- (1.) WE have heard Shri Rahul Agarwal for the petitioner. Shri S.P. Kesarwani, additional chief standing counsel appears for the Central Excise Department. The petitioner is a manufacturer of rubber sheets, used in the soles and heels of footwear. The rubber sheets manufactured and sold by the petitioner are classifiable under Tariff Heading 4008 21 10 of the Schedule to the Central Excise Tariff Act, 1985. It is alleged, that the petitioner does not use resin in the manufacture of rubber sheets. The rubber sheets containing resin, also used for soles and heels, is a separate item classifiable under Tariff Entry 4008 29 10, and attracts ten percent. duty.
(2.) ON July 23, 2010 and July 29, 2010, a team of Central excise officials visited the unit of the petitioner and drew samples to verify the ingredients of rubber sheets manufactured by the petitioner. They wrote letters, for ascertaining the chemical properties of one of the chemicals used by the petitioner, to the suppliers of the raw materials. They also sent the samples to the Chemical Examiner, CRCL, New Delhi; the Director FDDI, Noida and the Rubber Institute Thane, Maharashtra, to examine the chemical composition in the samples.
(3.) ON April 29, 2011, a show -cause notice was issued by the Commissioner, Central Excise and Service Tax, Kanpur stating that as per the test reports, and other statements in the possession of the Department, the rubber sheets manufactured by the petitioner were classifiable under Tariff Entry 4008 29 10, and attracted duty at 16 percent., 14 percent., eight percent. and ten percent. (depending upon the rate in force at the relevant time) during the period 2006 -07 to January, 2011. The Department relied upon the test report dated August 5, 2010, given by the Director, FDDI, Noida, and the test report dated March 29, 2011, given by the Rubber Institute, Thane, Maharashtra. It is alleged that both the reports did not give the percentage of resin in the samples or the physical and chemical properties of the goods, and that the reports made available to the petitioner were too vague. The petitioner requested on May 19, 2011, to give complete reports given by the testing institutes, detailing the percentage of resin and the physical and chemical properties of the samples, so as to enable the petitioner to prepare and submit a proper reply in defence. It is alleged that when no reply was received, the petitioner was constrained to seek extension for submission of its reply to the show -cause notice and thereafter on July 6, 2011, the petitioner requested respondent No. 2, to carry out retesting of the product. The petitioner did not accept the vague and unreliable test reports made. By way of abundant caution, the petitioner also submitted interim reply on July 25, 2011, to the show -cause notice. The petitioner's request for retesting the samples was rejected by the Additional Commissioner (Technical), Central Excise, Kanpur, which decision was communicated to the petitioner on August 18, 2011 by the Superintendent of Central Excise (Tech), Kanpur and subsequently by an order dated October 14, 2011, the petitioner was informed that his request for retesting of samples has been declined by the Commissioner, Central Excise, Kanpur, as the test report is very clear, complete and there is no doubt and also since testing has been done by the IRMRA, which is a Central Government recognised institution.;