1990 (7) TMI 211 - AT - Central Excise

Issues Involved:
1. Classification of Technical Gelatin and Glue Flakes under Item 15A(1) of the Central Excise Tariff (CET).
2. Eligibility for excise duty exemption under Notification No. 234/82 dated 1-11-1982 for Technical Gelatin and Glue Flakes.

Issue-Wise Detailed Analysis:

1. Classification of Technical Gelatin and Glue Flakes under Item 15A(1) of the Central Excise Tariff (CET):

The Assistant Collector of Central Excise, Jalandhar, classified Technical Gelatin and Glue Flakes as "Other high Polymers" under Item 15A(1) of the CET. This classification was based on the chemical examiner's opinion that these products were in the nature of High Polymers. The Collector (Appeals) upheld this classification.

The appellants argued that Technical Gelatin and Glue Flakes are bone products and should benefit from the excise duty exemption as per the Supreme Court's judgment in Collector of Central Excise v. Protein Products of India -1988 (38) E.L.T.749. The Counsel for the appellants contended that Item 15A of the CET should only include synthetic or artificial high polymers, not natural high polymers like Gelatin and Glue Flakes.

The Revenue, however, relied on "The Encyclopedia of Chemistry" and "The Encyclopedia of Polymer Science and Technology," which stated that Gelatin and Glue are complex mixtures of collagen degradation products with molecular weights ranging from 30,000 to 80,000 or higher. Based on these molecular weights, the products were rightly classified as High Polymers under Item 15A, CET.

The Tribunal considered the submissions and noted that during the period material to the present dispute, the amended entry of Item 15A was in force, which included the term "High Polymers." The Tribunal referred to "The Condensed Chemical Dictionary," which defined high polymers as organic macromolecules with molecular weights ranging from about 5,000 into the millions. Given that Gelatin and Glue have molecular weights exceeding 5,000, they were considered high polymers.

The Tribunal also examined previous decisions, such as Advani Oerlikon Ltd. v. Collector of Customs, Bombay [1986 (23) E.L.T. 179 (Tribunal)], which held that cellulose powder, a natural high polymer, was classifiable under Item 15A(1) of the CET. Similarly, in Collector of Customs v. Starlite Corporation - 1988 (38) E.L.T. 627 (Tribunal), it was held that the term "Other High Polymers" in Item 15A(1), CET, covered both synthetic and natural high polymers.

Based on these considerations, the Tribunal concluded that the expression "Other High Polymers" in Item 15A(1) of the CET includes natural high polymers. Therefore, Technical Gelatin and Glue Flakes were correctly classified under Item 15A(1) as "Other High Polymers."

2. Eligibility for Excise Duty Exemption under Notification No. 234/82 dated 1-11-1982 for Technical Gelatin and Glue Flakes:

The Counsel for the appellants argued that the eligibility of "Ossein" to the benefit of Notification No. 234/82 was not in issue before the Tribunal. The arguments were confined to Technical Gelatin and Glue Flakes. The Counsel contended that these products, being bone products, should be entitled to the benefit of the notification.

The Tribunal noted that the Supreme Court's judgment in the Protein Products case pertained to the pre-1982 budget period. If, as a result of the 1982 budget, the subject products are covered by the expression "Other High Polymers" in Item 15A, CET, then they would not remain within the scope of the residuary entry Item 68 to be eligible for the benefit of Notification No. 234/82.

The Tribunal further examined the argument that the expression "Other High Polymers" in Item 15A(1), CET, should only include synthetic or artificial high polymers. However, the Tribunal found that the tariff entry covered both synthetic and natural products, including natural high polymers.

Based on these findings, the Tribunal concluded that Technical Gelatin and Glue Flakes, being classified as "Other High Polymers" under Item 15A(1) of the CET, were not eligible for the excise duty exemption under Notification No. 234/82.

Conclusion:

The appeal was dismissed, and the classification of Technical Gelatin and Glue Flakes under Item 15A(1) of the CET as "Other High Polymers" was upheld. Consequently, these products were not eligible for the excise duty exemption under Notification No. 234/82 dated 1-11-1982.

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