CEAT LTD. Vs. COMMISSIONER OF CENTRAL EXCISE,

JUDGEMENT

(1.) THE issue in this appeal relates to classification of processed tyre cord captively consumed in the manufacture of both exempted variety of tyres, namely animal drawn vehicle tyres and dutiable tyres. Additional excise duty of Rs. 2,62,68,253/ - was confirmed holding that the goods fall for classification under heading 59.02. In addition basis excise duty of Rs. 1,19,520/ - has also been levied. Penalty of Rs. 60 lakhs has also been imposed upon the appellant.

(2.) THE contention of the appellant that the goods in dispute fall for classification under heading 59.06 requires to be accepted in view of the earlier decisions of the Tribunal, including that in the case of the same assessee, as seen from the final order No.C -1/504 -505/99 -WZB dated 12/03/1999 reported in 1999 (111) ELT 383. Since we accept the contention regarding classification under heading 59.06 the contention that no additional excise duty is payable under this heading as seen from the tariff is also accepted. Therefore the demand of additional duty of excise is not sustainable and accordingly we set aside the same.

(3.) THE contention of the appellant that even basis duty of excise is not payable by virtue of the fact that exemption is available from payment of such duty in terms of Notification 5/99 dated 28/02/1999 (in terms of serial No. 163 of the table annexed to the notification) is also to be accepted. Serial No. 163 grants exemption from payment of duty to rubberised textile fabrics falling under 5906.99 if no credit under Rule 57A or 57B of the Central Excise Rules has been availed and the appellant although availed of the modvat credit, reversed the same and therefore have satisfied the condition set out in serial No. 163 of the table to the notification. Hence no basis excise duty is payable by them.