1989 (6) TMI 217 - AT - Central Excise

Summary

Issues: Classification of duty paid commercial plywood coated with phenol formaldehyde resin, classification of paper faced laminated plywood and block board

In this judgment delivered by the Appellate Tribunal CEGAT, New Delhi, the appellants, who manufacture commercial plywood coated with duty paid Phenol Formaldehyde Resin, paper laminated plywood, and block board, contested the classification of their products under the Central Excise Tariff. The lower authorities had classified the products under different tariff items, which the appellants argued were non-excisable. The tribunal considered whether the application of phenol formaldehyde resin and pressing the plywood at 100^0C amounted to a substantial process resulting in the emergence of a new commercial product. It was debated whether the value addition and distinct market usage of the processed plywood warranted a new classification. The tribunal held that the application of phenol formaldehyde resin on commercial plywood did result in the emergence of a new commercial product, distinct from the original plywood, and thus upheld the department's view on the classification of these items under Tariff Item 4408.90.

Regarding the classification of paper faced laminated plywood and block board pasted with plasticised paper, the lower authorities had erroneously classified them as decorative plywood based on their perceived decorative usage. The tribunal disagreed with this classification, citing industry standards and expert advice from the Indian Plywood Industries Research Institute. The tribunal noted that the products did not meet the criteria for decorative plywood as defined in industry standards, and therefore set aside the classification as decorative plywood. Instead, the tribunal accepted the alternative plea put forward by the appellants' advocate, classifying the paper faced laminated plywood under Heading 4410.90 as articles of wood not elsewhere specified - Others. The tribunal partially allowed the appeal in these terms, correcting the classification of the paper faced laminated plywood and block board.

The judgment highlighted the importance of considering industry standards and expert advice in determining the classification of goods under the Central Excise Tariff. It emphasized the need for products to meet specific criteria and definitions within the industry to be classified accurately. The tribunal's decision underscored the significance of value addition, distinct market usage, and adherence to industry standards in classifying goods for excise duty purposes, ensuring clarity and consistency in the classification process.