2006 (2) TMI 341 - AT - Central Excise

Summary

Issues involved:
Disputed classification of impugned goods under CET sub-headings 3926.90 and 3920.32/3920.38, whether the goods are plastic sheets, coated or laminated, and the appropriate classification based on the manufacturing process.

Analysis:
1. The dispute in the case revolves around the classification of the impugned goods under different CET sub-headings. The appellants claim classification under CET sub-heading 3926.90 with exemption under Notification No. 132/86, while the Revenue argues for classification under CET sub-heading 3920.32 up to 1-3-1988 and under CET 3920.38 thereafter.

2. The process of manufacture involves extrusion of HDPE granules to produce HDPE films, which are then slitted into narrow strips/tapes. These strips/tapes are woven on a loom to create HDPE fabrics, subsequently covered on both sides by LDPE through an extrusion process. Samples of intermediate HDPE fabrics and LDPE-covered fabrics were presented.

3. The competing tariff entries under Heading 39.20 and 39.26 were examined. Heading 39.26 being a residual entry, the classification under Heading 39.20 would rule out classification under 39.26. The Tribunal sought to determine if the goods could be classified under Heading 39.20 based on being plastic sheets and laminated.

4. In a previous round of litigation, the matter was remanded to ascertain whether the goods are plastic sheets, fibrous or non-fibrous, and if they are coated or laminated. Classification under Heading 39.20 would be appropriate if the product is considered a plastic sheet and laminated.

5. The appellants argued for classification under Heading 39.26 based on similar products classified as other plastic articles in previous cases. They cited judgments like Raj Pack Well Ltd. and others to support their argument that HDPE fabrics coated with LDPE fall under Heading 39.26.

6. The dispute arose on whether the goods are coated or laminated. The appellants argued for coating, while the Revenue contended for lamination based on the extrusion coating process. Previous judgments like Hindustan Packaging Co. Ltd. and Union Carbide (I) Ltd. were cited to support the argument that the process amounts to lamination.

7. After considering the arguments and precedents, the Tribunal held that the impugned goods, being woven HDPE fabric laminated with LDPE, are appropriately classified under Heading 39.26. The manufacturing process involving lamination by extrusion coating led to the classification under the latter heading, setting aside the previous order and granting relief to the appellants.

This detailed analysis of the judgment highlights the key issues, arguments presented, relevant legal precedents cited, and the final decision reached by the Tribunal.