2001 (8) TMI 775 - AT - Central Excise

Issues Involved:
1. Classification of 'Seamless C.S. Pipe lined with Plastic' and 'Pipe fittings lined with Plastic' under the Central Excise Tariff Act.
2. Whether the process undertaken by the appellants amounts to manufacture.
3. Applicability of previous adjudication orders and classification lists.

Detailed Analysis:

Issue 1: Classification of Products
The primary issue was whether 'Seamless C.S. Pipe lined with Plastic' and 'Pipe fittings lined with Plastic' should be classified under Heading 39.17 as claimed by the appellants or under Heading 73.04 or 73.05 as confirmed by the Commissioner (Appeals).

Arguments by Appellants:
- The products are composite articles made of plastic and non-plastic materials, with plastic constituting 80% to 87% of the total cost.
- The essential character of the products is derived from plastic due to its anti-corrosion properties.
- They relied on several judgments and Board's letters to support their claim that the process does not amount to manufacture and that the essential character is provided by plastic.

Arguments by Respondents:
- The impugned product is essentially steel pipes reinforced with plastic.
- The process undertaken amounts to manufacture as a new product with distinct nature, use, or character emerges.
- The essential character of the product is provided by steel, not plastic.

Judgment:
The Tribunal held that the essential character of the product is provided by steel and not by the plastic lining. The impugned product falls under Heading 73.04/73.05. The Tribunal emphasized that the lining material cannot be the basis for determining the classification of the product.

Issue 2: Whether the Process Amounts to Manufacture
The appellants argued that the process undertaken does not amount to manufacture as no new distinct product emerges. They cited several judgments to support this claim.

Judgment:
The Tribunal observed that a new product, C.S. pipe lined with PTFE, is indeed manufactured. Applying the ratio of the Supreme Court decision in the J.G. Glass Industries case, the Tribunal concluded that a new product with a distinct nature, use, or character emerges. Thus, the process undertaken by the appellants amounts to manufacture.

Issue 3: Applicability of Previous Adjudication Orders and Classification Lists
The appellants argued that their classification list No. 81/88, claiming classification under Heading 39.17, was approved under an Adjudication Order in 1988 and that subsequent classification lists were also approved without appeal.

Judgment:
The Tribunal held that every new classification list has to be approved by the proper officer, and the Commissioner is empowered to review the same under the provisions of Section 35E of the Central Excise Act. The Tribunal found no merit in the appellants' submissions that the Revenue is estopped from reviewing the classification list No. 5/92-93 effective from 1-4-1992.

Conclusion:
The appeal was rejected, and the Tribunal upheld the classification of the impugned products under Heading 73.04/73.05, concluding that the process undertaken amounts to manufacture and that the essential character of the product is provided by steel.

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