2017 (5) TMI 512 - AT - Central Excise

Tribunal denies SSI exemption for tyre retreading based on specific tariff classification

The Tribunal classified the goods under 4008.21 of the Central Excise Tariff Act, 1985, denying SSI exemption to the appellant engaged in retreading ... Classification of goods - retreading/resoling of the worn out tyres - the department took the view that the product which emerges as a result of the process undertaken in the appellant s unit was pre cured tread rubber strips classifiable under 4008.21 of the CETA, 1985 - assessee took the view that the product will be rightly classifiable under 4016 as other articles of vulcanised rubber other than hard rubber - Held that: - When we consider CETH 4008.21, we find that it specifically includes plates, sheets and strips for resoling or repairing or retreading rubber tyres. The third part of Chapter Note 9 supports the above view. On the other hand, we find that the Heading 4016 is a General Residuary Heading which covers other articles of vulcanized rubber other than hard rubber. Since the specific entry is to be preferred to a General Entry, we have no hesitation to hold that the impugned goods are classifiable under 4008.21. Since this particular tariff subheading is excluded from the purview of SSI Notification No.1/93, we come to the conclusion that the appellant will not be entitled to the benefit of SSI exemption during the relevant period. Extended period of limitation - Held that: - in respect of the same assessee, there have been earlier proceedings in which the process of manufacture and the classification of the goods have been considered and decided. For these reasons, we are of the view that the demand of duty needs to be restricted to the normal period of limitation. Appeal disposed off - decided partly in favor of assessee. Issues: Classification of goods under Central Excise Tariff Act, 1985, entitlement to SSI exemption, time limit for duty demandClassification of Goods:The appellant, engaged in retreading of tyres, was found manufacturing pre cured tread rubber strips. The department classified the product under 4008.21 of the CETA, 1985, denying SSI exemption. The appellant argued the goods should be classified under 4016, citing a Board clarification. The Tribunal analyzed the competing tariff entries and Chapter Note 9. It held the goods fell under 4008.21, being specific to resoling or retreading rubber tyres, over the general entry 4016. The Tribunal relied on precedents like Panamid Treads and Elgi Tyres cases to finalize the classification.Entitlement to SSI Exemption:The appellant claimed entitlement to SSI exemption under 4016. The Tribunal, however, concluded that since the goods were classified under 4008.21, excluded from SSI Notification No.1/93, the appellant was not entitled to the exemption. The decision was based on the specific nature of the tariff entry under which the goods were classified.Time Limit for Duty Demand:The Tribunal considered the time limit for duty demand, noting conflicting classifications in earlier proceedings and the need to restrict the demand to the normal period of limitation, which was six months in the relevant period. The Tribunal emphasized the importance of following the amended Chapter Note 9 and specific tariff entries in determining the classification of goods, ultimately disposing of the appeal with observations on the duty demand limitation.This detailed analysis of the judgment highlights the key issues of classification of goods under the Central Excise Tariff Act, entitlement to SSI exemption, and the time limit for duty demand, providing a comprehensive understanding of the Tribunal's decision and the legal reasoning behind it.