ORDER
Jyoti Balasundaram, Member (J)
1. The issue for decision in this appeal is the classification of Permaline Hose Pipe – whether under Heading 59.07/sub-heading 5907.00 or under Heading 40.09 sub-heading 4009.92 of the Schedule to the Central Excise Tariff Act, 1985.
2. The appellants, a composite textile mill owned by M/s Indian Rayon and Industries Limited, commenced manufacture of a new product called Permaline Fire Hose (Synthetic) of different sizes in 1987. They filed the classification lists in respect of these products claiming classification under Heading 59.07 chargeable to duty at the rate of 12% ad valorem. The Assistant Collector of Central Excise issued a show cause notice dated 9-11-1987 seeking to classify such hose pipes under Chapter 40 and more par ticularly under sub-heading 4009.92, chargeable to duty at the rate of 30% ad valorem. The show cause notice was issued on the basis of the allegation that rubber compound being 76.1% by weight of the total content and the products being hose pipes, were liable to classification accordingly.
3. By order dated 15-4-1988, the Assistant Collector classified the product under Heading 4009.92 which was upheld in appeal by the Collector of Central Excise (Appeals), Calcutta on 3-10-1988. It is against this order of the Collector (Appeals), that the appellants have preferred the present appeal.
4. We have heard Shri D.A. Dave, learned Advocate for the appellants and Shri V. Chandrasekharan, learned SDR for the Department.
5. The process of manufacture of the product in question is as follows :-
“In the first stage of manufacture, the jacket is woven on circular looms from Synthetic Filament Yarn which are used in warp and weft. This synthetic jacket so manufactured is in circular form but is not capable of performing the functions of a fire hose. Such jacket is not in fully manufactured condition.
In the second stage, the synthetic jacket so woven is passed through an extruder machine where rubber/PVC composition is impregnated on the inner and outer side of the jacket. Thereafter, the jacket is subjected to steaming with a view to setting the rubber/PVC compound on the jacket. It is at this stage that the fire hose ready for use is fully manufactured and ready for use.”
6. From the process of manufacture it is seen that a synthetic jacket is manufactured in the first instance which is impregnated with rubber/PVC compound on the inner and outer side. Even after application of rubber coating on both sides of the synthetic jacket, fire hose retains its essential characteristic of textile hose pipe. The Chemical Examiner’s Report dated 25-3-1987 states that the sample is received in cut piece of red coloured hose pipe having width of 9.9 c.mtr. In the construction of fabric synthetic filament yarn of polyester has been used in one direction and synthetic filament yarn of polymine (nylon) has been used on the other direction. Rubber compound is coaled on both sides of the fabric portion. The composition of sample is :
1. Percentage of film 12.5 by weight
2. Synthetic Polyester (Nylon) filament yarn 11.47
3. Rest is rubber compound unhardened and vulcanised.
Thus, the report clearly establishes that the product consisted of synthetic hose pipe rubberised on both sides of the fabric.
7. For the purpose of appreciating the dispute involved in this appeal, it will be useful to set out the conflicting tariff entries :-
40.09 Tubes, pipes and hoses of vulcanised rubber, other than hard rubber,
with or without their fittings (for example, joints, elbows, flanges)
4009.92 Designed to perform the function of conveying air, gas or liquid
59.07 Textile hosepiping and similar textile tubing, with or without lining,
armour accessories of other materials.
8. From a reading of Heading 40.09 it is seen that the products falling under this heading must be rubber products. The heading covers tubes, pipes and hoses of vulcanised rubber other than hard rubber and vulcanised rubber tubes, pipes and hoses including hose pipes, reinforced by stratification consisting of for example, one or more plies of textile fabrics or one or more layers of parallelised textile threads, or metal threads, embedded in the rubber. Such tubes, pipes and hoses may also be covered with a sheath of thin fabric or with gimped or plaited textile yarn. They may also incorporate an internal or external spiral of wire. The heading excludes tubes, pipes and hoses of textile materials, which have been water-proofed with an internal coating of rubber latex or into which a separate rubber sheath has been inserted. Such articles fall under Heading 59.09.
