2000 (1) TMI 120 - AT - Central Excise

Summary

Issues Involved:
1. Classification of the product.
2. Consequential demand of Central Excise duty.

Summary:

1. Classification of the Product:
The matter pertains to the classification of a product where Aluminium Foil is backed on one side with printed polyester film and on the other side with High Density Polyethylene (HDPE) film. The Asstt. Commissioner of Central Excise initially classified the product u/s 3920.39 of the Central Excise Tariff, which covers plastic sheets. However, the Commissioner of Central Excise (Appeals) reclassified it u/s 7607.60, which covers Aluminium Foil - backed.

The Revenue argued that the product should be classified under Chapter 39 due to the predominance of plastic in weight and character. They cited various Tribunal decisions and HSN Explanatory Notes to support their claim. The respondents contended that the essential character of the product was provided by the Aluminium Foil, which acts as a barrier to moisture, vapour, and light, making it suitable for packing food items.

The Tribunal noted that the product's strength and stability were provided by the Aluminium Foil, while the plastic components served as protective and reinforcing layers. The Tribunal referenced previous decisions, including the Tribunal's Larger Bench decision in the case of Hindustan Packaging Co. Ltd. v. CCE, Vadodara, which supported the classification of similar products under Chapter 76.

2. Consequential Demand of Central Excise Duty:
The Asstt. Commissioner had confirmed a demand of Rs. 55,95,979/- in an earlier Order-in-Original. The Revenue sought to restore this order, arguing that the product should be classified under Chapter 39, which would justify the demand.

The Tribunal, however, upheld the Commissioner of Central Excise (Appeals)'s decision, stating that the product was correctly classifiable under sub-heading No. 7607.60. The Tribunal emphasized that the essential character of the product was imparted by the Aluminium Foil, not the plastic components. They also noted that the Board's Circular No. 6/89-CX. 3, dated 16-1-1989, supported this classification.

The Tribunal rejected the Revenue's plea for remand, stating that all facts were on record and there was no justification for remanding the matter. They concluded that the classification under Chapter 76 was appropriate and dismissed both appeals filed by the Revenue, as well as the cross objections filed by the respondents.