MATADOR FOAM Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) THESE six appeals involve the common question of law and facts and therefore being taken up together for final disposal.

(2.) IN order to appreciate the rival contentions we reproduce TH 94.01 and 40.08 : -

(3.) REBUTTING the contention of the learned Advocate, Shri A.K. Jain, learned SDR reiterated the judgment of the Tribunal in the case of J.K. Foam, supra as already set out above, on merits of the classification. As regards the limitation, learned SDR, Shri Agarwal points out that the Apex Court's judgment in the case of H.M. Bags, (supra) is not at all relevant inasmuch as the show cause notice had been issued before the consideration of the matter in the Tariff Conference. It was a suo moto action undertaken by the Commissioner which incidentally gets supported by the decision of the Tariff Conference of the Collectors. The show cause notices having been issued within the period of six months vis -a -vis the periods of demand of duty, the show cause notices cannot be challenged on limitation. He submits, as regards the plea of the learned Advocate that a classification has to be given effect prospectively, while this may be true as a general proposition but it is also settled that refund or recovery of duty is subject to limitation, as laid down in the law. For this proposition he relies on Apex Court's in the case of Ballarpur Industries reported in [1995 (76) E.L.T. 499] in which it has been held that demand for previous six months can always be issued in case of recovery of duties irrespective of any reason. He further submits that this judgment of the Apex Court has been delivered by learned three Judges as against the judgment of the two learned judges of the said court in the case of Bhilwani Textiles. Pleas of both sides have been carefully considered. It is true that there is a direct judgment in the case of J.K. Foam which holds that similar articles are classifiable under TH 94.01 and the scooter seats under TH 87.14 but as rightly pointed out by the learned Advocate. Shri A.K. Jain for the appellants that the said judgment of the Tribunal does not take into account the earlier judgments of the Tribunal in the case of M.M. Rubber, extracts of which have already been set out above. The Tribunal's judgment in J.K. Foam also does not take into account Chapter Note 9 of Chapter 40 which holds, inter alia, that TH 40.08 applies to plates, sheets, strips and blocks of regular geometric shape, uncut or simply cut to rectangular (including square) shape whether or not having the character of articles. Even profile shapes falling under TH 40.08 applies to products whether or not cut to length or surface worked but not otherwise worked. On the other hand, HSN includes bus seats within the scope of TH 94.01. Question before us is whether the goods, described as bus seats in the classification lists and at the same time described as sheets, plates, profile shapes under TH 40.08 can be considered as bus seats in the form in which they are cleared from the factory. It has been the consistent stand of the appellants before the lower authorities that the products cleared by them are not covered by any rexin or cloth or is attached with any plywood beneathed as far as bus seats are concerned. Therefore, the product as cleared, cannot be considered as a bus seat so as to be covered under TH 94.01. In this connection, the Professor S.M. Mathur of H.B.T.I., Kanpur is relevant which states that requisite sample of foam is vulcanised cellular rubber and that it is in profile shape. Reliance placed on a latter dated 23/27 -10 -1990 from the office of the Deputy Manager, U.P. State Transport Corporation, Kanpur to the effect that for manufacturing bus seat apart from specific size of seat cushion, plyboard, rexin, frame of angle or pipe is also used. After assembling all these a bus seat comes into existence. We are, therefore, of the view that the product, as is cleared by the appellants in the form of a 'cushion' of bus seat of cellular rubber would not fall TH 94.01. Support for this can also be drawn from Note l(a) of Chapter 94, as already set out above, which excludes specifically cushions falling, inter alia, under Chapter 40 from the scope of Chapter 94. Further, as rightly pointed out by the learned Advocate for the appellants, Tribunal's judgment in J.K. Foam does not take into account the earlier judgments of the Tribunal in the case of M.M. Rubber. It will be observed from the said judgment of the Tribunal in M.M. Rubber that a distinction has been drawn between a bus seat and 'foam sponge' as described in T.I. 16A of the earlier CET. The article remains the same i.e. the 'cushion' and the cushion has been specifically excluded from the Chapter Note l(a) of Chapter 94.