TaxTMI 
TaxTMI 
1992 (12) TMI 144
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.... content is less than 25% by weight Other: 4009.81 Designed for use in laboratories provided each piece is manufactured in length not exceeding three metres and has a base of a diameter not exceeding 1.27 cms. 4009.92 Designed to perform the function of conveying air, gas or liquid 4009.99 Other" "40.16 Other articles of vulcanised rubber other than hardened rubber Articles of materials of heading No. 40.08: 4016.11 Of cellular rubber 4016.19 Other Other : 4016.91 Floor coverings and mats, erasers, gaskets, washers and other seals, inflatable articles. 4016.99 Other." 2. The dispute about the classification of Rice Rubber Rolls arose out of claim of both the appellants for classification under sub-heading 4009.99 as Tubes, Pipes and hoses in their Classification Lists dated 5-5-1987. The Assistant Collector did not accept this claim, and, after issuing them a show cause notice and receiving their reply, decided as under :- "FINDINGS:- I observe that the rice rubber rolls are used for shelling the rice in the rice milling industry and are distinctly sold and know in the trade as 'Rice Rubber Rolls". Rice Rubber Rolls cannot be considered....
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....formed. Sometimes, rice rubber rolls of required length are manufactured by cutting to smaller length from bigger rolls. 6. Smt. Zutshi has, while presenting her case, relied upon the following decisions :- (a) Indo-International Industries v. Commissioner of Sales Tax, U.P. (para 4) 1981 (8) E.L.T. 325 (SC) (b) Dunlop India Ltd. & Madras Rubber Factory Ltd. v. Union of India & Others [1983 (13) E.L.T. 1566 (SC) (para 36)] (c) Union Carbide India Ltd. v. Union of India & Others [1986 (24) E.L.T. 169 (SC) (para 4)] (d) Atul Glass Industries Ltd. & Others v. Collector of Central Excise [1986 (25) E.L.T. 473 (SC) (paras 8 & 11)] (e) Brakes India Ltd. & Others v. Collector of Central Excise [1987 (31) E.L.T. 1030 (Tribunal) (para 222)] (f) Collector of Customs v. Bhor Industries Ltd. [1988 (35) E.L.T. 346 (SC) (para5)] (g) Collector of Central Excise, Kanpur v. Krishna Carbon Paper Co. [1988 (37) E.L.T. 480 (SC) (para 8)] (h) Inareo Ltd. v. Collector of Central Excise, Bombay [1987 (31) E.L.T. 469 = 1984 (Vol. IV) ECR 2164 (Tribunal)] (i) Solder Industries, Bombay v. Collector of Customs, Bombay [1988 (38) E.L.T. 529 = 1989 (13) ETR 440 (para 7)]. 7. Shri Sridharan, on the o....
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....preme Court judgment in the case of Atul Glass Industries Ltd. v. Collector of Central Excise [1986 (25) E.L.T. 473] cited by the learned CDR (para 8): "It is a matter of common experience that the identity of an article is associated with its primary function. It is only logical that it should be so. When a consumer buys an article, he buys it because it performs a specific function for him. There is a mental association in the mind of the consumer between the article and the need it supplies in his life. It is the functional character of the article which identifies it in his mind. In the case of a glass mirror the consumer recalls primarily the reflective function of the article more than anything else. It is a mirror, an article which reflects images." [Emphasis added] 10. Smt. Zutshi had also cited the decision of the Supreme Court in the case of Dunlop India Ltd. v. Union of India [1983 (13) E.L.T. 1566], which being a judgment delivered in 1975, is one of the earliest on the 'common parlance test. To quote para 36:- "36.....It is clear that meanings given to. articles in a fiscal statute must be as people in trade and commerce, conversant with the subject, generally trea....
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....d by the ISI are for ensuring quality control and have nothing to do with the class to which the goods belong in a Tariff Schedule. Considering the use to which the Properzi Rods are put they may have to meet a different and higher quality control than the ordinary wire rods. But, that does not mean that Properzi Rods are not comprehended within the expression 'wire rods'." [Emphasis added] 14. The strongest argument which the learned Counsel made in support of his contention was the reliance placed by him on the judgment of the Supreme Court in the case of Indian Metals & Ferro Alloys Ltd. v. Collector of Central Excise [1991 (51) E.L.T. 165] about the classification of poles for transmission of electric energy in which the Apex Court held that, considering the wide scope of Item 26AA(iv), such poles were classifiable as pipes. The question was one of classification between items 26AA(iv) and the residuary Item 68 of the erstwhile Central Excise Tariff. To appreciate the point, it is necessary to look at the tariff item:- "26AA IRON OR STEEL PRODUCTS, THE FOLLOWING NAMELY: (i) .......... (ii) .......... (iii) .......... (iv) Pipes and tubes (including blanks thereof) all sor....
