M R F LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) Whether rubberised tyre cord warp sheets should be classified for the purpose of levying excise duty under Item 16A(2) or under either Item 19I(b) or Item 22 of the Central Excise Tariff is the question that falls for determination of this Court. The petitioners indeed challenge in this writ petition the orders dated 15th October, 1982, and 6th December, 1982, made by the second and third respondents respectively, seeking to levy excise duty on rubberised tyre cord warp sheets employed in the manufacture of automobile tyres under Item 19I(b) or Item 22, instead of under Item 16A(2), of the Central Excise Tariff, as well as Tariff Advice No. 52/80, dated 22nd September, 1980.

(2.) The petitioners are a company incorporated under the Companies Act, carrying on the business of manufacturing automobile tyres and rubber products in their factories, inter alia, at Usgao, Goa. They utilise tyre cord warp sheets and cotton fabrics viz., nylon tyer cord warp sheets, rayon tyer cord warp sheets and grey industrial cotton fabrics, for the manufacture of tyres and repair materials for repair of tyres. These tyre cord warp sheets and cotton fabrics go into the basic structure of tyres, after being duly rubberised in an integrated and continuous process. It appears that these rubberised tyre cord warp sheets are of a sticky nature, having a limited shelf life of about six weeks and requiring to be handled with liner cloth.

(3.) It further appears that no excise duty was being charged to the petitioners on account of rubberised tyre cord warp sheets being used in the process of manufacturing automobile tyres and that the petitioners had filed on 25th August, 1981, a classification list claiming that rubberised cotton warp sheets (cotton tyre cord) to fall under Item 16A(2) of the Central Excise Tariff. However, by a notice dated 21st October, 1981, the third respondent required the petitioners to show cause why the said classification list should be accepted and the product should not be reclassified under Item 19I(b). The petitioners replied on 25th November, 1981, to the said show cause notice and finally, the second respondent made the impugned order dated 15th October, 1982. It seems that after this order, the petitioners addressed a letter dated 11th November, 1982 to the second respondent drawing his attention to the fact that the order dated 15th October, 1982. It seems that after this order, the petitioners addressed a letter dated 11th November, 1982, to the second respondent drawing his attention to the fact that the order dated 15th October, 1982, was relating only to the rubberised cotton tyre cord warp sheets and did not cover the processing of rayon or nylon tyre cord. Then, the third respondent issued the impugned order dated 6th December, 1982, to the effect that the earlier order dated 15th October, 1982, was covering both cotton and rayon or nylon tyre cord warp sheets and, therefore, the petitioners should classify these products either under Item 19 or Item 22, as the case may be. Similarly, the fourth respondent has freshly classified the said warp sheets as fabrics falling under Item 19 or Item 22 of the Central Excise Tariff if they are cotton or man-made warp sheets, respectively.