2018 (7) TMI 1191 - AT - Central Excise

Demand of duty - Intermediate products - Urea Formaldehyde Resin, Phenol Formaldehyde Resin and Melamine Formaldehyde Resin. Held that - Reliance placed in the case of M/S GREENPLY INDUSTRIES LTD. (UNIT-I) , M/S RAMA PANELS PVT. LTD., M/S ARCHIDPLY INDUSTRIES LTD. VERSUS COMMISSIONER OF CUSTOMS & CENTRAL EXCISE, MEERUT 2018 (2) TMI 365 - CESTAT ALLAHABAD , where it was held that on the intermediate products emerges in manufacturing process of particle boards, the appellant is not required to pay duty. Demand do not sustain - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against Order-in-Appeal demanding duty on intermediate products Urea Formaldehyde Resin, Phenol Formaldehyde Resin, and Melamine Formaldehyde Resin under area-based exemption Notification No.50/2003-CE.

Analysis:
The appellant, a manufacturer of laminates availing area-based exemption, faced a duty demand on resins used in manufacturing laminated boards, leading to an investigation by Central Excise intelligence. Show cause notices were issued for various periods, culminating in the impugned Order-in-Appeal dated 26/10/2015. The Tribunal, in a prior order, set aside a similar Order-in-Original on the same issue, emphasizing the classification of the product as prepared glue based on processes and emerging products. The Tribunal rejected Revenue's reliance on test reports due to procedural issues and lack of cross-examination, also noting discrepancies in equipment descriptions. It concluded that the appellant's products, essential for bonding wood fibers, did not fall under primary resin classification, warranting exemption.

This detailed analysis covers the issues involved in the appeal against the duty demand on intermediate products Urea Formaldehyde Resin, Phenol Formaldehyde Resin, and Melamine Formaldehyde Resin under the area-based exemption Notification No.50/2003-CE. The judgment highlights the Tribunal's decision based on classification, procedural irregularities in test reports, and the essential nature of the products for bonding wood fibers, leading to the setting aside of the impugned order.