1990(01)LCX0080

BEFORE THE CEGAT, SPECIAL BENCH ‘C’, NEW DELHI

Shri G. Sankaran, Senior Vice President and Ms. Jyoti Balasundaram, Member (J)

SUNDARAM CLAYTON LIMITED

Versus

COLLECTOR OF C. EX.

Order No. 17/90-C, dated 10-1-1990 in Appeal No. E/3622/87-C

Cases Quoted

BRAKE INDIA LIMITED v. COLLECTOR - 1987(08)LCX0099 Eq 1987 (031) ELT 1030                         [PARAS 8 & 9]

COLLECTOR v. AEROLEX HOSE (P) LTD. - 1989 (039) ELT 681                                  [PARA 6]

Advocated By : Shri V. Lakshmi Kumaran, Advocate for the Appellants.

Shri A.S. Sunder Rajan, JDR, for the Respondent.

[Order per : Jyoti Balasundaram, Member (Judicial)]. - The short point for consideration in this appeal is the eligibility of the appellants’ products, i.e. hydraulic brake hoses, to the benefit of Notification 197/67 Central Excise dated 29-8-1967, granting exemption from excise duty to “piping and tubing designed for use as hydraulic or air brake hoses in motor vehicles”.

2. The brief facts of the case are that the appellants manufacture hose assemblies. They purchase rubber hoses in long lengths on payment of NIL duty under Chapter 4009.92, cut the lengths to required sizes and fit them with metallic end fittings. The resultant product is “Hydraulic brake hose for motor vehicles” which are classifiable under Chapter 40.09 of the Central Excise Tariff Act, 1985.

3. The benefit of Notification 197/67 as amended by Notification No. 78/86 dated 10-2-1986 was denied to the appellants by the lower authorities and hence the appellants have come up in appeal before us.

4. We have heard Shri V. Lakshmi Kumaran, learned Advocate for the appellants and Shri A. S. Sunder Rajan, learned SDR for the respondents.

5. It is seen that the Asstt. Collector rejected the claim of the appellants to exemption under Notification 197/67 on the ground that the exemption is confined only to “piping and tubing of unhardened vulcanised rubber designed for use as hydraulic/air brake hose in motor vehicles” and not to “hose assemblies”. The Collector (Appeals) has rejected the claim, holding that the exemption is confined to piping and tubing and does not apply to brake hose.

6. Under the new Central Excise Tariff, rubber brake hoses are classifiable under Chapter 40.09 which reads as: -

“Tubes, pipes & hoses of vulcanised rubber other than hardened rubber, with or without their fittings (for example, joints, elbows and flanges) Hydraulic brake hoses are rightly classifiable under Heading 4009.92 which covers tubes, pipes and hoses designed to perform the function of conveying air, gas or liquid". This Tribunal, in a decision reported in 1988(11)LCX0055 Eq 1989 (039) ELT 0681 (CCE v. Aerolex Hose (P) Ltd.) has upheld the classification of hose assembly of vulcanised unhardened rubber under sub-heading 4009.92 of Central Excise Tariff Act, 1985.

7. The appellants claim the benefit of Notification 197/67 which grants exemption from excise duty to piping and tubing of unhardened vulcanised rubber, falling under Chapter 40 of the Schedule to Central Excise Tariff Act, 1985. The notification reads as follows: -

“In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts piping and tubing of unhardened vulcanised rubber, falling under Chapter 40 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), and specified in column (2) of the Table below from the whole of the duty of excise leviable thereon :-

TABLE

(Notification No. 197/67-C.E., dated 29-8-1987 as amended by Notifications No. 1/68-C.E., dated 6-1-1968; No. 161/70-C.E., dated 29-8-1970; No. 17/73-C.E., dated 3-2-1973; No. 72/74-C.E., dated 13-4-1974 and No. 78/86-C.E., dated 10-2-1986)"

Serial No. 4 (b) of the notification refers to piping and tubing designed for use as hydraulic or air brake hoses in motor vehicles.

8. The question of classification of brake hose assemblies, that is, brake hoses with end fittings, had come up for consideration before the Tribunal in Brakes India Limited and Others v. CCE Madras and Others -1987(08)LCX0099 Eq 1987 (031) ELT 1030. The Tariff Item No. 16A at the relevant time, read as follows: -

“Rubber products, the following namely: -

1. xxxxxxxxx

2. xxxxxxxxx

3. Piping and tubing of unhardened vulcanized rubber.

4. xxxxxxxxx

The Tribunal ruled that the correct classification of hydraulic and air brake hose assemblies was under the residuary Item No. 68, CET and not under Item No. 16A(3). It was further held that the benefit of Notification No. 197/67 would not be applicable to the said hose assemblies. Shri Sunder Rajan has contended that the ratio of this decision would apply to the instant case also. But as correctly pointed out by the Counsel for the appellants, the said decision was rendered in the context of the then Item 16A of the Central Excise Tariff Schedule. The present dispute has to be resolved in the context of the admitted classification of brake hose assemblies under Chapter 40, Heading No. 4009.92 of the Schedule to the Central Excise Tariff Act, 1985. The scope and coverage of the entries 16A(3) and Heading 4009.92 are not the same. As we have seen, the latter heading covers hose pipes with or without end fittings. The entry in the notification, of course, reads in the same manner then and now. But having regard to the difference in the scope of the tariff heading, we are of the opinion that the previous decision is not applicable to the instant case.

9. The appellants’ products squarely fall within the ambit of the notification. There is no dispute that the products are piping and tubing designed for use as hydraulic or air brake hoses in motor vehicles. In the case of Brakes India Ltd. v. CCE - [1987(08)LCX0099 Eq 1987 (031) ELT 1030], this Tribunal has held that a hose pipe is converted into a brake hose assembly by cutting the hose into requisite size, addition of end fittings etc. The presence of end fittings (which are necessary for use as brake hoses) cannot disqualify the products from the benefit of exemption under Notification 197/67. We hold that the appellants’ products are eligible for the benefit of exemption under the above mentioned notification.

10. In view of the above discussion, we set aside the impugned order and allow the appeal with consequential relief.

Equivalent 1990 (47) ELT 480 (Tribunal)