TaxTMI 
TaxTMI 
TaxTMI 
2024 (2) TMI 1303
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....again impugning the same order for having dropped proceedings proposed in notices that were disposed off together. The appellant-assessees were in the business of manufacturing articles of rubber which they claimed to be in conformity with description corresponding to tariff item 4008 1910 and 4008 2110 and chargeable to 'nil' rate of duty therein, and to tariff item 4008 1110 and 4008 1990 of Schedule to Central Excise Tariff Act, 1985 of which the former was entitled to exemption, at serial no. 39, in notification no. 3/2005-CE dated 24th February 2005 and the latter, as the sole dutiable goods, cleared by resort to notification no. 8/2003-CE dated 1st March 2003 which, through threshold and slab exemptions, was intended for incentivizing 'small scale industry (SSI)' units. M/s Konark Rubbers, the respondent-assessee and also in the business of manufacturing articles of rubber, had been clearing goods on payment of duties applicable to tariff item in Schedule to Central Excise Tariff Act, 1985. 2. The culmination in the impugned order that is of grievance to the assessees is the fastening of duty liability of Rs. 4,57,09,954, comprised - as Rs. 2,64,32,615 of M/s Sewa Polymers f....
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.... entailed upon the other two products. In all, the proceedings against appellant-assessees, who had also been charged with contriving disaggregation of factories for availing the benefits flowing from notification no. 8/2003-CE dated 1st March 2003 to be neutralized by clubbing, proposed re-classification against tariff item 3921 1900 of Schedule to Central Excise Tariff Act, 1985 rendering them ineligible to 'nil' rate of duty on two of the products, to exemption extended by notification no. 3/2005-CE dated 24th February 2005 availed for one product and ineligible to exclusion from levy in exemption intended for 'small scale industry (SSI) units. Insofar as M/s Konark Rubber was concerned, the goods cleared by them at rate of duty prescribed for goods conforming to description corresponding to tariff item 4008 1110 of Schedule to Central Excise Tariff Act, 1985 was sought to be re-classified against tariff item 4008 1190 of Schedule to Central Excise Tariff Act, 1985. 4. Insofar as the classification dispute is concerned, the impugned order has relied upon composition of goods, inferred from deployment of inputs conducive not as much to elasticity, a characteristic of rubber, as ....
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....ral influence on the exercise. Such disputes are resolved in accordance with the statutory rules and, '3. It is not in dispute before us as it cannot be, that onus of establishing that the said rings fell within Item No. 22-F lay upon the Revenue. The Revenue led no evidence. The onus was not discharged. Assuming therefore, the Tribunal was right in rejecting the evidence that was produced on behalf of the appellants, the appeal should, nonetheless, have been allowed.' as held by the Hon'ble Supreme Court in Hindustan in Hindustan Ferodo Ltd v. Commissioner of Central Excise, Bombay [(1997) 2 SC 677] and '28. This apart, classification of goods is a matter relating to chargeability and the burden of proof is squarely upon the Revenue. If the Department intends to classify the goods under a particular heading or sub- heading different from that claimed by the assessee, the Department has to adduce proper evidence and discharge the burden of proof. In the present case the said burden has not been discharged at all by the Revenue......' in HPL Chemicals v. Commissioner of Central Excise, Chandigarh [2006 (197) ELT 324 (SC)]. 8. The impugned order is claimed to be sustainable on....
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.... combination of LDPE and Rubber. In column 4, figures in bracket denote ratio of quantity of rubber and LDPE in the formulations. From this table, it is evident that 103 formulations are of LDPE only and use of rubber is not made at all. However, as stated earlier, in all the sales invoices issued by these entities, description of goods is mentioned as Microcellular rubber sheet only though rubber is not used in these formulations. Here it is pertinent to mention that during recording of his statement dated 06.06.2012, Shri Pawan Kumar Agarwal had categorically answered in reply to question No.7 that "since other than M/s. Konark Rubber, our major ingredient is LDPE/Plastic, vulcanization with sulphur cannot be done. However we are using Sulphur as Vulcaniser in M/s. Konark Rubber............' We find extensive discussions on the classification claimed by the assessees which is not in accord with prescription supra in terms of which comparison between adopted and proposed classification is warranted only upon discharge of onus as laid down in judgement of the Hon'ble Supreme Court. In the absence of any exposition of description corresponding to the proposed classification, it is ....
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....ugned tariff item, the adjudicating authority has eliminated 'styrene', 'vinyl chloride' impliedly. On the other hand, it is not in dispute that the impugned order avowedly accepts that the principal ingredients are 'rubber' and 'low density polyethylene (LDPE) in varying proportions and that the ascertainment of content has been made only at the conclusion of production. The placement of the goods covered by 'plastics' and 'rubber', with added matrix of 'synthetic rubber' in the latter renders the distinction between the two categories to be literally 'touch and go' save when the distinguishment is available in the schedule itself. We find no reference in the adjudication order to the Explanatory Notes to the Harmonized System of Nomenclature (HSN) that may have been gainfully adverted to in the light of the technical contentions and test reports furnished by the noticees. 11. Though there is elaborate discussion on the purported evidence, such as formulation found in private records, admission in statements that these reflected reality and samples sent for testing, the key to the findings are the reports of tests from Deputy Chief Chemist, Vadodara on the composition of the 'end....