2005 (10) TMI 311 - AT - Central Excise

Summary

Issues:
Classification of coating paints based on epoxide resins and pure polyester resins under Central Excise Tariff Act, 1985; Admissibility of concessional rate of duty under Notification 133/86.

Classification Issue:
The manufacturers classified coating paints based on epoxide resins and pure polyester resins under Chapter 39 of the Central Excise Tariff Act, claiming concessional duty under Notification 133/86. The department disputed this classification, arguing that the products were distinct from the raw resins. However, the Tribunal found that the products fell under Heading 39.07, as tacitly accepted by the Revenue. The key question was whether the products were covered by Notification 133/86. Previous decisions extended the benefit of this notification to similar products, including mixtures of resins. The Tribunal noted that powders were considered primary forms under Chapter 39, and additions to resins were permissible as per relevant guidelines. The Tribunal concluded that the products were eligible for the concessional duty rate of 20% ad valorem under Notification 133/86.

Concessional Duty Issue:
The dispute also revolved around the admissibility of the concessional rate of duty under Notification 133/86. The Revenue argued against granting this benefit, referencing another notification. However, the Tribunal clarified that the products fell under specific headings and that the only issue was the applicability of Notification 133/86. Considering the lack of evidence showing impermissible additions to the resins and the inclusive nature of the notification, the Tribunal upheld that the products were rightly eligible for the concessional rate of duty, rejecting the Revenue's appeals.

In conclusion, the Appellate Tribunal CESTAT, Mumbai ruled in favor of the manufacturers, upholding the classification of coating paints based on epoxide resins and pure polyester resins under Chapter 39 and confirming their eligibility for the concessional rate of duty under Notification 133/86. The judgment highlighted the importance of following classification guidelines and the specific provisions of relevant notifications to determine duty rates accurately.