POPULAR RUBBER INDUSTRIES Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE issue involved in this appeal, filed by M/s. Popular Rubber Industries, is whether the Micro Rubber 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 sub -heading 3921.19 as confirmed by the Commissioner in the impugned order.

(2.) SH . B.L. Narasimhan, learned Advocate, submitted that the impugned order has been passed by the Commissioner on remand by the Appellate Tribunal vide Final Order No. 25/2000 -C, dated 5 -1 -2000 [2000 (117) E.L.T. 65 (T)], that the matter was remanded to the Adjudicating Authority with the direction to get the proper sample of the product re -tested and to pass a well -reasoned and speaking order after affording a reasonable opportunity of hearing to the appellants; that a team of Central Excise Officers visited their factory on 10 -5 -2001 and they got two samples prepared in their presence; that one sample was of Vulcanised EVA Rubber Sheet and the other was of Unvulcanised EVA Rubber Sheet; that from the details of ingredients, submitted by them, it is clear that EVA of about 55 per cent was used in the preparation of sample sheets handed over to the officers for onward testing; that the samples were tested by the Central Institute of Plastics Engineering and Technology (CIPET), Amritsar; that perusal of the test report reveals that both vulcanised and unvulcanised slabs passed Elongation Test in the sense that those slabs were capable of being elongated to more than 300 per cent without break and that both vulcanised and unvulcanised slabs passed the Recovery test in the sense that these slabs, on being extended to twice their original length, returned to their original form within 5 minutes upto a length not greater than 1.1/2 times the original length; that the result shows that vulcanised slabs on being extended recovered upto 110 per cent of its original length and unvulcanised slabs attained upto 112 per cent of its original length.; that since the results in both the tests prescribed under Note 4(a) of Chapter 40 of the Tariff were in favour of the appellants, they requested the Adjudicating Authority to vacate the proceedings; that, in spite of test results in their favour, the Commissioner has once again held that the goods, in question, are classifiable under sub -heading 3921.19 of Central Excise Tariff without the benefit of Notification No. 319/86 -C.E. dated 22 -5 -86 on the ground that the present test report is applicable at the best in respect of Mirco Cellular Rubber Sheets without EVA only as the appellants have stopped purchasing and using EVA w.e.f. 1 -1 -97 as per the statement of Sh. Arun Kumar Makkar, Partner; that such test report cannot be made applicable to the Micro Cellular Rubber Sheets with EVA, manufactured by the appellants during the period from 1 -10 -92 to 27 -8 -96; that the Commissioner has given in his findings that the report dated 4 -1 -2002 cannot be made basis for determining the classification of the product, in question. The learned Advocate, further, mentioned that the Adjudicating Authority has then proceeded to decide the classification based on the test report given earlier in the original proceedings; that the Commissioner's reliance, on the earlier test report, is wholly mis -placed and contrary to the remand direction of the Appellate Tribunal; that when the Tribunal had specifically held that the samples, drawn under the original proceedings were not the correct samples, the classification decided based on the said report of the said samples, was specifically set aside, it is not open to the Commissioner to rely on the very said report in the remand proceedings to decide the classification against them. He, finally, submitted that they had also handed over a note briefly describing the process of making vulcanised and unvulcanised EVA Rubber product with various ingredients and their percentage used in making sheets, that EVA was predominantly used as one of the raw -materials in making sheets and as such there remains no doubt that the proper samples were prepared by the appellants containing EVA as one of the raw -materials; that no question was also raised by the officers at the method of preparation of the samples; that from April, 1997, they had started manufacturing EVA Rubber Sheets, which is clear from their SSI declaration; that Sh. Arun Kumar Makkar has correctly averred in his Affidavit dated 2 -4 -2001 that EVA Rubber of the same type, as manufactured by the appellants during the period of dispute, are still being manufactured by the appellants and that there had been no change in the type and constituent of raw -materials and other inputs in the manufacture of EVA Rubber Sheets and process of manufacture also continues to be the same as was present during the period of dispute; that in any case, the appellants are eligible for the exemption under SSI Exemption Notification No. 175/86 -C.E, and its successor Notifications; that both the inputs and the finished products were notified goods under SSI exemption and in terms of Explanation VII to Notification 1/93 -C.E., vulcanised sheets, which are used as inputs in the manufacture of finished products within the factory of production, was not to be taken into account for computing the aggregate value of clearances for the purpose of Notification. He relied upon the decision in the case of C.C.E. v. Universal Electrical Industries, 2003 (153) E.L.T. 266 (S.C.); that in view of this decision, no portion of the duty demand, confirmed against them, is sustainable.

(3.) COUNTERING the arguments, Ms. Charul Barnwal, learned S.D.R., reiterated the findings as contained in the impugned order and emphasised that as the samples for the present test report were drawn from the products of the appellants, manufactured during May 2, 2001, the test report, on the basis of such proceedings, cannot be relied upon as the dispute relates to the goods manufactured during the period 1 -10 -2002 to 27 -8 -96; that only test report available in respect of goods during the period of dispute is the first test report, the same has to be relied upon for determining the classification of the goods in question.