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PETITIONER: COLLECTOR OF CENTRAL EXCISE, MADRAS

       Vs.

RESPONDENT: M/S MRF LIMITED ETC.

DATE OF JUDGMENT:       03/12/1997

BENCH: S.P. BHARUCHA, S.C. SEN

ACT:

HEADNOTE:

JUDGMENT:                THE 3RD DAY OF DECEMBER, 1997 Present:                 Hon’ble Mr.Justice S.P. Bharucha                 Hon’ble Mr.Justice S.C. Sen Joseph Vellapalli, Sr.Adv., Anoop G. Choudhary, Rajiv Nanda, V.K. Verma,  S.D.Sharma, S.Ganesh K.R. Nambiar, V.Sridharan, T.Viswanathan, V.Balachandran,  and Rajesh Kumar, Advs. with him for the appearing parties.                       J U D G M E N T      The following Judgment of the Court was delivered:                             WITH      CIVIL APPEAL NOS. 2112 OF 1988 AND 8341-42 OF 1995 Bharucha, J.      We are  concerned in these appeals with product "rubber cement" or  "black vulcanising  cement" manufactured  by the assessees.   The case  before the Tribunal was that the said product fell  under Tariff  Entry  40.17  according  to  the assessees and  under Tariff  Entry 40.05  according  to  the Revenue, the  appellant before us.  The Tribunal came to the conclusion that  the said product was correctly classifiable under Tariff  Item 35.012  prior to 10th February, 1987, and under Tariff  Item  35.06  thereafter.  The  assessees  have accepted the  classification made  by the  Tribunal Only the Revenue is in appeal      Tariff Entry 40.05 reads thus: ------------------------------------------------------------ Heading   Sub-Heading    Description of goods   Rate of duty No.       No. ------------------------------------------------------------ 40.05     4005.00       Compounded rubber,      40%                         unvulcanised, in                         primary forms or in                         plates, sheets or                         strip. ------------------------------------------------------------ - Tariff Entries 35.01 and 35.06 read thus: ------------------------------------------------------------ Heading    Sub-Heading    Description of goods  Rate of duty No.        No.

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------------------------------------------------------------ "35.01                Albuminoidal substances;                       modified straches; glues;                       enzymes           3501.10     -Esterified starches         40%           3501.20     -Dextrins and other          15%                        modified starches           3501.90     -Other                       15% 35.06     3506.00      Prepared glues and other    15%                        prepared adhesives, not                        elsewhere specified or                        included." ------------------------------------------------------------      The Tribunal  noted  the  process  by  which  the  said product was  manufactured.   If found  that the raw material that was used to manufacture the said product was classified by the Revenue under Tariff Entry 40.08, which reads thus:      "Plates,  blocks,   sheets,  strip,      rods,  and   profile   shapes,   of      vulcanised   rubber    other   than      hardened rubber."      The Tribunal said that this would point to the position that the  raw  material  was  vulcanised  rubber  and  that, therefore, the  said product  could not possibly fall within Tariff Entry  40.05 which  spoke of  "Compounded rubber, un- vulcanised, in primary forms.....".      Learned counsel  for the  Revenue drew our attention to Chapter Note  3 of  Chapter 40  of the Central Excise Tariff which reads thus:      "3 In heading Nos. 40.02, 40.03 and      40,05,  the   expression   ’primary      forms’ applied  only to liquids and      pastes (including latex, whether or      not   prevulcanised,    and   other      dispersions  and   solutions),  and      blocks of  irregular shape,  lumps,      bales,  powders,  granules,  crumbs      and similar bulk forms".      It seems to us that no argument based on Chapter Note 3 or otherwise  can be  of any  avail to  the Revenue,  having regard to the undisputed position that what is used as a raw material to  produce the  said product  is classified by the Revenue itself as vulcanised rubber.  If the raw material is vulcanised rubber,  the said  product made  from  it  cannot possibly be  unvulcanised rubber  the said product made from it cannot possibly be unvulcanised compounded rubber.      The Revenue  is, therefore,  unable to  satisfy us that the said  product falls under Tariff 40.05 as it claims.  it cannot argue  that, in  any event, the Tribunal was in error in classifying the said product under Chapter 35.      The appeals are dismissed with no order as to costs.