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.... are commercially distinct commodities is merely based on their being called 'poles'. They are also available in the same market in which normally pipes and tubes are otherwise available. Neither the circumstance that certain processes are applied to the "mother" pipes or tubes nor the fact that, in order to identify the particular type of tube or pipe one needs, one may use different names is sufficient to treat me article as a commercially different commodity: See Indian Aluminium Cables Ltd. v. Union -1985 (21)'E.L.T. 3 (SC) = 1985 (3) SCC 284 followed and applied in Bharat Forge & Press Industries v. C.C.E. -1990 (45) E.L.T. 525 (SC) = 1990 (1) SCC 532" 16. On a careful consideration of all the contentions raised before us we agree with the learned CDR that the matter must be decided on the basis of the common parlance test which has all along been upheld by the Supreme Court as the basic criterion for determining the classification of goods for purposes of the customs and central excise tariffs. We cannot go by the only fact that two different ISI specifications are in existence for Rice Rubber Rolls and Rubber Tubing for General Purposes. As between the specific sub-heading ....
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....gh they may resemble their shape. That the shape of an article alone cannot be a sure guide for determining its classification can be seen from the fact that a "tube light", though made of glass and having the shape of tube is not classifiable as a "glass tube" but as 'light' or 'lamp' because of its quality or function of providing illumination. It is therefore clear that "Rice Rubber Rolls" are a distinct commercial commodity - different from rubber pipes and tubes and have a distinct name, character and use different from that of rubber pipes, tubes and hoses. At this place we may also refer to the decision of the Supreme Court in the case of Bharat Forge & Press Industries (Pvt.) Ltd. v. Collector of Central Excise relied upon by the learned Counsel. The things which the Apex Court found to be common between pipes fittings on the one hand and pipes on the other, do not exist in the case of Rice Rubber Rolls and Pipes/tubes and hoses. 19. Once we have come to the conclusion that the subject goods do not answer the description of Heading 40.09, we have to examine whether they can be covered by any other Heading in Chapter 40 which specifically answers to their description before....
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....n parlance would require is that if an ordinary person or trader conversant with electrical articles is asked whether an electric iron is a "domestic electrical appliance", he should be able to answer with conviction that it is .... Therefore, in applying the test of common parlance, the question is not whether the article under consideration is ordinarily referred to in the words of the tariff description, but rather whether according to common understanding it would be covered by the wording of the tariff description....." 22. In paragraph 17, we have, while distinguishing the judgment of the Supreme Court in Indian Metal & Ferro Alloys v. Collector of Central Excise (supra), seen how Rice Rubber Rolls do not answer the description of pipes, tubes and hoses in Heading 40.09. It has been the department's case from the very beginning that the subject goods are not known in the common parlance as pipes, tubes and hoses; nor are they marketed by the respondents themselves by that name. It is clear that according to common understanding Rice Rubber Rolls would not be covered by the Tariff description "pipes, tubes and hoses". The learned CDR had, in this connection also relied upon t....
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....rned Chief Departmental Representative has also placed a large number of judgments before us in support of the 'common parlance test'. We do not, therefore, consider any substance in the argument of the learned counsel. 26. One other point which Shri Sridharan had taken up during his arguments is the mention by the Assistant Collector in his order that pipes and tubes are generally used for conveying air, gas or liquid and Rice Rubber Rolls do not perform such a function. We do not think that one can find fault with this general statement which is also strengthened by a specific sub-heading of such pipes and tubes in the tariff itself. Here, again the Assistant Collector has only mentioned a general fact but has not decided the classification of the subject goods on this criterion alone - the main argument being one of how they are known and marketed. 27. This also brings us to the question of availability of exemption to the subject goods under Notification No. 197/67-C.E., dated 29-8-1967 as amended. While setting aside the order of the Assistant Collector, Collector (Appeals) had allowed the benefit of exemption under the notification by accepting the claim that the subject go....
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....onverted in the factory of their production into component parts of machinery articles. Such being not the case, we consider that the subject goods do not qualify for exemption under Serial No. 3 of the Table appended to Notification No. 197/67 as claimed by the learned Counsel. 29. Shri Sridharan had placed reliance on the decision of the Bombay High Court in the case of Precision Rubber Industries v. Collector of Central Excise [1990 (49) E.L.T. 170], in support of his stand that like aprons and cots. Rubber Rolls are also component parts of machinery and were entitled to the exemption. Paragraph 4 of this judgment which is relevant for our purposes is as under :- "4. It is undisputed that the Petitioners manufactured in their factory at Thane, rubber pipes and tubes which are cut into smaller parts known as aprons and cots. The process consists manufacturing long rubber pipes/tubes and then cutting small pieces out of them only in such a manner that their cylindrical character is always retained. The aprons and cots come into existence upon the cutting of the larger tubes/pipes into small cylindrical pieces known as aprons/cots. The aprons and cots are components or textile ma....