1993 (9) TMI 252 - AT - Central Excise

Tribunal classifies reclaimed rubber as raw material, not rubber product, under Tariff Item 68

COLLECTOR OF CENTRAL EXCISE, COIMBATORE Versus SUPER RUBBER WORKS

The Tribunal held that reclaimed rubber should be classified under Tariff Item 68 instead of Tariff Item 16A of the Central Excise Tariff. The decision ... Classification Issues Involved:1. Classification of reclaimed rubber under Tariff Item 16A or Tariff Item 68 of the erstwhile Central Excise Tariff.2. Adequacy of opportunity provided to respondents to contest the examiner's report.3. Applicability of the Tribunal's previous decision in the case of Bharat Rubber Regenerating Co. Ltd.4. Distinction between raw material and rubber product for classification purposes.Detailed Analysis:1. Classification of Reclaimed Rubber:The main issue in this appeal is whether reclaimed rubber manufactured by the respondents should be classified under Tariff Item 16A or Tariff Item 68 of the erstwhile Central Excise Tariff. The Assistant Collector of Central Excise, Coimbatore, classified the item under Tariff Item 68 in his order dated 22-3-1982. However, the Collector (Appeals), Madras, set aside this order and classified the goods under Tariff Item 16A. The Tribunal initially reversed the Collector (Appeals)' decision and classified the item under Tariff Item 68. The Madras High Court quashed this Tribunal order and directed the Tribunal to reconsider after providing sufficient opportunity to the respondents.2. Adequacy of Opportunity to Contest Examiner's Report:The High Court highlighted two grounds for remanding the case back to the Tribunal: First, the examiner's report, which was relied upon by the Tribunal, was not provided to the respondents, depriving them of the opportunity to contest it. Second, the Tribunal relied on the previous order in the case of Bharat Rubber Regenerating Co. Ltd. without allowing the respondents to distinguish their case from it.3. Applicability of Bharat Rubber Regenerating Co. Ltd. Decision:The respondents argued that the process of manufacturing reclaimed rubber in their case is distinguishable from the process in the Bharat Rubber Regenerating Co. Ltd. case. They contended that the reclaimed rubber in their case is a composite product, not merely a raw material. The Tribunal had previously held in Bharat Rubber Regenerating Co. Ltd. that reclaimed rubber sheets are raw material, not a product made out of rubber, and thus should be classified under Item 68.4. Distinction Between Raw Material and Rubber Product:The Tribunal examined whether the reclaimed rubber should be considered a rubber product under Tariff Item 16A or a raw material under Tariff Item 68. The definition of reclaimed rubber from 'Rubber Technology' by Maurice Morton was considered, which describes reclaimed rubber as a product resulting from the treatment of vulcanized scrap rubber, used as a raw material in manufacturing rubber goods. The Tribunal concluded that reclaimed rubber in the form of sheets is not a product made out of rubber but a rubber raw material, thus classifiable under Item 68.Conclusion:The Tribunal, concurring with the Departmental Representative's arguments, held that reclaimed rubber in any form is not classifiable under Tariff Item 16A but under Item 68 of the erstwhile tariff. The appeal filed by the Department was allowed. The Tribunal also noted that the decision in the case of Rubber Reclaim Co. was passed sub silentio, without considering the critical point addressed in Bharat Rubber Regenerating Co. Ltd. The Tribunal emphasized that for classification under Item 16A, the goods must be a rubber product, not merely in the form of plates, sheets, and strips. The appeal was thus decided in favor of the Department, classifying the reclaimed rubber under Item 68.