Case: M.M. Rubber Company Limited Vs. Collector of Central Excise Madras

1. It is not necessary to go into the history of the proceedings that led to the order of the Customs, Excise and Gold (Control) Appellate Tribunal which is under appeal. It is sufficient to say that the Tribunal upheld the classification of pillion seats for scooters, driver and passenger seats for autorickshaws and seats for tractors and jeeps as "latex foam sponge" falling under Itemof the Central Excise Tariff and rejected the contention of the appellants that the seats should be classified under Item), at the relevant time, readRubber products, the following, namely(i) Latex foam sponge 60% ad valorem"With effect froman explanation was introduced in Itemto include articles made of latex foam sponge. Tariff ItemA. Parts and accessories of 20 per cent ad valoremmotor vehicles not otherwisespecifiedExplanation.The expression Motor vehicles has the meaning assigned to it in Item 34."3. The Tribunal, in the order under appeal, found that there was no transformation of the liquid froth foam sponge. It merely took the shape of the mould into which it was poured. Referring to the judgment of this Court in Atul Glass Industries (P) Ltd. v. CCE [ 1986 (2) SCC 480 the Tribunal stated that the functional aspect referred to therein had no significance in the case before it because the functional use of a mirror was totally different from the functional use of glass (which was theof the case of Atul Glass Industries [ 1986 (2) SCC 480. In the instant case, although the latex foam sponge had acquired the shape of a seat, it had not, unlike in the case of the glass mirror, undergone such a complete or considerable transformation that the moulded product no longer was identifiable as latex foam sponge. It continued to be sponge moulded into a particular, desired shape. Further, there was no item more specific than "latex foam sponge" to cover the moulded goods. Emphasis was also laid upon the fact that the seats had not been fabricated from out of bigger pieces of sponge

Court's reasoning:
7. Insofar as the period prior tois concerned, we are of the view that the Tribunal erred in its reasoning. The seats were specifically moulded latex foam sponge for use in given vehicles. They could be used only for the purpose for which they were made, for particular scooters, autorickshaws, tractors and jeeps, and this functional aspect was of significance. The seats having been moulded for use as parts of these motor vehicles, the entry that more specifically applied was Tariff Item82, (sic) became the amended Tariff Itemincluded articles made of latex foam sponge, and that, as would appear from the record before us, was the entry that more specifically applied