1991 (1) TMI 266 - AT - Central Excise

Summary

Issues Involved:
1. Eligibility for concession under Notification No. 175/86 dated 1-3-1986.
2. Classification of the product 'Apcolite Universal Stainer'.

Issue-wise Detailed Analysis:

1. Eligibility for Concession under Notification No. 175/86:

The appellants challenged the order-in-appeal regarding the classification of 'Apcolite Universal Stainer' and their eligibility for exemption under Notification No. 175/86. The learned Collector of Central Excise, Bombay, held that the appellants are eligible for the benefit of exemption as envisaged under Notification No. 175/86 and set aside the Assistant Collector's order which denied this benefit. The Revenue filed an appeal against this decision. The appellant-assessee, a small scale industry, argued that they are a separate legal entity from M/s. Asian Paints (India) Ltd., and thus eligible for the exemption. The Collector's order granting SSI exemption under Notification No. 175/86 was upheld, as there was no evidence to suggest that the assessee's concern was a dummy concern. The cited rulings supported the assessee's claim, and the Revenue's appeal was dismissed.

2. Classification of the Product 'Apcolite Universal Stainer':

The appellants classified 'Apcolite Universal Stainer' under Chapter sub-heading 3213.00 as a 'Modifying Tint' attracting a 10% ad valorem duty. The Assistant Collector, however, reclassified it under sub-heading 3204.19 attracting a 20% duty. The appellants contended that their product is a modifying tint used for tinting paints to obtain a wide range of shades, and not a synthetic organic colouring matter. They relied on Chapter Note 2 of Chapter 32 of CET 1985 and various judicial decisions, arguing that the most specific heading should be preferred. They also pointed out that similar products by M/s. Asian Paints were classified under Chapter 3213.00. The affidavits and technical literature supported their claim that the product is understood in trade parlance as a modifying tint.

The Tribunal considered the submissions and materials, including the definitions from authoritative works and affidavits from dealers. It was noted that the product is used for modifying specific quantities of white/base white paints and not in the manufacturing process. The product's classification as a modifying tint was supported by trade parlance and the affidavit of Shri V.M. Bhavdekar. The Tribunal concluded that the product is classifiable under sub-heading 3213.00, and the appeal of the appellants was allowed.

Conclusion:

The Tribunal upheld the Collector's order granting SSI exemption under Notification No. 175/86 and dismissed the Revenue's appeal. It also concluded that 'Apcolite Universal Stainer' should be classified under sub-heading 3213.00, allowing the appellants' appeal on classification.