2003 (5) TMI 310 - AT - Central Excise

Summary

Issues involved: Classification of product "EPE Wadding - Cellular" under Chapter sub-heading 3921.19 vs. sub-heading 3923.19, consideration of Modvat credit, and treating duty as cum-duty.

Classification Issue:
The appeal concerns the classification of "EPE Wadding - Cellular" as plates and sheets in rolls under Chapter sub-heading 3921.19 of the C.E. Tariff Act, as determined by the authorities in the order-in-original. The appellants argued that the item should be classified under sub-heading 3923.19 as an article, emphasizing that the item, although in rolls, is known as EPE Wads in the market. They contended that the item is cut into sizes for conveyance and packing of goods, transforming it into an article. However, the Commissioner (Appeals) rejected their plea, citing that the item in rolls does not assume the shape of an article to be classified under sub-heading 3921.19. The Tribunal, after careful consideration of the chapter note and headings, agreed with the Commissioner (Appeals) that the item is plastic material in rolls and has not assumed the form of an article. The Tribunal found the classification under sub-heading 3921.19 to be correct, referencing the Apex Court judgment in a similar case. The appellants' reliance on judgments related to different articles was deemed inapplicable, leading to the confirmation of the classification under sub-heading 3921.19.

Modvat Credit and Cum-Duty Issue:
The appellants raised concerns regarding the consideration of Modvat credit and treating the duty as cum-duty, which were not addressed by the authorities below. The Tribunal acknowledged that both authorities did not deal with this issue and noted that it was raised by the appellants in their reply to the show cause notice and in a written note before the Commissioner (Appeals). As a result, the Tribunal remanded this issue for reconsideration, directing the original authority to determine the correct duty amount and allow the appellants to produce evidence to support their claim. The Tribunal emphasized the need for de novo proceedings to address the Modvat credit and cum-duty treatment, ensuring a fair examination of the appellants' contentions. The citations provided by the appellants on this matter were considered by the Tribunal in reaching this decision.

Conclusion:
In conclusion, the Appellate Tribunal upheld the classification of "EPE Wadding - Cellular" under Chapter sub-heading 3921.19, finding it to be plastic material in rolls that had not assumed the form of an article. The Tribunal referred the issue of Modvat credit and treating duty as cum-duty back to the original authority for reconsideration, emphasizing the appellants' right to present evidence and the need for a prompt resolution. The judgment provides a detailed analysis of the classification dispute and the procedural aspects related to the Modvat credit and cum-duty treatment, ensuring a thorough examination of the legal issues involved in the case.