1983 (2) TMI 287 - AT - Central Excise

Dismissed appeal upholds excise duty classification, rule 9(2) applicability, and refutes non-speaking order claim. Kerala HC decision binding.

The appeal was dismissed as lacking merit, with the judgment supporting the authorities' decision on the classification of the product for excise duty, ... - Issues:1. Classification of the product known as 'cushion' for excise duty.2. Applicability of rule 9(2) of the Central Excise Rules.3. Validity of the order being a non-speaking order.Detailed Analysis:Issue 1: The controversy revolved around the classification of the product 'cushion' for excise duty. The appellants argued that the product was an intermediary one used internally for manufacturing a finished product, 'Tread Rubber with Cushion Backing,' and thus should not be separately liable for excise duty under Tariff Item 16A(2). They contended that the product was not marketed or sold in its semi-finished stage and was not used for re-soling or retreading of tires. However, the authorities held that the product fell under the description of 'cushion compound' and was liable for excise duty as per the Central Excise Tariff. The judgment of the Kerala High Court supported this view, stating that the product was indeed leviable to excise duty.Issue 2: The question of the applicability of rule 9(2) of the Central Excise Rules was raised. The appellants argued that the notice for demand was not sustainable under this rule as there was no clandestine removal, and rule 10 was also cited as not applicable. However, the authorities rejected these arguments, stating that rule 9(2) did not require clandestine removal for its application, and rule 10 pertained to cases of short levy, not non-levy as in this case.Issue 3: The appellants contended that the order was a non-speaking order, but the authorities disagreed, finding that the arguments presented were based on misconceptions and not sustainable. The judgment highlighted that the issue had already been conclusively decided by the Kerala High Court and that a retrospective amendment further solidified the liability of the product for excise duty.In conclusion, the appeal was dismissed as lacking merit, with the judgment supporting the authorities' decision on the classification of the product for excise duty, the applicability of rule 9(2), and refuting the claim of a non-speaking order. The judgment emphasized the binding nature of the Kerala High Court's decision and the retrospective effect of the amendment to the Central Excise Rules.