2002(02)LCX0028

IN THE CEGAT, WEST ZONAL BENCH, MUMBAI

S/Shri Gowri Shankar, Member (T) and G.N. Srinivasan, Member (J)

CAPRIHANS INDIA LTD.

Versus

COMMR. OF C. EX. & CUS., AURANGABAD

Order No. 678/2002-WZB/C-II, dated 20-2-2002 in Appeal No. E/462/2001-Mum.

CASE CITED

Caprihans India Ltd. — Appeal No. 2597/85, decided on 23-4-1986 — Relied on............ [Paras 4, 5, 6]

REPRESENTED BY :      Shri Rohan Shah, Advocate, for the Appellant.

Shri Arun Chopra, DR, for the Respondent.

[Order per : Gowri Shankar, Member (T)]. -  The application is for waiver of deposit of duty of Rs. 188.25 lakhs approx.

2. We have heard both sides.

3. The question for consideration is the classification, and eligibility to the exemption contained in Notifications 8/96 and 4/97 to the product “Sunpac” that the applicant manufactures. This is a flexible plastic hollow corrugated plastic material which is obtained by extrusion and has been surface worked. The product is used as packing material and also for advertising. The assessee had claimed the classification of these goods as article of plastic under Heading 3926.90 of the tariff, and therefore the eligibility to entry 57 of the Table to Notification 4/97. This exempts inter alia goods classifiable under Heading 39.26 other than those specified therein. The department was of the view that the goods would be classifiable under Heading 3926.90 as sheets of plastic and issued notice proposing its classification and consequent denial of the exemption claimed. Adjudicating on the notice, the Assistant Commissioner, relying on his earlier order, that the product was correctly classifiable as a profile shape classifiable under Heading 3926.90 and entitled to exemption, dropped the proceedings. On appeal from this order, the Commissioner (Appeals) has set aside this order and held the goods classifiable under Heading 3926.39 of the tariff, denying the exemption.

4.  The Commissioner (Appeals) had noted the decision of the Tribunal in the appellant’s own case holding the article to be not a sheet but a profile shape (appeal 2597/85). He has further noted that this was passed when the earlier excise tariff was in force. He concluded that by applying the Explanatory Notes to the Harmonised System of Nomenclature under Heading 39.20 the fact that the product contained fluting between the top and bottom layer did not disqualify it being considered as sheet. The counsel for the applicant contends that the classification continues unchanged, despite the change in the tariff. He points out that the Explanatory Notes which the Commissioner (Appeals) relies upon only provided that a sheet continued to be a sheet irrespective of whether it has been surface worked or not, and does not take into account the fluting that exists between the two layers and it obtains its shape and form in to the single portion of extrusion. In this regard the change in the tariff nomenclature does not make any change and remain in the said heading. The departmental representative relies upon the Commissioner (Appeals) order.

5.  In its order passed on this assessee’s appeal on 23-4-1986, the Tribunal noted the manufacturing process and that the product is profile shaped having been extruded and being integrated shape consisting of two layers of sheets with corrugation inside, all fused into one, but not further worked. The sheet is not defined. The Tribunal in its order was concerned with classification contained in Notification 68/71 inter alia to rigid plastic sheets and found the process of manufacture and the presence of fluting inside two layers to disqualified the product being considered as sheets.

6.  Prima facie therefore we are not able to find how the change in the tariff, particularly the presence of Note 10 to Chapter 39 renders the Tribunal decision inapplicable to the classification of the product. Having regard to these factors, and noting the application made for out of turn hearing on the ground that the issue is continuing, we waive deposit of the duty, stay its recovery and list the appeal for hearing on 8-4-2002.

Equivalent 2003 (155) ELT 0136 (Tri. - Mumbai)