1992 (1) TMI 218 - AT - Central Excise

Tribunal upholds product classification under Item 16A(2) but grants exemption under Notification 47/76-C.E.

ELGI TYRE & TREAD LTD. Versus COLLECTOR OF CENTRAL EXCISE

The Tribunal upheld the classification of the product under Item 16A(2) of the Central Excise Tariff but allowed the appeal for exemption under ... Classification Issues Involved:1. Classification of vulcanized, hardened, precured tread rubber.2. Eligibility for exemption under Notification 47/76-C.E., dated 9-3-1976 as amended by Notification 193/80-C.E., dated 8-12-1980.3. Interpretation of the term 'non-curing' in the context of the exemption notification.Detailed Analysis:Issue 1: Classification of Vulcanized, Hardened, Precured Tread RubberThe appellants argued that the subject product should be classified under Item 68 of the erstwhile Central Excise Tariff, rather than Item 16A(2). They contended that the product is not in the form of plates, sheets, and strips as contemplated under Item 16A(2) and that it is a hardened rubber product. The lower authorities, however, classified it under Item 16A(2) and did not consider the product to be hardened rubber.The Tribunal examined the manufacturing process and the chemical composition of the product. The appellants presented a detailed flow chart explaining the process, which included blending natural and synthetic rubber with various additives, followed by vulcanization and hardening in a hydraulic press. Despite these arguments, the Tribunal concluded that the product was indeed in the form of sheets, as evidenced by the term 'sheeted out' used in the appellants' own flow chart. The Tribunal held that the word 'sheet' is broad enough to include grooved sheets and, therefore, agreed with the lower authorities that the product falls under Item 16A(2).Issue 2: Eligibility for Exemption under Notification 47/76-C.E.The appellants claimed that if the product is classified under Item 16A(2), it should be eligible for exemption from duty under Notification 47/76-C.E., as amended. The lower authorities had denied this exemption, interpreting the term 'non-curing' to mean that the product should not be cured.The Tribunal considered the appellants' argument that 'non-curing' refers to products that do not require any further curing after vulcanization. The appellants cited various authoritative sources to support their interpretation that vulcanization and curing are synonymous terms. The Tribunal found this interpretation plausible, especially considering the explanation from the Rubber Research Institute of India, which stated that 'non-curing' means a product that does not require further curing.Issue 3: Interpretation of 'Non-Curing'The lower authorities interpreted 'non-curing' as products that are not cured, while the appellants argued that it means products that do not require further curing. The Tribunal analyzed the grammatical and contextual usage of the term in the exemption notification. It concluded that 'non-curing' should be interpreted as referring to products that do not need any further curing after vulcanization. This interpretation aligns with the explanation provided by the Rubber Research Institute of India and ensures that no words in the notification are rendered redundant.ConclusionThe Tribunal upheld the classification of the product under Item 16A(2) of the erstwhile Central Excise Tariff. However, it allowed the appeal regarding the exemption, concluding that the product is eligible for exemption under Notification 47/76-C.E., as amended, because it is a vulcanized rubber product that does not require further curing. The orders of the lower authorities were set aside, and the appeal was allowed with consequential relief, if any.