GOVIND RUBBER LTD Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE brief facts of the case are that all the three appellants are engaged in the manufacture of rubber tyres and inner tubes for tyres falling under Chapter 40 of the Central Excise Tariff Act, 1985. They also make compound rubber for use in the manufacture of tyres and inner tubes. Compound rubber was exempt from duty vide Notification No. 152/87, dated 25 -5 -1987 and Notification No. 74/94, dated 28 -3 -1994. The dispute in the present appeals covers the period from 1 -3 -1994 to 27 -3 -1994 when no exemption notification was in force.

(2.) SHOW cause notices dated 3 -10 -1994 were issued proposing to recover duty on the compounded rubber during the above period, on the ground that exemption was not available during the period. The appellants replied to the show cause notices requesting that the adjudication may be deferred till a decision by the Government on the representation of the assessees for issue of a Notification under Section 11C of the Central Excise Act was taken. The matter was kept pending till September 1997 when a personal hearing was held, when the appellants raised the plea that there was no intention of the Government to levy duty on compounded rubber which is borne out from the issue of Notification No. 74/94 -C.E., which re -iterates the exemption earlier available to compounded rubber, and that compounded rubber was not marketable and therefore, not dutiable. The Adjudicating authority held that the test of marketability was satisfied since the goods had shelf life and were easily transportable, relying upon the statement of Shri Jaswant Singh, General Manager of M/s Govind Rubber Ltd. He confirmed the duty demands raised in the notices. Hence these appeals.

(3.) WE have heard Shri G. Shiv Dass, learned Counsel who contends that the item in question is not marketable due to its short shelf life and transport from one unit to another of the assessees themselves, which are situated at short distance, is not determinative of the marketability of the product. In support of this contention, he relies upon the decision of the Tribunal in the case of Everest Rubber Works reported in [1999 (107) E.L.T. 41]; in the case of Commissioner of Central Excise v. Hindustan Cocoa Products reported in [1996 (87) E.L.T. 299] and in the case of United Felt Carpets reported in [1999 (33) RLT 956]. He refers to a certificate dated 1 -12 -1997 of the Indian Rubber Institute, New Delhi stating that the rubber compounds for cycle tyres are not marketed commercially and also submits that the quantity of retarder chemicals used by the appellants makes the product non -marketable, since the percentage of retarded chemicals would prevent curing of the rubber at dim temperature only for one or two days and thereafter the product will start curing and will become useless, and will require to be scrapped. The learned Counsel submits that the appellants did not have adequate opportunity to substantiate their claim that the product in dispute is not marketable and therefore, pleads that they should be given another chance to explain their case with reference to technical literature, etc. and prays for remand in the interest of justice.