1986 (6) TMI 157 - AT - Central Excise

Tribunal clarifies classification of non-automotive gaskets under Central Excise Tariff

COLLECTOR OF CENTRAL EXCISE, MADRAS Versus IPG. ENGINEERS (P) LTD.

COLLECTOR OF CENTRAL EXCISE, MADRAS Versus IPG. ENGINEERS (P) LTD. - 1986 (25) E.L.T. 451 (Tribunal) Issues:Classification of non-automotive gaskets under Central Excise Tariff (CET) - Item No. 22F or Item No. 68 CET.Analysis:The case involved a dispute regarding the classification of non-automotive gaskets manufactured by a company under the Central Excise Tariff. The company, engaged in producing gaskets from compressed asbestos jointing sheets, had initially paid duty under item No. 68 CET but was later asked to reclassify the gaskets under item No. 22F by the Assistant Collector. The Assistant Collector argued that the gaskets constituted new articles with distinct characteristics and uses, thus falling under item No. 22F. The Appellate Collector, however, classified the gaskets under item No. 68 CET. The Central Government intervened, issuing a notice to reconsider the classification based on the interpretation of the tariff description. The main argument revolved around whether the gaskets, manufactured from cutting sheets into different sizes and shapes, should be classified under item No. 22F or item No. 68 CET.The respondents contended that the gaskets should not be liable to duty again under item No. 22F, while the Department argued that the gaskets fell under item No. 22F and were chargeable to duty. The Department's interpretation included products made from manufactures of fibre and yarn, covering all asbestos manufactures under item No. 22F(iv). Reference was made to a Delhi High Court judgment regarding the definition of 'manufacture' under the Act. The respondents argued against double taxation and maintained that the gaskets should remain classified under item No. 68 CET.The Tribunal analyzed previous decisions related to the classification of similar products under the Central Excise Tariff. It differentiated between goods directly manufactured from fibre or yarn and goods manufactured from previously manufactured articles. The Tribunal concluded that the gaskets, not directly resulting from fibre or yarn but made from asbestos sheets, should be classified under item No. 68 CET. The judgment emphasized the significance of the phrase 'manufactures therefrom' in the tariff entry, indicating that direct manufacturing from fibre or yarn was essential for classification under item No. 22F.In light of the arguments presented and the interpretation of relevant legal provisions, the Tribunal upheld the impugned order, dismissing the appeal and discharging the show cause notice. The judgment clarified the classification of non-automotive gaskets under the Central Excise Tariff, settling the dispute between the parties.