JUDGMENT
Jeet Ram Kait
1. By this appeal the appellants, viz. M/s Raj Rubber Industries challenges the Order-in-Appeal No. 80/93 C.Ex (TRY) dated 17.11.93 passed by the Commissioner of Customs & Central Excise (Appeals), Trichy by which the Commissioner (Appeals) has rejected the appeal filed by the appellants against the order of the original authority who had held that the goods viz. pre-cured tread rubber is classifiable under chapter heading 4008.21 as against the sub-heading No. 4016.99 claimed by the assessee-appellants.
2. After hearing both the sides, the operative portion of the order allowing the appeal was pronounced in the open Court on 3.3.2003.
3. The brief facts of the case are that the appellants are a Small Scale Unit and are manufacturers of pre-cured synthetic tread rubber. They filed classification List 7/90-91 under sub-heading 4016.99 claiming exemption under Notification
No. 175/86 dated 1.3.86. Proceedings were instituted against them by issue of show cause notice proposing to demand duty of Rs. 525 per kg (BED) as per Notification No. 56/38 dated 1.3.88 and SED thereon at the rate of 5% on the ground that the goods are not eligible for exemption in terms of Notification No. 175/86 dated 1.3.86 and the proceedings culminated in the order of adjudication passed by the original authority classifying the goods viz. pre-cured synthetic tread rubber under sub-heading 4008.21 and demanding differential duty of Rs. 2856.18, in terms of Section 11A of the CE Act, 1944. Aggrieved by the order in original the assessee-appellants filed appeal before the Commissioner (Appeals) who rejected their appeal and it is against the order of the Commissioner (Appeals) that the appellants have come in appeal on the ground that pre-cured tread rubber is an article moulded out of primary forms of rubber under chapter 4005, vulcanised other than hardened and it should fall under chapter 4016.99.
4. Shri V.P. Namasivayam, learned Consultant for the appellants submitted that the view taken by the Commissioner in para 4 of his order that vulcanised rubber other than hard rubber for resoling or repairing or re-treading or rubber tyres falls under 4000.21 as plates, sheets and strips and not under 4016.99 which is a residuary item, is not correct. He submits that the Commissioner (Appeals) while holding so, has referred to Chapter 9 which specifically says sub-heading No. 4008.21 shall also apply to “Plates, sheets and strips, whether or not cut to shape and surface worked or further worked so as to render them fit for resoling or repairing or retreading of rubber tyres”. He submits that their goods are made out of moulding primary forms of unvulcanised rubber and when goods are moulded, they do not remain plates, sheets or strips and cannot be called surface worked or further worked and hence should be rightly calssified under sub-heading 4016.99. He submitted that the view taken by the Commissioner that the process of moulding would not alter the identity of the goods from that of plates, sheets or strips is not correct and in support of his plea he also referred to Chapter 40, and Circular No. 1/91 dated 23.10.91 of Trichy Commissionerate and Board’s letter F. No. 99/7/91 CX 3 (Circular 27/92) according to which when the goods are moulded and deeply grooved they do not remain plates, sheets or strips and therefore, should be rightly classifiable under sub-heading 4016.99 and not fall under Chapter 4008, but would merit classification under sub-heading 4016.99. He has also submitted that when the articles of moulded rubber emerge out of manufacture, they cannot be called plates, sheets or strips. Therefore, the view taken by the Commissioner is not correct. He therefore sought for setting aside the impugned order and allowing the appeal.
5. Shri A Jayachandran, learned JDR appearing for the Revenue defended the order impugned. He referred to para 4 of the order impugned wherein the Commissioner (Appeals) has examined the issue in detail and has reached a conclusion that the goods in question rightly fall under sub-heading 4008.21 which is more specific for tyre retreading material. He therefore, sought for upholding the order impugned and dismissal of the appeal filed by the assessee.
6. We have carefully considered the submissions made by both the sides and gone through the case records. The issue that arises for determination before us is whether pre-cured synthetic tread rubber is classifiable under sub-heading 4008,21 as held by the department or under 4016.99 as claimed by the assessee-appellants. We observe that the Commissioner has proceeded to hold that since sub-heading 4008.21 specifically relates to plates, sheets and strips of vulcanised rubber other than hard rubber, sub-heading 4016.99 is a residuary item dealing with other articles of vulcanised rubber other than hard rubber. He has held that the process of moulding do not alter the identity of the goods from that of plates, sheets and strips, He has also held that Chapter note 9 specifically says “sub-heading No. 4008.21 shall also apply to plates, sheets and strips, whether or not cut to shape and surface worked or further worked so as to render them fit for reasoning or repairing of retreading of rubber tyres. As against the above view of the Commissioner (Appeals). It is the contention of the assessee-appellants that their goods are made out of moulding primary forms of unvulcanised rubber. It is their further contention that the product is a moulded grooved rubber article, and irrespective of the fact that it could be used for retreading, there is no justification for classifying the same under 4008.21. We observe that the factual position that the goods viz. precured tread rubber is manufactured by moulding primary forms of unvulcanised rubber is not disputed by the Revenue. The Central Board also has issued clarification on the subject vide their F. No. 99/7/91-CX.3, (Circular No. 27/91.CX.3) dated 23rd October 1991 which is extracted hereunder:
“Doubt has been raised about the classification of the product namely “grooved rubber sole plate” i.e. whether under sub-heading 4008.29 or 4016,99 of Schedule to the Central Excise Tariff Act, 1985.
2. The matter has been examined in the Board. As per the manufacturing process, unvulcanised rubber sheets are being moulded into vulcanised sheets/plates and then those vulcanised sheets/plates are being cut to shape for obtaining grooved rubber sole plate. By virtue of Note 9 of Chapter 40, if rubber sheets/plates are cut to shape or further worked, they to not fall under sub-heading No. 4008.00 rather after such cutting to shape, they become articles and would merit classification under sub-heading No. 4016.99.”
We further observe that there is a clear exclusion of articles, bevelled or moulded edges, or with rounded corners, open work borders or otherwise worked or cut into shapes other than rectangular (including square (heading 40.14,4015 or 4016) from Chapter. 4008 as per HSN, page No. 591 vide serial No. (b) thereto. Be that as it may. It is well settled that if two views are possible, the view which is favourable to the assessee should be adopted. In view of our discussion above, we hold that the goods viz. pre-cured synthetic tread rubber is classifiable under sub-heading 4016.99 as claimed by the appellants. We, therefore set aside impugned order and allow the appeal with consequential relief, if any.