9. The product in dispute in this appeal is not a tube or pipe or hose of rubber but it is a textile tube coated on both sides with rubber. The report of the Chemical Examiner shows that Permaline Fire Hose is fabric of synthetic yarn woven on circular looms on which rubber compound was coated on both sides of the fabric. All the goods covered under Heading 40.01 to 40.17 are either rubber or products thereof except goods falling under Heading 40.10 where, in view of Chapter Note 8 conveyor or transmission belts or belting of textile fabric impregnated, coated, covered etc. with rubber are included. Heading 40.09 excludes tubes and hoses which have been waterproofed with rubber, as such article falls under 59.09.
10. From the above discussion it is clear that Permaline Fire Hose manufactured by the appellants is squarely outside the purview of Heading 40.09.
11. Turning to Heading 59.07 it covers hosepiping i.e. fire hose and similar tubing of textile material of a kind used for passage of fluids. It is usually made of heavy, closely woven fabric of cotton, linen, hemp or man-made fibres, woven or sewn in tubular form and may or may not be coated or impregnated with oil, tar or chemical preparations. Textile tubing is also classified under this heading if coated on the inside with rubber or plastics, armoured with metal or fitted with non-textile accessories. Chapter 59
covers products which are components of textiles with other materials and if any product under Chapter 59 contains material other than textiles, still the classification of such product does not fall outside the Chapter.
12. Even as per the Explanatory Notes to Harmonised Commodity Description and Coding System Permaline Fire Hose is classifiable under Heading 59.07 of the Schedule to the Tariff Act. Heading 59.09 of the HSN corresponding to Heading 59.07 of the Schedule to the Central Excise Tariff Act reads as follows :-
59.09 TEXTILE HOSE PIPING AND SIMILAR TEXTILE TUBING, WITH OR WITHOUT LINING, ARMOUR OR ACCESSORIES OF OTHER MATERIALS:
This heading covers hosepiping e.g. fire hose and similar tubing of textile material of a kind used for the passage of fluids. It is usually made of heavy, closely woven fabric of cotton, linen, hemp or man-made fibres, woven or sewn in tubular form, and may or may not be coated or impregnated with oil, tar or chemical preparations. Textile tubing is also classified here if coated on the inside with rubber or plastics, armoured with metal (e.g. with a spiral of metal wire) or fitted with non-textile accessories such as fittings for joining one section to another, nozzles etc.
Tubes, pipes and hoses of vulcanised rubber reinforced internally with textile material or covered with an external sheath of thin fabric are to be classified in Heading 40.09.”.
13. Permaline Fire Hose being an article of textile falling under Section XI (Textile and Textile Articles) of the Schedule to the Tariff Act, is outside the purview of Chapter 40 as per Chapter Note 2(a) of the said Chapter which shows that the goods mentioned in Section XI are not covered by Chapter 40.
14. The impugned order has proceeded on the basis that “Textile hose pipe having rubber impregnated” on both sides cannot be covered under Heading 59.07. There is no dispute that the hose pipe is a textile hose pipe. However, the Collector has excluded the product from Heading 59.07 holding that lining can only be on the inner side of the item and since the product in question has rubber impregnated on both sides it cannot be treated to have lining of rubber as the expression ‘lining’ is generally understood. Even though he has held that the product is a textile tubing, he has erred in holding that a textile piping with rubber coating on inside alone would fall under Heading 59.07 and he has classified the product under Heading 4009.92 as piping of vulcanised rubber designed to perform the function of conveying air, gas or liquid.
15. The Permaline Fire Hose manufactured by the appellants being a textile hose coated with rubber, is correctly classifiable under Heading 59.07 and not under Heading 4009.92.
16. It would also be relevant to point out that even the Department has viewed that the more appropriate classification of textile hose pipes woven on circular looms and impregnated with rubber would appear to be under Heading 59.07 of the Central Excise Tariff and this position is classified under Trade Notice No. 119/89 dt. 18th July, 1989.
17. In the light of the above discussion we hold that the correct classification of the appellants’ product i.e. Permaline Fire Hose is under Heading 59.07 of the Schedule to the Central Excise Tariff Act, 1985. We set aside the impugned order dated 3-10-1988 and allow the appeal with consequential relief, if any.