POPULAR RUBBER INDUSTRIES Vs. COMMR. OF C. EX.

JUDGEMENT

(1.) THE issue involved in this appeal filed by M/s. Popular Rubber Industries is whether the Micro Cellular Rubber Sheets, manufactured by them is classifiable under Sub -heading 4008.11 of the schedule to the Central Excise Tariff Act as claimed by them or under Sub -heading 3921.19 as ordered by the Commissioner, under the impugned order dated 30 -4 -1998.

(2.) BRIEFLY stated the facts are that Central Excise Officers visited the factory premises of the Appellants on 27 -8 -1996 and noticed that they were manufacturing and clearing Micro Cellular Rubber Sheets with Ethylene Vinyl Acetate (MCEVA) without payment of duty. They first detained the stock of finished goods valued at Rs. 1,40,760 on the day of visit and later on seized the same on 26 -2 -1997. The Commissioner, under the impugned order has classified the product under Sub -heading 3921.19 of the Tariff, directed the Assistant Commissioner to determine the value of the impugned product and work out duty payable after allowing the benefit of Notification No. 175/86 and imposed a penalty equivalent to duty amount under Section IIAC of the Central Excise Act, holding that the essential character of the impugned product is acquired from EVA and not rubber; that Rule 3(b) of the Rules for the Interpretation of the Schedule is attracted.

(3.) SHRI V. Sridharan, learned Advocate, submitted that the MCEVA Rubber Sheets are captively consumed by them in the manufacture of footwear; that the Commissioner, relying upon the test reports given by Central Institute of Plastic Engineering and Technology, Amritsar in which it was mentioned that the sample is "Foam form of Ethylene Vinyl Acetate" and sample is "Foam of EVA and is plastic dominant " respectively, classified the im -pugned product under Sub -heading 3921.19. By referring to Notes 1 and 4 to Chapter 40, the learned Counsel contended that the sample should have been taken at the raw material stage instead of at the finished stage as extenders, plasticisers and fillers were also present in the sample which was not permitted; that as the test has not been carried out according to Note 4 to Chapter 40, the same cannot be made basis for classification of the impugned product. The learned Advocate also referred to the letter dated 2 -1 -1998 from Indian Institute of Technology, Delhi in which it was mentioned that for the purpose of test the sample should be cured slabs without fillers and extenders as per the Indian Standards and also International Standards like ASTM (USA), DIN (Germany) and JIS (Japan). The learned Advocate also submitted that EVA had been used only in a small percentage of sheets manufactured by them and even there, the percentage of EVA used varied from 10% to 25%; that as per definition of rubber and synthetic rubber in Polymer Science Dictionary, co -polymers with 30 -40% Vinyl Acetate are useful rubber and may be vulcanised with peroxides; that products had not been tested in the manner prescribed for the test of synthetic rubber and EVA itself is classifiable under Heading 40.02 and EVA rubber sheets fall under Chapter 40. He relied upon the decision in the case of Micro Rubber Industries P. Ltd. v. C.C.E., New Delhi in which Tribunal, vide Order Nos. 855 -856/98 -C, dated, 21 -9 -1998, remanded the matter as the samples had given differing results. He further mentioned that the issue involved is not as to what material is predominant in the finished product in question; that the question to be decided is whether the product satisfies the 2000 ] POPULAR RUBBER INDUSTRIES v. COMMR. OF C. EX., NEW DELHI 67 definition of synthetic rubber; that according to Note 4(C) to Chapter 40, the term 'Synthetic Rubber' applies also to natural rubber modified by grafting or mixing with plastics, that such mixture has to satisfy the following tests provided in Note 4(a)