1988 (3) TMI 61 - SC - Central Excise

Whether Decoplast manufactured by the appellant is plastic emulsion paint and, therefore, classifiable under Tariff Item 14(I)(3)(iv) of the First Schedule of the Act as plastic emulsion paint or it should be classifiable under Tariff Item No. 14(I)(v) that is as paints not otherwise specified ? Held that - In view of the composition, characteristics, user and how it is known in the trade, the Tribunal came to the conclusion that Decoplast was plastic emulsion paint. This is a finding of fact arrived at on relevant and valid materials. There was no misdirection in law. Therefore, there is no ground for interference with the said Order. Appeal dismissed.

Summary

Issues:
Classification of "Decoplast" under Central Excises and Salt Act, 1944 - Whether it is plastic emulsion paint or falls under "paints not otherwise specified."

Detailed Analysis:

Issue 1: Classification of "Decoplast"
The appeal under Section 35L of the Central Excises and Salt Act, 1944 raised a question regarding the classification of "Decoplast" manufactured by Asian Paints India Ltd. The main issue was whether Decoplast should be classified as plastic emulsion paint under Tariff Item 14(I)(3)(iv) or under Tariff Item No. 14(I)(v) as "paints not otherwise specified."

Issue 2: Tribunal's Decision
The Customs Excise and Gold (Control) Appellate Tribunal (CEGAT) held that Decoplast is plastic emulsion paint, which was challenged by the appellant. The Technical Member of the Tribunal considered Decoplast as emulsion paint based on its composition, characteristics, and uses. The Judicial Member agreed with this view despite the absence of evidence in rebuttal by the Revenue.

Issue 3: High Court's Order
The High Court of Bombay set aside the Government of India's revision order, emphasizing the importance of interpreting entries in the Excise Tariff based on common parlance and trade understanding. The matter was remanded to the Tribunal for a fresh decision, allowing both parties to present evidence.

Issue 4: Arguments Before the Tribunal
The appellant argued that Decoplast was not known in the trade as plastic emulsion paint and provided detailed reasons supporting this claim. They highlighted differences between Decoplast and plastic emulsion paint, including composition, drying process, and trade recognition.

Issue 5: Tribunal's Finding
The Tribunal analyzed Decoplast's composition, characteristics, uses, and reputation in trade parlance to determine its classification. It considered the popular meaning of terms in Tariff items and emphasized the importance of commercial understanding in interpreting such classifications.

Conclusion:
The Tribunal concluded that Decoplast should be classified as plastic emulsion paint based on valid materials, including affidavits and lack of rebuttal evidence from the Revenue. The decision was upheld as a finding of fact without any misdirection in law, leading to the dismissal of the appeal under Section 35L of the Act.