1986 (7) TMI 300 - AT - Central Excise

Summary

Issues: Classification of manufactured products under Tariff Item 15A(2) CET vs. Tariff Item 68 CET

In this case, the primary issue before the Appellate Tribunal was the classification of three products manufactured by the respondents under the Central Excise Tariff. The products in question were identified as (1) MAT - LAC - HD - 50 MICRONS, (2) MAT - LAC - FL - 50 MICRONS, and (3) LAC - HD - 75 MICRONS. The appellants contended that these products, although lacquered, should still be classified as Polyester Film falling under Tariff Item 15A(2) CET. They cited a Trade Notice and a letter from the Central Board of Customs & Excise to support their argument. However, the Assistant Collector rejected this classification, stating that the products had undergone a manufacturing process that changed their identity from Polyester Film. He classified the goods under Tariff Item 68 and denied the appellants' claim for classification under Tariff Item 15A(2) with exemption Notification No. 231/82-CE.

The appellants then appealed to the Collector (Appeals), who allowed the appeal. The Collector determined that the products were indeed polyester films even after coating. Test reports on similar products confirmed that the products were plastic film made of polyester with a thickness less than 0.25mm. The Collector concluded that the lacquering process did not change the essential nature of the products, as acknowledged by an expert in the field. The appeal was allowed, setting aside the Assistant Collector's order and directing the classification of the products under Tariff Item 15A(2) with the benefit of Notification No. 231/82.

Subsequently, the Revenue filed an appeal before the Appellate Tribunal challenging the Collector's order. The Revenue argued that the products should be classified under Tariff Item 68 as photographic film, losing their identity as polyester film after coating. The Tribunal considered the arguments from both sides, reviewed the manufacturing process, test reports, and expert affidavit. They found it difficult to accept that the products lost their identity as Polyester Films after lacquering. Referring to relevant Board letters and Trade Notices, the Tribunal concluded that the goods were correctly classifiable under Tariff Item 15A(2) CET. Therefore, the appeal by the Revenue was dismissed, affirming the classification under Tariff Item 15A(2) CET for the manufactured products.