M. Santhanam Member (J)

1. The Revenue has filed this appeal against the order-in-appeal dated 26.8.1982, passed by the Appellate Collector, Central Excise, Madras.

2. The respondents manufacture inter alia latex foam sponge into specific shapes and sizes as per consumers specifications and clear them from their factory. The latex foam sponge obtained in specific shapes and sizes have been described as "bus seats" and "scooter seats" and classified under TI 16A(1). Subsequently, the respondents filed a classification 6.2/81/82, dated 25.1.1982 wherein they stated to have classified the latex foam sponge described as "bus seats" and "scooter seats" as motor vehicle parts non-specified falling under T.I. 68 of the C.E.T. The Assistant Collector rejected the assessees claim and classified the goods under TI 16A(1).

3. The respondents preferred an appeal and the Appellate Collector under the impugned order held that the articles should be classified under T.L 68. He was of the view that the respondents manufacture such cushions to a shape and quality depending upon the actual use. He was also of the view that the unfinished product was capable of being used only as seat cushion. He classified them as parts of motor vehicles.

4. Smt. Dolly Saxena, SDR urged that in order to become identifiable motor vehicle parts, namely, bus seats and scooter seats latex foam sponge manufactured and cleared by the respondents had to be covered with a leather or rexine wrapper, before it can be used as such. She, therefore, urged that the products should be classified under T.L 16A(1).

5. Shri M. Chandrasekharan, learned counsel for the respondents urged that the functional use of the products has also to be taken into consideration for the purpose of assessment. He placed reliance on the ruling reported in M/s. Atul Glass Factory v. U.O.I, Others [1986 (25) ELT W3 (S.C.)]. He stated that the persons in the trade identified the product as bus seats and scooter seats and have placed orders, not, for sponge but for bus seats, scooter seats etc.

6. The point for decision in this appeal is whether the products in dispute be classified under TI 16A(1) or under T.I. 68. Item 16A(1) of the C.E.T. prior to 1.3.1982 read as "latex foam sponge". After L3.1982 also, the item read as "latex foam' sponge". The explanation to the item includes articles made of latex foam sponge. The goods were cleared as "latex foam sponge" in specific shapes and sizes both before and after 1.3.1982. The Appellate Collector was of the view that latex foam sponge in specific shapes and sizes are classifiable as motor vehicle parts under TI/34A prior to 1.3.1979 and under TI 68 as non-specified motor vehicle parts after 1.3.1979. The process of manufacture has been set out by the respondents as follows :

"Latex cushions are made by frothing 60% centrifuged liquid latex by mechanical whipping, after adding necessary frothing chemicals. This whipping is carried out in metal bowls and using wires whisks. Different chemicals required for vulcanisation and improved ageing qualities are also added before whipping. When the frothed latex reached the desired volume, a delayed action gelling agent is added and thoroughly mixed. At this stage when the froth is still liquid, the same is transferred to aluminium moulds, which is to give the desired shape of the article produced. Then the liquid corn-pound starts setting gradually inside the mould.

The next stage of vulcanisation. For this once the gelling is over, the moulds containing the gelled froth are kept under steam heating. After heating the moulds for the required time, they are opened and the vulcanised cushions are stripped and washed in water. The washed cushions are squeezed in rollers and then fed into drying chambers. After drying, the cushions are trimmed, inspected and kept for despatch."

It is seen from the above process that frothed latex is transferred to aluminium moulds to give a desired shape of the article. The frothen l