1987 (1) TMI 351 - AT - Central Excise

Summary

Issues:
1. Classification of product - whether the coated surgical pink cloth is an excisable product falling under Item 60-CET.
2. Interpretation of Item 60 CET - whether the product in question falls within the scope of "Adhesive tapes, all sorts, not elsewhere specified."
3. Relevance of Finance Minister's speech - whether the Finance Minister's speech justifying the introduction of Item 60 CET is relevant for interpreting the scope of the item.

Analysis:
The case involved a dispute regarding the classification of a product manufactured by the respondents, which was a coated surgical pink cloth used in the production of Band Aid medicated dressings. The department contended that the product was an excisable item falling under Item 60-CET, while the respondents argued that it did not fall within the scope of Adhesive Tapes under Item 60 CET. The Assistant Collector issued show cause notices demanding duty for various periods, which were confirmed in orders dated 26-7-1982 and 26-8-1982. The respondents appealed, and the Collector (Appeals) allowed the appeals, setting aside the demands. Subsequently, the Collector of Central Excise filed an appeal against the order.

During the hearing, the department argued that the product should be classified as Adhesive Tape under Item 60 CET, while the respondents relied on a previous Tribunal decision to support their position. The Tribunal referred to the previous decision involving Zinc Oxide Plasters and held that medicated tapes/plasters would not fall under Item 60 CET, as they were considered medical dressings due to their curative and protective properties.

The department contended that the Finance Minister's speech during the introduction of Item 60 CET supported their interpretation, while the respondents argued that the speech indicated a different intent. The Tribunal considered Supreme Court decisions emphasizing the relevance of the Finance Minister's speech in interpreting legislative amendments and concluded that the product in question was not covered by Item 60 CET.

Ultimately, the Tribunal upheld the decision of the Collector (Appeals) and dismissed the appeals, holding that the coated surgical pink cloth was not classified under Item 60 CET as Adhesive Tape. The judgment highlighted the importance of interpreting legislative intent and utilizing relevant precedents to determine the appropriate classification of goods for excise duty purposes.