D.C. Mandal, Member (T)

1. The question to be decided in this appeal is whether the respondents' rubber products bus seats, car seats, scooter seats and motor cycle seats are correctly classifiable under Item 16A(1) of C.E.T. as latex foam sponge or under Item 34-A as motor vehicle parts.

2. The facts of the case, in brief, as stated in the order-in-original No. C.No. V/16A/3/22/80, dated 28.2.81 passed by the Assistant Collector of Central Excise, Bangalore and also stated by the learned Advocate and the learned J.D.R. during the hearing before us, are that the respondents are manufacturers of latex foam sponge articles falling under Central Excise Tariff Item 16A(1). They manufacture rubber products, viz. pillows, cavity sheetings, sofa cushions, chair cushions, cinema seat cushions, scooter seats, motor cycle seats, bus seats, car seats etc. They were filing classification lists from time to time in respect of all the products manufactured by them under Item 16A(1) of the Central Excise Tariff and the same were approved by the proper officer of Central Excise. The Company filed two revised classification lists No. 5/80 and 6/80 both dated 9.4.1980 seeking classification of the scooter/motor cycle/car/bus seats as motor vehicle parts under Tariff Item 34-A for the period from 29-5-1971 to 10-5-1979 and under Item 68 of the Central Excise Tariff for the period from 11-5-1979. Prior to this, they classified these products under Tariff Item 16A(1) and paid Central Excise duty under that Tariff Item without raising any protest. As the scooter/motor cycles/bus/car seats are primarily rubber products classifiable under Tariff Item 16A, and the Tariff Item 68 is a residuary Item, which will attract only if the products are not classifiable under any other Tariff Item, the Company was informed by the Assistant Collector of Central Excise vide his letter C.No. V/16A/3/22/80 dated 29-7-1980 that the said goods were correctly classified under Tariff Item 16A in the earlier classification lists and the said goods could not be reclassified as contended by them. In their letter No. MR-CE/1170/80, dated 11-8-1980, the respondents requested for an appealable order after giving them an opportunity to present their case. A show cause notice was, therefore, issued by the Assistant Collector of Central Excise on 10-9-1980 asking them to show cause why the said products should not be classified under Tariff Item 16-A as done earlier and their request for reclassification as in the aforesaid two classification lists should not be rejected. After considering their reply to the Show Cause Notice and after giving them personal hearing the Assistant Collector of Central Excise held as follows :-

"9. There is no dispute to the effect that these seats are made out of Latex Foam Sponge in the shape of seats etc., in different sizes or thickness. Tariff Item 16-A clearly specifies Latex Foam Sponge and when this is manufactured it has to be in some shape or other. It is also not doubted that even though the articles have peculiar shapes and designs they are not capable of being used straight away as Motor Vehicle Parts in the form of seats, unless further finishing is done in the form of fixing covers etc. Hence, what has been manufactured is distinctly an article made out of Latex Foam Sponge.

ORDER

In view of the above, I hold that the product in question should be classifiable under Tariff Item No. 16-A of the Central Excise Tariff."

Being aggrieved of the aforesaid order of the Assistant Collector, the respondents filed an appeal before the Appellate Collector of Central Excise, Madras. In his impugned order, the Appellate Collector followed his earlier orders wherein he held that such seat cushions were classifiable under Item 34-A of the Central Excise Tariff as motor vehicle parts and allowed the appeal of the respondents herein.

In exercise of the power conferred on the Central Government under Section 36(2) of the Central Excises and Salt Act, as