1980 (12) TMI 57 - CGOVT - Central Excise

Summary

Issues:
1. Review of Order-in-Appeal passed by the Appellate Collector of Central Excise, Bombay.
2. Classification of polyurethane foam manufactured by the assessee under Tariff Item 15A(3) or as 'articles made of polyurethane foam' under Tariff Item 15A(4).
3. Eligibility for refund and consideration of time-barred refund claims.

Detailed Analysis:
1. The Government initiated review proceedings to reconsider the Order-in-Appeal passed by the Appellate Collector of Central Excise, Bombay. The Government issued a show cause notice to the assessee, M/s. Kay Foam Ltd., questioning the correctness of the Appellate Collector's order under section 36(2) of the Central Excises and Salt Act, 1944. The main issue was whether the polyurethane foam manufactured by the assessee, cleared in the form of small blocks of different sizes, should be classified as polyurethane foam under Tariff Item 15A(3) or as 'articles made of polyurethane foam' under Tariff Item 15A(4).

2. The assessee argued that the foam blocks, though initially in the form of a loaf of bread, were cut into standard lengths and sliced into various thicknesses before being marketed. They contended that the sliced blocks were merely foam and not recognized as articles made of polyurethane foam in commercial parlance. The Government agreed with the assessee, stating that cutting and slicing the foam did not transform it into articles. The affidavits and submissions provided by the assessee supported their claim, and the method of selling the sliced foam based on weight further reinforced their argument. Consequently, the Government upheld the classification of the foam under Tariff Item 15A(3.

3. Another issue raised in the review proceedings was the eligibility for a refund, with the assessee claiming that their payments were made under protest, making any refund claim not time-barred. The Government noted that this factual aspect needed verification from relevant records before accepting the assessee's contention. While upholding the classification of the foam, the Government directed the Assistant Collector to examine the refund claim's validity concerning the limitation aspect before granting any refund. The review proceedings were concluded accordingly.