1983 (7) TMI 171 - AT - Central Excise

Summary

Issues:
1. Classification of imported acrylic crushed scrap for basic customs duty assessment.
2. Applicability of countervailing duty on the imported goods.
3. Interpretation of statutory provisions and exemption notifications for customs and excise duties.

Analysis:
1. The appellants imported acrylic crushed scrap and claimed that it should be classified under Heading 39.07 CTA for basic customs duty assessment. However, the Assistant Collector rejected this claim, stating that the goods fell under Heading 39.01/06 CTA as waste and scrap. The Appellate Collector also upheld this decision, considering the crushed sheet scrap as plastic sheets liable to countervailing duty under Item 15A(2) CET. The appellants later argued that the goods were articles of plastics under Heading 39.07 for customs duty but not liable to countervailing duty. The Tribunal found that acrylic scrap had to be assessed under Heading 39.01/06 CTA as waste and scrap, rejecting the appellants' claim for basic customs duty classification under Heading 39.07 CTA.

2. Regarding countervailing duty, the Department argued that plastic scraps were industrial raw materials covered under Note 3(e) to Chapter 39 of the CTA, making them liable for countervailing duty under Item 15A(1) CET. However, the Tribunal noted that the scope of Item 15A CET was narrower than Chapter 39 of the CTA, covering only specific materials like artificial resins and cellulose esters. The appellants contended that acrylic scrap did not possess plasticity and could not be considered a plastic material, which remained uncontroverted by the Department. The Tribunal, therefore, allowed the claim for exemption from countervailing duty based on the nature of the imported acrylic scrap.

3. The Tribunal carefully analyzed the statutory provisions, including Note 3(e) to Chapter 39 of the CTA, and exemption Notification No. 228/76-Cus. It was established that acrylic scrap fell under waste and scrap category for customs duty assessment and did not qualify as a plastic material for countervailing duty purposes. The Tribunal differentiated between the properties of cellulose acetate scrap and acrylic scrap, emphasizing that acrylic scrap lacked plasticity and required depolymerization before forming articles of plastics. Relying on previous Tribunal decisions and Supreme Court judgments, the Tribunal concluded that acrylic scrap could not be considered a plastic material, providing consequential relief by allowing the claim for exemption from countervailing duty.

In conclusion, the Tribunal rejected the appellants' claim for basic customs duty classification but allowed the claim for exemption from countervailing duty based on the nature of the imported acrylic scrap.