Bituminised hessian felt classification under Chapter 59.09 and blown bitumen process not amounting to manufacture

Bituminised hessian-based felt is treated as classifiable under Chapter Heading 59.09 rather than Chapter Heading 68.07, because tariff entries must be read in the context of the goods specifically enumerated in the heading. On that basis, the exemption benefit under Notification No. 53/65-C.E. dated 20-3-1965 was available where denial rested only on the rejected classification. The conversion of straight grade bitumen into blown grade bitumen is also stated not to amount to manufacture for excise purposes, following earlier Tribunal authority.

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Issues: (i) Whether the product "Bitufelt Type III Grade I" was classifiable under Chapter Heading 68.07 or Chapter Heading 59.09 of the Central Excise Tariff Act, 1985, and whether the exemption notifications were admissible; (ii) Whether the process of making blown grade bitumen out of straight grade bitumen amounted to manufacture.

Issue (i): Whether the product "Bitufelt Type III Grade I" was classifiable under Chapter Heading 68.07 or Chapter Heading 59.09 of the Central Excise Tariff Act, 1985, and whether the exemption notifications were admissible.

Analysis: The product was a bituminised hessian-based felt, and the governing classification principle required the tariff entry to be read in the context of the goods specifically enumerated in the heading. The Tribunal followed earlier authority holding that bituminised hessian based felt does not fall under Chapter Heading 68.07 and is properly classifiable under Chapter Heading 59.09. Once that classification was accepted, the denial of the notifications solely on the ground of classification could not survive.

Conclusion: The classification under Chapter Heading 68.07 was rejected, the product was held classifiable under Chapter Heading 59.09, and the benefit of Notification No. 53/65-C.E. dated 20-3-1965 was admissible, in favour of the assessee.

Issue (ii): Whether the process of making blown grade bitumen out of straight grade bitumen amounted to manufacture.

Analysis: The question was treated as already settled by earlier Tribunal decisions, which held that the conversion of straight grade bitumen into blown grade bitumen does not give rise to a different manufacturing result for excise purposes.

Conclusion: The process was held not to amount to manufacture, in favour of the assessee.

Final Conclusion: The impugned order was set aside and the appeals were allowed on merits, while the limitation objection was not adjudicated.

Ratio Decidendi: Bituminised hessian based felt is classifiable under Chapter Heading 59.09 and not under Chapter Heading 68.07, and the conversion of straight grade bitumen into blown grade bitumen does not amount to manufacture.

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