Back
2002 Supreme(SC) 633
2002(4) Supreme 325
SUPREME COURT OF INDIA
(From Customs Excise & Gold (Control) Appellate Tribunal, New Delhi)
S. Rajendra Babu & Mrs. Ruma Pal, JJ.
M/s. Speedway Rubber Co. -Appellants
versus
Commissioner, Central Excise, Chandigarh & Ors. -Respondents
Civil Appeal Nos. 4844-4846 of 1999
Decided on 7-5-2002
Counsel for the Parties :
For the Appellant : Sudhir Malhotra, Sanjeev Malhotra, Advocates.
For the Respondents : Mukul Rohatgi, Additional Solicitor General, M. Gauri Shanker Murthy, K.C. Kaushik and B. Krishna Prasad, Advocates.
IMPORTANT POINT
The impugned goods of the appellant would be classified under sub-heading 4008.21 and not under sub-heading 4016.99 as claimed by the Department to determine the rate of duty payable on the goods manufactured by the appellants under the Central Excise Tariff Act, 1985.
Headnote:Central Excise Tariff Act, 1985-Classification of procured tread i.e. vulcanized grooved material-Tariff item No. 4008.21 "plates, sheets and strips for resoling or repairing or retreading rubber tyres" and item No. 4016.99 "other articles of vulcanized rubber other than hard rubber"-Former item is "surface worked" and the later "further worked" on the surface of material-Whether the appellant manufacturer s process of placing the plates, sheets and strips in the dye and subjecting the save to pressing in the hydraulic press is in the nature of "surface working" or "further working" on the surface of material? (The former)-Result-It falls under tariff item 4008.21 as held by Collector and not under tariff item 4016.99 as held by Tribunal-Appeal allowed.
Held : To determine the nature of the impugned goods, the difference between "surface worked" and "further worked" is significant. `Surface working means working on the surface of the material. `Surface working may include coating, polishing, colouring, embossing, corrugating or even grooving when such grooving is only on the surface of the material. (Para 19)
We may notice that as per Rule 3(a) of the Interpretation Rules to Central Excise Tariff Act, 1985, "The heading which provides the most specific description shall be preferred to headings providing a more general description." Accordingly, the heading No. 40.08 provides more specific description to the impugned goods than heading No. 40.16 and hence, the specific entry should overrule the general entry. Moreover, the manufacturing process involved surface working of the types described above and does not include further working . This is evident from the interpretation of Note 9 of Chapter 40, that further working would envisage an activity other than those mentioned therein. Hence, on the basis of the aforesaid discussion, the impugned goods would be classified under sub-heading 4008.21 and not under sub-heading 4016.99 as claimed by the Department. Thus, these appeals stand allowed by setting aside the order of the Tribunal and restoring that of the Collector. (Paras 23, 24 and 25)
JUDGMENT
Rajendra Babu, J.-This is a statutory appeal by the appellants under Section 35L(a) and (b) of the Central Excises and Salt Act, 1944, against the judgment and order of the Custom, Excise and Gold (Control) Appellate Tribunal [hereinafter referred to as the Tribunal ] dated 30.12.1998. The dispute is over classification of the impugned goods under the Central Excise Tariff Act, 1985 [hereinafter referred to as the Act ], and determination of the rate of duty payable on the goods manufactured by the appellants. The duty demand is for the period between July 1989 to December 1989 prior to the 1990 budget.
2. The stand of the Department is that the impugned goods are classifiable under sub-heading 4016.99, prior to the 1990 budget. After the 1990 budget, they are classified under sub-heading 4008.21. The contention of the appellants is that the impugned goods were classifiable under sub-heading 4008.21 before the 1990 budget and even thereafter.
3. The impugned goods were cleared under sub-heading 4008.21 of the Act as per the approved classification under Rule 173B of the Central Excise Rules, 1944. In Classification List No. 34/89-90 dated 7.4.1989, impugned goods were claimed under sub-heading 4008.21, and were fully exempted from the excise duty vide notification No. 47/76 of the Central Excise dated 9.3.1976. This Classification List was duly approved without modification by the Assistant Collector, Central Excise, Jalandhar, by order dated 28.12.1989.
4. While the original Classification List No. 35/89-90 was pending, on account of the change of rate of duty qua ADV tyres, [14% ADV instead of specific rate of duty of Rs. 42 per tyre], the appellants submitted another Classification List No. 173/89-90 on 6.11.1989. The Department chose to approve the original Classification List No. 35/85-90 without any modifications. The original list was neither reviewed nor revoked.
5. Subsequently, the Superintendent, Central Excise, Range II, Jalandhar, on 2.2.90 vide show cause notice issued under C. No. CE-20/Demand/R.II/98/139, demanded duty of Rs. 5,57,300.99 for the period between July 1989 and December 1989 by classifying the goods under sub-heading 4016.99 of the Act.
6. On 30.3.1990, another show cause notice was issued under C.No.V-40(30) 12/Val/86/3566-67, by the Assistant Collector, Central Excise, Jalandhar, and the classification of the impugned goods in Classification List No. 173/89-90 was objected to, on the ground that Classification List No. 173/89-90 was effective retrospectively with effect from 1.4.1989.
7. In addition, another show cause notice dated 5.4.90 was issued under C.No.V-40(30)II/Val/96/3712-13, by the Assistant Collector, Central Excise, Jalandhar. The Classification List filed by the appellants effective from 22.9.1989 was also objected.
8. It is pertinent to mention that show cause notice for demand of duty was issued on 2.2.1990, whereas Classification List No. 173/89-90 was objected on 30.3.1990. The demand of duty was objected to on the following grounds :
1. It was without objecting to or in revocation of the original Classification List.
2. The period from July 1989 to 5.11.1989 was covered by the Original Classification List, which was duly approved by the Department.
3. Classification List No. 173/89-90 filed on 6.11.1989 could not be effective retrospectively with effect from 1.4.1989. It could only be effective with effect from 6.11.1989.
4. Demand for the above period was in contravention of Classification List No. 35/89-90 which was duly approved on 30.12.1989.
5. Clearance during the period 6.11.1989 to 12/1989 was covered by Classification List No. 173/89-90.
9. Therefore, the observations in this show cause notice dated 30.3.1990 with respect to Classification List No. 173/89-90 are contended to be factually incorrect.
10. The appellants filed on 25.5.1990 an interim reply to the show cause notice
