1988 (4) TMI 299 - AT - Central Excise

Summary

Issues:
Classification of composite containers under Central Excise Tariff, application of commercial parlance test, reliance on Supreme Court judgments, interpretation of Tariff entries.

Classification of Composite Containers:
The main issue in the judgment was the classification of a product known as composite containers under the Central Excise Tariff. The appellant sought to classify the product under T.I. 17(4)/17(3) post-1983 Budget to avail benefits under specific notifications. However, the department had classified the product under T.I. 68 of the Central Excise Tariff. The appellant relied on the commercial parlance test for classification, arguing that the composite containers should be classified under 17(4)/17(3) based on how they are understood in the trading and consuming community. The appellant cited the Supreme Court's decision in Delhi Cloth and General Mills v. State of Rajasthan to support this argument.

Application of Commercial Parlance Test:
The appellant contended that the commercial parlance test should determine the classification of the composite containers. They argued that the composite containers satisfied the description of "other packing containers" under sub-item 17(4)/17(3) and should be classified accordingly. The appellant relied on the Supreme Court's judgment in Indian Aluminium Ltd. v. Union of India to support their argument that the composite containers fell within the broad description of the Tariff entry. They also referred to Indian Standard No. 11357-1985 and the Schedule of industries under the Industries (Development and Regulation) Act, 1951 to demonstrate how the product is known commercially.

Reliance on Supreme Court Judgments:
The appellant heavily relied on Supreme Court judgments to support their argument for the classification of composite containers. They cited precedents where the Supreme Court emphasized that the commercial parlance test should determine the classification of products under taxation tariffs. The appellant argued that the Tribunal had misdirected itself by not applying the commercial parlance test in the classification of the composite containers.

Interpretation of Tariff Entries:
The Tribunal analyzed the arguments presented by both sides and acknowledged the settled classification of the product by the Supreme Court. However, the Tribunal expressed doubts regarding whether the composite containers could be considered known commercially as paper containers under the Tariff entry. The Tribunal highlighted that the Indian Standard Specifications and notifications under the Industries (Development and Regulation) Act, 1951 were not definitive guides for the commercial parlance test. Ultimately, the Tribunal rejected the appellant's classification argument and upheld the department's classification of the composite containers under T.I. 68 of the Central Excise Tariff.

In conclusion, the judgment delved into the classification of composite containers under the Central Excise Tariff, emphasizing the application of the commercial parlance test, reliance on Supreme Court judgments, and the interpretation of Tariff entries to determine the appropriate classification of the product.