Settled tariff classification for rubberised tyre cord fabric defeated the excise duty demand on identical goods.

Dipped and rubberised nylon tyre cord fabric was held classifiable under Heading 59.06 of the Central Excise Tariff, following prior Tribunal rulings on identical processed tyre cord fabric. The Tribunal found no valid basis to distinguish the earlier coordinate bench decisions and noted that departmental authorities were bound to follow the settled classification. As both sides accepted that no additional excise duty would arise if the goods fell under Heading 59.06, the duty demand could not survive and was set aside.

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Issues: Whether dipped and rubberised nylon tyre cord fabric was correctly classifiable under Heading 59.06 of the Central Excise Tariff Act, 1985, and consequently whether additional excise duty was payable.

Analysis: The dispute turned on the classification of the processed tyre cord fabric. The product was the same as that considered in earlier Tribunal decisions, which consistently held that dipped, rubberised or calendered tyre cord fabric is classifiable under Heading 59.05, now Heading 59.06. The Court found no valid basis to distinguish those rulings, noted that the Commissioner could not disregard binding coordinate bench decisions on the ground that a different heading was canvassed in the earlier cases, and held that the departmental authorities were bound to follow the settled classification. Since both sides accepted that no additional excise duty would arise if the goods fell under Heading 59.06, the demand could not survive.

Conclusion: The goods were held classifiable under Heading 59.06 and not under Heading 59.02, and the duty demand was set aside in favour of the assessee.

Ratio Decidendi: Dipped or rubberised tyre cord fabric, when used captively in tyre manufacture, is classifiable under Heading 59.06 where prior Tribunal precedent on identical goods governs, and a contrary demand for additional excise duty cannot stand.

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