2003 (4) TMI 439 - AT - Central Excise

Summary

Issues: Classification of canvas emulsion and artists' canvas.

Analysis:
1. The appeal dealt with the classification of canvas emulsion and artists' canvas manufactured by the appellant. Initially, there was disagreement on the classification, but it was agreed that the canvas emulsion contained inorganic pigments, polyvinyl acetate, polyvinyl alcohol, plasticizer, and formaldehyde. The appellant claimed classification as a painted enamel, while the department argued it should be classified as an article of plastic.

2. The appellant's position was that the material was manufactured to coat grey cotton fabrics for use as artist canvas, requiring uniform opacity, whiteness, and a surface that avoids absorption. The canvas needed body and resins to hold color, with pigments providing these effects and plastic materials acting as binders. The appellant considered the emulsion to be akin to paint.

3. The department emphasized that the whiteness of the canvas was a buyer's choice, and a resin formed a film on the canvas.

4. Affidavits from technical experts were presented, with opinions supporting the appellant's claim. The experts highlighted the necessity of treating the fabric for artist canvas, with pigments providing essential qualities and resins acting as binders, replacing traditional oils.

5. The Assistant Commissioner and Commissioner (Appeals) did not adequately address the contents of the expert affidavits. The appellant's expert emphasized the role of pigments in providing essential qualities, with resins serving as binders, contrary to the department's classification argument.

6. The expert's qualifications and explanations were considered valid, with the product likened to a plastic emulsion used as paint. Reference was made to the Harmonised System of Nomenclature, supporting the classification of the product in question under a specific tariff heading.

7. The classification of the artist canvas was determined based on the classification of the canvas emulsion. Since the product was not classified as a plastic material, the canvas itself was to be classified differently, not as a fabric impregnated with plastic material.

8. Due to the classification determination, arguments regarding limitations were not considered.

9. The appeal was allowed, and the impugned order was set aside.

10. Additionally, a stay application related to another appeal was allowed, setting aside the impugned order based on the decision made in the current appeal.