2003 (4) TMI 158 - AT - Central Excise

Summary

Issues:
Classification of HDPE sheet as "Tarpaulin" under Chapter 63 vs. under sub-heading No. 3926.90.

Analysis:
The dispute in the appeal revolves around the classification of the appellants' product, specifically whether the HDPE sheet should be classified as "Tarpaulin" under Chapter 63 or under sub-heading No. 3926.90. The appellants argue that their product should be classified as Tarpaulin under Chapter 63, citing a specific entry for Tarpaulin. They rely on a previous CEGAT order where Tarpaulin was classified under Chapter Heading No. 63.01. On the other hand, the Revenue contends that the product is fully made of plastic and should be classified under sub-heading No. 3926.90, based on Chapter Note 1 of Chapter 39 of the Central Excise Tariff Act, 1985.

The process of manufacturing the appellants' product involves sending HDPE granules to a job worker who manufactures HDPE strips, which are then turned into HDPE woven fabrics and laminated with polyethylene granules to create Tarpaulin. The Revenue argues that since the product is entirely made of plastic without any fabric, it falls under the category of plastic materials under Heading Nos. 39.01 to 39.14, as per the Central Excise Tariff Act, 1985.

The Tribunal considered both parties' submissions and examined the manufacturing process. It noted that Tarpaulins are typically made of man-made fabrics coated with plastic to make them waterproof. As the appellants' product does not use any fabric and is exclusively made of plastic, it does not meet the criteria to be classified as Tarpaulin under Chapter 63. The Tribunal referenced previous decisions, including one where HDPE fabrics coated with LDPE were classified under sub-heading 3926.90. Based on these considerations, the Tribunal upheld the classification of the product under sub-heading 3926.90 and rejected the appeal.

In conclusion, the Tribunal determined that the appellants' HDPE sheet, being wholly made of plastic without any fabric, should be classified under sub-heading No. 3926.90 rather than as "Tarpaulin" under Chapter 63. The decision was based on a detailed analysis of the manufacturing process, legal provisions, and precedents, leading to the rejection of the appeal and upholding of the impugned orders.