1984 (4) TMI 286 - AT - Central Excise

Summary

Issues Involved:
1. Classification of PVC films/sheets as excisable under Item 15A(2) of the Central Excise Tariff Schedule.
2. Validity of reclassification and demand for duty under Rule 10/10A.
3. Marketability and excisability of crude PVC films/sheets.
4. Applicability of the Appellate Collector's previous order.
5. Validity of the show cause notice without specifying the amount of duty.
6. Impact of retrospective amendments to Rules 9 and 49 by the Finance Act, 1982.
7. Eligibility for Rule 56-A concession.

Detailed Analysis:

1. Classification of PVC films/sheets as excisable under Item 15A(2) of the Central Excise Tariff Schedule
The core issue was whether the crude PVC films/sheets fell within Item No. 15A(2) CET. The Tribunal noted that the tariff entry did not distinguish between crude and finished films/sheets. It was concluded that all forms and varieties of films/sheets, including crude ones, would be covered by Item 15A(2), CET. The Tribunal referenced the Bombay High Court's decision in *Commissioner of Sales Tax v. Agarwal & Co.* which held that a general term in fiscal legislation covers all forms and varieties of a commodity. Thus, the crude PVC films/sheets were deemed excisable under Item 15A(2), CET.

2. Validity of reclassification and demand for duty under Rule 10/10A
The Tribunal acknowledged that the Assistant Collector initially approved the classification list on 9-12-1975, which claimed the crude PVC films/sheets were non-marketable intermediate products for internal use. However, a show cause notice was issued on 15-2-1977 under Rule 10, later corrected to Rule 10A. The Tribunal determined that Rule 10-A could not have been invoked against Bhor since the Department was aware of the product's nature. The demand for duty was limited to the 12 months preceding the show cause notice, as per Rule 10 read with Rule 173-J.

3. Marketability and excisability of crude PVC films/sheets
Bhor contended that their crude PVC films/sheets were not marketable and, therefore, not excisable. The Tribunal, however, found that the marketability test was not relevant for classification under Item 15A(2), CET. It was noted that the properties of PVC films could vary widely and that the term "films/sheets" in the tariff item covered all forms, including crude ones. Therefore, the crude films/sheets were considered excisable.

4. Applicability of the Appellate Collector's previous order
Bhor argued that the Appellate Collector's order dated 14-1-1974, which held the crude PVC sheets non-excisable, was final and binding as it was not reviewed. The Tribunal clarified that the previous order pertained to a different period and context (manufacture of leather cloth before Notification No. 75/71). The Tribunal held that the Assistant Collector's decision to reclassify the product in the current context was justified despite the previous order.

5. Validity of the show cause notice without specifying the amount of duty
Bhor claimed that the show cause notice was void as it did not specify the amount of duty. The Tribunal noted that Bhor had not provided the necessary particulars of clearances despite multiple requests from the Department. Given this context, the Tribunal found that the Assistant Collector could not have specified the amount in the notice. The Tribunal rejected Bhor's contention, referencing the Delhi High Court's decision in *Hindustan Aluminium Corporation Ltd. v. Supdt. of Central Excise, Mirzapur & Others*, which held that non-mention of the amount did not render the notice void.

6. Impact of retrospective amendments to Rules 9 and 49 by the Finance Act, 1982
The Tribunal noted that the retrospective amendments to Rules 9 and 49 by the Finance Act, 1982, clarified that excisable goods manufactured and consumed captively were liable to duty unless specifically exempted. Since no exemption notification was cited for PVC films/sheets used in the manufacture of adhesive tapes, insulating tapes, and laminates, the demand for duty was deemed justified.

7. Eligibility for Rule 56-A concession
The Tribunal refrained from expressing a view on Bhor's eligibility for the Rule 56-A concession, as this point was not raised before the lower authorities. Bhor was allowed to raise this issue before the lower authorities if they wished.

Conclusion:
The Tribunal confirmed the Appellate Collector's order with the modification that duty in respect of clearances prior to the show cause notice should be restricted to the period permissible under Rule 10 read with Rule 173-J, i.e., 12 months. The appeal was allowed to this limited extent and otherwise rejected.