2004 (10) TMI 357 - AT - Central Excise

Summary

Issues: Classification of HDPE tapes under Central Excise Tariff - Heading 39.15 vs. Heading 39.20

Classification under Heading 39.15:
The appellant, a manufacturer of HDPE tapes and fabrics, appealed against an order-in-appeal passed by the Commissioner (Appeals) regarding the classification of twisted HDPE tapes. The appellant argued that these twisted tapes, unsuitable for weaving fabrics, should be classified under Heading 39.15 of the Central Excise Tariff as waste and scrap of plastic. They relied on Notification No. 53/88, which provides a Nil rate of duty on waste and scrap of plastic under Heading 39.15. The appellant also referred to a Trade Notice clarifying the classification of defective plastic sheets and pouches under Heading 39.15 as waste and scrap of plastics. The Revenue contended that the tapes, though not suitable for weaving, were still used for other purposes like stitching ropes and threads, therefore should be classified under Heading 39.20.

Analysis:
The Tribunal noted that the Revenue did not dispute the fact that the twisted tapes were unsuitable for weaving fabrics. Referring to the Trade Notice, the Tribunal emphasized that items not usable for their intended purpose should be classified as waste and scrap of plastic under Heading 39.15. Since the Revenue acknowledged that the defective tapes could not be used for weaving, the Tribunal held that they should be classified under Heading 39.15, entitling them to the benefit of Notification No. 53/88. Consequently, the impugned order was set aside, and the appeal was allowed.

Conclusion:
The judgment established that the classification of twisted HDPE tapes, which were unusable for weaving fabrics, fell under Heading 39.15 of the Central Excise Tariff as waste and scrap of plastic, in line with the Trade Notice and the appellant's contentions. The decision highlighted the importance of classifying items based on their actual use and purpose, ensuring the correct application of relevant tariff headings and duty benefits.