) THE present proceedings originated from the aforementioned part of the appellate Collector's Order No. 483/81 dated 16.6.81. The appellant is took up the matter with the Assistant Collector and the latter issued a show -cause notice dated 9.7.81 proposing continuance of classification of the product under Tariff Item No. 15A(1)(i) de hors Tariff Advice No. 7/81 dated 7.1.81 ibid. The notice alleged that, as per the Chemical Examiner's report already communicated to the noticee, friction dust was a phenolic resin with resinuous properties classifiable under the above tariff item and continued to be so even after issue of the said tariff advice. It also asked the appellants to show cause why (a) they should not take out a licence under Rule 174 of the Central Excise Rules, 1944 in terms of the above classification (b) duty should not be recovered from them for the period from 7.1.81 under Rule 10 of the said rules/Section 11A of the Central Excise Act and (c) future assessments of the product should not be done under the above tariff item. In their reply to the show -cause notice, the appellants refused to accept the Chemical Examiner's report and asserted that their product had no resinuous properties so as to be classified under Tariff Item 15A(1)(i). In this connection, they relied on test certificates issued by (1) Central Leather Research Institute [CLRI], (2) the Department of Chemical Technology, University of Bombay and (3) the Department of Chemistry, University of Manchester. The appellants also suggested that a sample of the product be sent to the Chief Chemist, Central Revenues Control Laboratory (CRCL), New Delhi for test and report. The Assistant Collector sent a sample to the Chemical Examiner and obtained his report dated 23.9.1981 which took the view that friction dust should be treated as a phenolic resin. A copy of the Chemical Examiner's report was submitted to the appellants, who, still not satisfied, reiterated their request for retest by the Chief Chemist, CRCL, New Delhi, which was not acceded to. The Assistant Collector, after considering the Chemical Examiner's test report and retest report, held that friction, dust being a condensation product and phenolic resin required to be classified under Tariff Item No. 15A (1)(i) for the period from 7.1.1981 also. Accordingly, he directed the appellants to take out central excise licence under Rule 174 and observe other central excise formalities in respect of the product classified under the above tariff item. Duty of excise was also demanded in respect of the clearances made from 7.1.1981. Against this decision of the Assistant Collector communicated in order dated 21.11.1981, the appellants filed a revision application with the Collector of Central Excise, wherein they urged that a sample of their product be tested at CRCL, New Delhi. They also undertook to pay duty on the goods if the CRCLs analysis report went against them. The party's request was favourably considered by the Collector, who collected remnant samples from the Chemical Examiner, Madras and sent the same to CRCL, New Delhi for retest. The Chief Chemist, CRCL, upon retest of the samples, opined that the product in question be considered as a plastic material (phenol -formaldehyde) classifiable under Tariff Item No. 15A(1)(i) as 'phenoplast'. Considering the Chief Chemist's findings, the Collector upheld the decision of the lower authority. Against the Collector's decision, the party approached this Tribunal, which remanded the case to the Collector for fresh decision after supplying a copy of the Chief Chemist's report to the party and giving them an opportunity of being heard vide Order No. 568/1987 -C dated 29.7.1987 of the Special Bench 'C' of the Tribunal. Pursuant to the remand, the Commissioner of Central Excise, Chennai - II passed Order -in -Original No. 9/2005 dated 30.5.2005 confirming classification of friction dust manufactured by the appellants since 7.1.1981, under Tariff Item No. 15A(1)(i). Hence the present appeal.

(3.) TARIFF Item No. 15A(1)(i) is reproduced below: Item No. Tariff Description 15A Artificial or synthetic resins and plastic materials and cellulose esters and ethers, and articles thereof - -