1989 (11) TMI 172 - AT - Central Excise

Issues Involved:
1. Classification of the product under the correct Tariff Item.
2. Validity of the orders passed by the lower authorities.
3. Consideration of the base material and its implications on classification.
4. Relevance of the percentage of PVC content in the final product.
5. Request for remand for reconsideration under Item 22B.

Detailed Analysis:

1. Classification of the Product under the Correct Tariff Item:

The appellants sought classification of their product under Tariff Item 68, whereas the lower authorities classified it under Tariff Items 19(III) and 22(III). The Assistant Collector based his findings on a chemical report, concluding that the base material was man-made fabrics, thus classifying the product under Tariff Items 19(III) and 22(III). The Collector of Customs (Appeals) upheld this classification, relying on dictionary meanings and explanatory notes, and rejected the appellants' contention that the product should be classified under Tariff Item 68.

2. Validity of the Orders Passed by the Lower Authorities:

The appellants challenged the correctness of the orders passed by the lower authorities, arguing that their product could not be considered a coated product under any circumstances. They contended that the product, comprising more than 75% foamed plastic material (PVC Compound) and less than 23% man-made viscose yarn or fibre, should not be classified under Items 19 or 22. They also argued that the lower authorities relied on citations and technical dictionary terms without providing them an opportunity to contest these references.

3. Consideration of the Base Material and Its Implications on Classification:

The lower authorities held that the base material was fabric, thus classifying the product under Tariff Items 19(III) and 22(III). The appellants argued that the base material, being staple knitted material, should not be considered fabric for classification purposes. They emphasized that the end product, not the raw material, should determine the excise duty classification.

4. Relevance of the Percentage of PVC Content in the Final Product:

The appellants highlighted that the product contained more than 75% PVC content, which should preclude its classification as man-made fabric under Item 22. They relied on a test report indicating that the product was predominantly PVC, arguing that the higher PVC content should dictate its classification under Item 68.

5. Request for Remand for Reconsideration under Item 22B:

The Departmental Representative argued for remand to reconsider classification under Item 22B. However, the Tribunal referred to the case of Collector of Central Excise, Hyderabad v. Fenoplast (P) Ltd., where it was held that the Tribunal cannot empower an assessing authority to decide alternate classification if it cannot be determined under the law. The Tribunal noted that the finished product was not known as textile fabric and thus could not be classified under Item 22B.

Conclusion:

The Tribunal concluded that the final product produced by the appellants should be classified under Item 68, as the base material, even if considered fabric, did not predominate in weight. The Tribunal rejected the Department's request for remand for reconsideration under Item 22B, aligning with the reasoning in the Fenoplast case. Consequently, the appeal was allowed with consequential relief.

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