1992 (8) TMI 166 - AT - Central Excise

Summary

Issues Involved:
1. Classification of chemical tanks, reaction vessels, and pipes made of plastics under the Central Excise Tariff Act, 1985.
2. Demand of duty and imposition of penalty.
3. Mis-declaration of goods.
4. Applicability of exemption under Notification 53/88-C.E., dated 1-3-1988.

Detailed Analysis:

1. Classification of Chemical Tanks, Reaction Vessels, and Pipes:
The primary issue revolves around whether the chemical tanks and reaction vessels manufactured by the appellants should be classified under sub-heading No. 3926.90 as "other articles of plastics" or under sub-heading No. 3925.10 as "Builders' ware of plastics, not elsewhere specified or included." The appellants contended that their products are not standard-sized tanks used for storage of water, but are custom-made according to the specifications of their suppliers, primarily for industrial use. They argued that their products do not fit the description of "Builders' ware" as defined under Heading 39.25. The tribunal held that for goods to be classified under Heading 39.25, it must be established that they are "Builders' ware." However, no evidence was provided to show that the tanks and reaction vessels were used in building activities. The tribunal concluded that the appellants' products should be classified under sub-heading 3926.90.

2. Demand of Duty and Imposition of Penalty:
In Appeal No. E/3153/89-C, the Additional Collector demanded a duty of Rs. 4,97,883/- and imposed a penalty of Rs. 25,000, besides confiscating 122 plastic reservoirs. The tribunal noted that the demand and penalty were based on the classification of the goods under sub-heading 3925.10. Since the tribunal found that the goods were not "Builders' ware," the demand for duty and the imposition of the penalty were not justified. Consequently, the orders demanding duty and imposing penalties were set aside.

3. Mis-declaration of Goods:
The appellants were accused of mis-declaration for not providing a clear description of the goods, which allegedly prevented the authorities from determining the correct classification. The tribunal observed that the appellants described the goods in their declarations and invoices as they were bought and sold. The tribunal found that the authorities themselves had variously described the same goods, indicating a lack of clarity on their part. The tribunal ruled that the allegation of mis-declaration was not substantiated, and thus, the appellants were not guilty of mis-declaration.

4. Applicability of Exemption under Notification 53/88-C.E., Dated 1-3-1988:
The appellants claimed exemption from duty under Notification 53/88-C.E., dated 1-3-1988, arguing that their products were not "Builders' ware" and thus fell outside the scope of Heading 39.25. The tribunal examined the specific purposes for which the appellants' Spirall Tanks were manufactured, noting their suitability for handling chemicals, slurries, and pastes, and their use in pharmaceutical and food industries. The tribunal concluded that the products were not "Builders' ware" and were correctly classified under sub-heading 3926.90, thereby entitling the appellants to the claimed exemption.

Conclusion:
The tribunal allowed the appeals, setting aside the orders of the lower authorities. The tribunal determined that the goods were not "Builders' ware" and should be classified under sub-heading 3926.90. Consequently, the demand for duty, imposition of penalties, and allegations of mis-declaration were dismissed, granting consequential relief to the appellants.