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2003 (3) TMI 498 - AT - Central Excise
Issues: Classification of Tarpaulins under Central Excise Tariff Act
In this appeal, the issue revolves around the classification of Tarpaulins manufactured from PP/HDPE fabrics under Heading 63.06 of the Central Excise Tariff Act or under sub-heading 3926.90 as confirmed by the Commissioner (Appeals) in the impugned order. Analysis: The appellant, represented by Shri Jitendra Singh, Advocate, argued that the Tribunal had previously decided in the case of M/s. Gujarat Raffia Inds. Ltd. that Tarpaulins made of HDPE are classifiable under Heading 39.26 of the Central Excise Tariff. The appellant requested a requantification of duty demand based on the decision in the case of Srichakra Tyres Ltd. The appellant also contended that no penalty should be imposed as there was a classification dispute, and they had filed a classification declaration under Rule 173B showing the Tarpaulin under a different heading. On the other hand, Shri Vikas Kumar, representing the Respondent, argued that the classification issue had been settled by the Madhya Pradesh High Court in a previous case, and the appellants had not revised the classification as requested by the Department. The Respondent contended that penalties were justified as the goods were cleared without proper duty payment. The Tribunal, after considering both sides' submissions, relied on its previous decision regarding the classification of Tarpaulin made of HDPE and held that Tarpaulin manufactured from PP/HDPE by the appellants should be classified under Heading 39.26 of the Tariff. The Tribunal also agreed with the appellant's argument regarding the price treatment as cum-duty price based on the decision in the Srichakra Tyres Ltd. case. The matter was remanded to the Adjudicating Authority for requantifying the demand accordingly. The Tribunal upheld the imposition of a penalty but reduced it from Rs. 80,000 to Rs. 20,000 considering the circumstances. In conclusion, the appeal was disposed of with the classification of Tarpaulins clarified under Heading 39.26 of the Central Excise Tariff Act, and the penalty reduced to Rs. 20,000 based on the findings and arguments presented during the proceedings.
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