1978 (1) TMI 76 - HC - Central Excise

Summary

Issues:
1. Whether the side panels manufactured by the petitioner fall under Tariff Item 15A(2) as contended by the respondents?
2. Whether the levy of excise duty on the petitioner for the side panels is legal?
3. Whether the classification of the side panels as 'rigid plastic board' under Tariff Item 15A(2) is correct?
4. Whether Rule 10 can be invoked for levying excise duty on the petitioner beyond one year from the date of manufacture?

Analysis:
The petitioner, a company manufacturing glass fiber articles, including glass fiber boats, bath tubs, toilet seats, and washbasins, challenged the excise duty demand on side panels used as accessories to bath tubs. The dispute arose when the Central Excise department claimed a duty of Rs. 15,393.39 for the panels cleared without payment against Tariff Item 15A. The petitioner argued that the side panels were not excisable items and denied liability. The Assistant Collector assessed the petitioner for duty, leading to an appeal to the Appellate Collector and a subsequent revision to the Government of India, all of which were dismissed, prompting the writ petition.

The petitioner contended that the side panels did not fall under Tariff Item 15A as claimed by the respondents. The petitioner's counsel argued that the levy of duty on the side panels was illegal and beyond the permissible time limit under Rule 10. The respondents argued that the side panels constituted 'rigid plastic board' under Tariff Item 15A(2) due to the use of fiberglass in their manufacture, justifying the duty imposition. The Court examined whether the side panels could be classified as 'rigid plastic board' and whether the levy was valid.

The Court analyzed Tariff Item 15A(2) which covered articles made of plastics, including various shapes, and the definition of 'plastics' under the explanation. It considered the commercial understanding of the side panels and the discretion of the department in classification. Referring to precedents, the Court emphasized the common sense understanding of goods by the trading community. It concluded that the side covers for bath tubs were not commercially perceived as 'plastic rigid board,' hence not falling under Item 15A. As a result, the petitioner was held exempt from excise duty, rendering the levy invalid. The Court did not delve into the invocation of Rule 10 due to the exemption granted.

In the final judgment, the Court allowed the writ petition, ruling in favor of the petitioner and dismissing the excise duty demand. No costs were awarded in the matter.