2018 (3) TMI 394 - AT - Central Excise

Classification of goods - Stitch Bonded Fabrics of Glass falling - whether classified under CETH 70199090 or otherwise? - Held that - waste and scrap of glass is covered under Tariff items 7001 and the nature of scrap in the appellant s case since does not fall under first two sub-heading will fall under 7001 00 90 as other waste and scrap of glass. There is no dispute that the trimmings and end cut is waste and scrap and technical/chemical characteristics of the material content is undisputedly glass, therefore, there is no doubt that the goods in question is waste and scrap of glass and correctly classifiable under Tariff items 7001 0090. The goods i.e. trimmings and end cuts arise during the course of manufacture of Stitch Bonded Fabrics of Glass is correctly classifiable as waste and scrap of glass under Tariff items 7001 0090 - appeal dismissed - decided against appellant.

Summary

Issues: Classification of scrap under Central Excise Tariff Act, 1985

Comprehensive Analysis:

Issue 1: Classification of scrap under Central Excise Tariff Act, 1985
The case involved the classification of scrap arising from the manufacture of Stitch Bonded Fabrics of Glass under the Central Excise Tariff Act, 1985. The department contended that the scrap should be classified under Chapter sub-heading 70010090 as waste and scrap of glass. Two show-cause notices were issued demanding Central Excise duty for the periods November 2006 to August 2007 and September 2007 to March 2008. The adjudicating authority confirmed the demand, classifying the scrap under Chapter sub-heading 70199090. The appellants challenged this classification, arguing that the scrap did not fall under the specified tariff item 7001.0090 as they were not manufacturing glass. They relied on judgments to support their contention.

Issue 1 Analysis:
The appellants, through their counsel, argued that since they were manufacturing Stitch Bonded Fabrics and not glass, the scrap arising from their process should not be classified under the waste and scrap of glass category. They emphasized that the waste should find entry in the Central Excise Tariff to be considered dutiable. The counsel cited judgments such as Hindustan Polymers Co. Ltd. Vs. Collector of CE, Guntur and Hindalco Industries to support their position. On the other hand, the Revenue representative reiterated that any scrap arising during the manufacturing process should attract excise duty if it finds entry under the Central Excise Tariff.

Issue 1 Conclusion:
After considering the submissions, the Tribunal analyzed that the appellants were manufacturing Stitch Bonded Fabrics from glass roving, and both raw material and finished goods were made of glass. The end trimmings and cut ends arising during the process were considered waste and scrap. The Tribunal referred to the Central Excise Tariff entry for waste and scrap of glass under 7001, specifically under 7001 0090 for other waste and scrap of glass. It was established that the nature of the scrap in question fell under this category as it was undisputedly glass material. The Tribunal held that the goods were correctly classifiable as waste and scrap of glass under Tariff items 7001 0090, upholding the impugned orders and dismissing the appeals. The judgments cited by the appellants were deemed inapplicable as they did not concern identical goods, and the ratio of those judgments was not relevant to the current case.