1988 (7) TMI 223 - AT - Central Excise

Summary

Issues:
Interpretation of Notification No. 182/82-C.E. for exemption eligibility based on the composition of plastic razors.

Analysis:
The case involved a dispute regarding the eligibility of plastic razors for exemption under Notification No. 182/82-C.E. The appellants manufactured plastic razors consisting of plastic and iron rod in the stem. The central issue was whether the presence of the iron rod disqualified the razors as articles of plastic eligible for the exemption. The Collector of Central Excise (Appeals) had ruled against the appellants, following the precedent set by the Supreme Court in the case of M/s. Jeep Flashlight Industries Ltd. The Supreme Court's decision in the Jeep Flashlight case established that articles made of plastic must be wholly composed of plastic to qualify for the exemption. The appellants argued that the judgment in the Jeep Flashlight case was not directly applicable to their situation due to differences in the relevant tariff items and the absence of Notification No. 182/82-C.E. in the earlier case.

The appellants contended that their razors should still be eligible for the exemption, citing a previous Supreme Court judgment in the case of Union of India v. Tata Iron Steel Co. Ltd., Jamshedpur, to support their argument that the composition need not be entirely plastic. However, the respondent argued that the razor, being a composite article of plastic and iron rod, did not meet the conditions of the conditional notification and thus was not eligible for the exemption. The Tribunal examined the arguments presented by both parties and reviewed relevant legal precedents.

The Tribunal referenced the Supreme Court's decision in the Jeep Flashlight case, which clarified that articles made of plastic must be entirely composed of plastic to qualify for the exemption. Despite attempts to distinguish the present case from the Jeep Flashlight case based on changes in the tariff item, the Tribunal found that the composition of the razor did not meet the criteria outlined in Notification No. 182/82-C.E. The Tribunal emphasized that the proviso to the notification required articles to be produced solely from specified materials falling under sub-item (1) of Item 15A of the Tariff. As the razors contained both plastic and iron rod, they did not fulfill the conditions for exemption under the notification.

Additionally, the Tribunal rejected the appellants' reliance on a previous decision involving fiber glass products, emphasizing that the Supreme Court's ruling in the Jeep Flashlight case took precedence. Ultimately, the Tribunal upheld the decision of the Collector of Central Excise (Appeals) and dismissed the appeal, ruling that the plastic razors manufactured by the appellants were not eligible for the benefit of exemption under Notification No. 182/82-C.E.