1988 (2) TMI 220 - AT - Central Excise

Issues Involved:
1. Classification of LDPE colours/pigments (Master Batches) after the amendment of Tariff Item 15A on 28-2-1982.
2. Whether master batches fall under Tariff Item 15A(1) or Tariff Item 14I(l)(ii).
3. Applicability of Notification No. 83/83-C.E. and Notification No. 111/78-C.E. for exemption from duty and licensing control.
4. Whether manufacture is involved in producing master batches.
5. Relevance of commercial parlance and scientific expressions in classification.
6. Applicability of previous Tribunal decisions on similar issues.

Detailed Analysis:

1. Classification of LDPE colours/pigments (Master Batches) after the amendment of Tariff Item 15A on 28-2-1982:

The primary issue in this appeal was the classification of LDPE colours/pigments (Master Batches) post-amendment of Tariff Item 15A on 28-2-1982. The appellant had earlier classified PVC Master batches under Tariff Item 14I(l)(ii) but sought reclassification under Tariff Item 15A(1) post-amendment, claiming full exemption under Notification No. 83/83-C.E. and from licensing control under Notification No. 111/78-C.E. The Assistant Collector and the Collector of Central Excise (Appeals) upheld the classification under Tariff Item 14I(l)(ii), leading to this appeal.

2. Whether master batches fall under Tariff Item 15A(1) or Tariff Item 14I(l)(ii):

The appellant argued that the restructured Tariff Item 15A, which included "other materials," should encompass master batches as they are used in plastic articles. The respondent contended that master batches are colour concentrates distinct from base materials and should be classified under Tariff Item 14I(l)(ii). The Tribunal referred to the decision in M/s. National Organic Industries v. Collector of Central Excise, Bombay, where master batches were classified under Tariff Item 68. It was noted that the issues in the present appeal were different from those in the Plastic Colour Corporation case, leading to a separate hearing.

3. Applicability of Notification No. 83/83-C.E. and Notification No. 111/78-C.E. for exemption from duty and licensing control:

The appellant claimed exemptions under these notifications, arguing that no manufacture was involved, and thus no duty was attracted. However, the respondent countered that even if master batches fell under Tariff Item 15A(1), they would not be exempt from duty without a specific exemption notification. The Tribunal's decision in M/s. Guardian Plasticote Ltd. was cited to support this argument.

4. Whether manufacture is involved in producing master batches:

The appellant argued that no manufacture took place as no distinct articles with new names, characters, or uses emerged from mixing pigments and colours. The respondent, however, maintained that master batches are specialized products used in the plastic industry and should be classified under Tariff Item 14I(l)(ii).

5. Relevance of commercial parlance and scientific expressions in classification:

The appellant contended that the test of commercial parlance was not relevant for classification under Tariff Item 15A(1), which uses scientific expressions. The Tribunal, however, referred to technical literature and commercial understanding to determine that master batches are distinct from base materials and should be classified accordingly.

6. Applicability of previous Tribunal decisions on similar issues:

The Tribunal referred to its previous decision in National Organic Industries, where master batches were classified under Tariff Item 68. The appellant attempted to distinguish this decision based on the amendment of Tariff Item 15A, but the Tribunal found no force in this argument, holding that the decision's ratio was still applicable.

Conclusion:

Following the Tribunal's decision in National Organic Industries, the Tribunal held that master batches are classifiable under residuary Tariff Item 68, not under Tariff Item 14I(l)(ii) as claimed by the Revenue or Tariff Item 15A(1) as claimed by the appellants. The appellants' classification list was ordered to be approved accordingly, with consequential relief and adjustment as necessary. The appeal was disposed of in these terms.

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