Tariff classification conflict on rubberised tyre cord fabric led to reference before a Larger Bench.

Rubberised nylon tyre cord fabric processed by dipping in resorcinol solution, applying rubber compound and calendering was the subject of a tariff classification dispute under Heading 5902 versus Heading 5906 of the Central Excise Tariff. The text notes conflicting Tribunal views on whether calendering shifted the product to Heading 5906 or whether the process left it classifiable under Heading 5902, with HSN Notes considered relevant but not conclusively applied. Because of this divergence, the classification issue was not finally decided and was referred to a Larger Bench for authoritative determination.

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Issues: Whether rubberised nylon tyre cord fabric, after dipping in resorcinol solution, application of rubber compound and calendering, is classifiable under Heading 5902 or Heading 5906 of the Central Excise Tariff Act, 1985; and whether the conflicting views on the point required reference to a Larger Bench.

Analysis: The competing Tribunal decisions were examined against the HSN Notes. One line of decisions treated the product as classifiable under Heading 5906, particularly where calendering was involved, while the contrary line held that the process did not result in new marketable goods and that the product remained under Heading 5902. The order records that the earlier decisions cited by the Commissioner (Appeals) had not fully addressed the effect of the HSN Notes and the process of calendering, and that there was a divergence of views on the correct classification.

Conclusion: The classification controversy was not finally decided in this order and the matter was ordered to be placed before a Larger Bench for determination.

Final Conclusion: The appeals were not finally resolved on merits at this stage, and the question of the correct tariff classification was left for authoritative determination by a Larger Bench.

Ratio Decidendi: Where there is a material conflict between co-ordinate Bench decisions on tariff classification, judicial discipline requires reference to a Larger Bench for resolution.

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