1983 (12) TMI 304 - AT - Customs

Summary

Issues Involved:

1. Whether acrylic sheets crushed scrap attracts countervailing (CV) duty under Item 15A of the Central Excise Tariff (CET).
2. The applicability of previous Tribunal decisions and the principle of res judicata in this context.
3. The classification of acrylic crushed scrap as plastic sheets or waste/scrap under the CET.

Issue-wise Detailed Analysis:

1. Whether acrylic sheets crushed scrap attracts countervailing (CV) duty under Item 15A of the Central Excise Tariff (CET):

The core issue in the appeal was whether acrylic sheets crushed scrap should be subjected to CV duty under Item 15A of the CET. The appellant argued that acrylic crushed scrap is not leviable to CV duty under Item 15A, as it is waste/scrap and not a manufactured good. The Tribunal had previously decided in two cases (Order No. 330/83-C and 1983 E.L.T. 845) that CV duty was not leviable on acrylic crushed scrap. The appellant emphasized that the nature of the goods as waste/scrap exempts them from CV duty, as no one manufactures scrap intentionally.

The Department countered that the crushed scrap arose during the manufacture of prime sheets and should be classified under Item 15A, which covers goods in any form, including scrap. They argued that acrylic plastics, being thermoplastic, can be reformed and remoulded, thus falling under Item 15A.

The Tribunal concluded that crushed scrap cannot be considered as sheets since their utility as sheets was destroyed when they were crushed to sizes of 1" x 1" or less. The Tribunal held that the assessment to CV duty under Item 15A(2) was incorrect and should be struck down.

2. The applicability of previous Tribunal decisions and the principle of res judicata in this context:

The appellant referred to previous Tribunal decisions (Order No. 330/83-C and 1983 E.L.T. 845) where it was held that acrylic crushed scrap was not leviable to CV duty. The Department argued that these decisions were based on incorrect assessments and that new facts, such as the capability of acrylic sheets to be directly moulded, were being presented.

The Tribunal noted that the principle of res judicata, as discussed in the Supreme Court, applies to changes in laws relating to assessment. However, there was no change in central excise law, only the addition of "waste or scrap" to Tariff Item No. 15A in 1982. The Tribunal emphasized that decisions given by the Tribunal should conform to one another to avoid conflict.

3. The classification of acrylic crushed scrap as plastic sheets or waste/scrap under the CET:

The Department argued that Item 15A(1) of the CET was wide enough to cover mouldable or formable scrap and that the inclusion of waste and scrap in 1982 was merely clarificatory. The Tribunal, however, found that the assessment of the goods under sub-item (2) of Item 15A was incorrect, as waste and scrap were not included in this sub-item before 1982.

The Tribunal concluded that pieces of 1" by 1" cannot qualify as sheets under Item 15A(2) and that the assessment to CV duty under this item was wrong. The Tribunal set aside the order of the Appellate Collector and allowed the Custom House to re-examine whether the crushed sheet scrap could be re-assessed to CV duty under any other suitable item of the CET.

Conclusion:

The Tribunal held that the assessment of acrylic sheets crushed scrap to CV duty under Item 15A(2) was incorrect and ordered it to be struck down. The Tribunal allowed the Custom House to re-examine the classification of the crushed sheet scrap under any other suitable item of the CET. All eight appeals were disposed of in this manner.