TaxTMI 
TaxTMI 
2005 (1) TMI 110
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....Cord Fabric. The Dip solution consists of chemicals. After dipping, the Tyre Cord Fabric is heat stretched and lifted to a height of 15 ft. by small rollers through heat chambers and then brought down for calendering, which is the second stage of the process. Twelve show cause notices were issued to M/s. M.R.F. Ltd. by the Commissioner of Central Excise, Goa under which additional duty of excise was demanded on the ground that the assessee was manufacturing an excisable product, namely, Dipped Tyre Cord Fabric, falling under Tariff Heading 59.02. 3.By common written reply, the assessee contended that they did not manufacture Dipped Tyre Cord Fabric; that they manufacture only tyres; that in the course of manufacture of tyres, they use Grey Tyre Cord Fabric as a reinforcing material and before it is so used, the Grey Tyre Cord Fabric is dipped in a solution of Latex and thereafter rubberised on both sides. It was submitted that no manufacture is involved as the Dipped Tyre Cord Fabric is sticky to touch. It was further submitted that the Dipped Tyre Cord Fabric was not marketable. 4.The main question before the Commissioner (Adjudication) was - whether the assessee was liable ....
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....he judgments in Falcon Tyres Limited v. Collector of Central Excise, Bangalore reported in [1996 (88) E.L.T. 450] and Vikrant Tyres Limited v. Collector of Central Excise, Bangalore reported in [1997 (90) E.L.T. 178], allowed the assessee's appeals, holding Rubberised Dipped Tyre Cord Fabric as a product falling under Tariff Heading 59.05 (now 59.06). 7.Being aggrieved, the department has come to this Court against the three orders passed by the Commissioner, Goa dated 20-2-1998, 31-10-1997 and 15-12-1997. 8.Mr. R. Mohan learned Additional Solicitor General submitted that Grey Tyre Cord Fabric (base fabric) after dipping was classifiable under Tariff Heading 59.02 as Processed Tyre Fabric. He further submitted that in terms of Tariff Heading 59.06, Rubberised Textile Fabric other than those falling under Tariff Heading 59.02 alone would fall under Heading 59.06. He submitted that because of this exclusion, Dipped Tyre Cord Fabric would fall under Tariff Heading 59.02 which referred to Tyre Cord Fabrics of High Tenacity Yarn. In this connection, learned Counsel for the department placed reliance on the description of the product under HSN Heading 59.02 read with the Note appen....
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....ed that Dipped Tyre Cord Fabric was classifiable under Chapter Heading 59.06 of Central Excise Tariff Act, 1985, as held in Falcon Tyres (supra) and Vikrant Tyres (supra). 10.Mr. Nariman further submitted that the burden was on the department to prove that Dipped Tyre Cord Fabric was an independent product both in terms of manufacture and marketability. He submitted that no such finding has been recorded by the Commissioner (Adjudication). 11.In order to appreciate the rival contentions, we quote herein below the relevant provisions : Headings 59.02 and 59.06 of 1985 Act"I. : Heading No. Description of Goods 59.02 Tyre cord fabric of high tenacity yarn of nylon or other polyamides polyesters or viscose rayon. 59.06 Rubberised textile fabrics, other than those of Heading No. 59.02. Heading 59.02 of HSN : II. Heading No. Description of Goods 59.02 Tyre Cord Fabric of High Tenacity Yarn of Nylon or other Polyamides Polyesters or Viscose Rayon. This heading covers tyre cord fabric, whether or not dipped or impregnated with rubber or plastics. III. Note-4 of Section-XI - Textiles and Textile Articles : For the purposes of this Section, ....
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....milarly, one has to keep in mind the specifications given under Note-4 to Section XI, which defines "High Tenacity Yarn". If the product in question, namely, Dipped Tyre Cord Fabric comes within the specifications prescribed in Note-4 to Section XI, then the product may fall under Chapter Heading 59.02. We may further point out that the classification of Dipped Tyre Cord Fabric was not in issue in any of the earlier judgments, referred to above. The Tribunal was wrong in equating Dipped Tyre Cord Fabric with Rubberised Tyre Cord Fabric. The judgments in Falcon Tyres (supra) and Vikrant Tyres (supra) dealt with classification of Rubberised Tyre Cord Fabric with reference to Chapter Heading 40.05 vis-a-vis Chapter Heading 59.05 (now 59.06). Therefore, the abovementioned prior judgments have no application to the controversy in hand. Lastly, the Tribunal has not examined the scope of HSN Heading 59.02. Moreover, the Adjudicating Authority has not examined the matter in the light of Note-4 to Chapter-59. It has not examined the problem in the context of Note-4 to Section XI and there is no evidence of marketability of Dipped Tyre Cord Fabric. Although, the adjudication order is a well ....