1982 (4) TMI 282 - CGOVT - Central Excise

Summary

Issues: Classification of product under Central Excise Tariff, interpretation of Notification No. 122/71, applicability of exemption to phenolic resins.

In this judgment by the Government of India, the issue revolved around the classification of a product, Phenol Formaldehyde Moulding powder, under the Central Excise Tariff. The petitioners claimed that the product should be considered a phenolic resin and thus eligible for partial exemption under Notification No. 122/71. The Assistant Collector of Central Excise initially held that the product was not covered by the exemption as it was deemed a plastic material and not sold as resin. This decision was upheld by the Appellate Collector, leading to the Revision Application.

The petitioners argued that the product met the definition of 'phenolic resins' as per explanation (iii) to Notification 122/71, which included synthetic resins manufactured by reacting phenols with an aldehyde and excluded blends with other resins. They contended that even if the product was not a chemically modified phenolic resin, the notification should still apply. They also cited a judgment by the Bombay High Court in a similar case, where phenolic moulding powder was granted exemption under the same notification, emphasizing that the judgment should be binding on the Government.

Upon careful consideration, the Government agreed with the petitioners' submissions. They found that Phenol Formaldehyde Moulding powder, derived from the chemical reaction of phenolic resin with fillers and additives, remained a phenolic resin. The Government interpreted Notification No. 122/71 to apply to all phenolic resins, including chemically modified ones, except blends with other resins. They emphasized that the use of the word 'including' in the notification expanded the scope of the exemption to cover modified phenolic resins. Consequently, the Government set aside the previous orders and ruled that the product in question was entitled to the benefit of the exemption as a phenolic resin, allowing the Revision Application.