1993 (10) TMI 180 - AT - Central Excise

Summary

Issues: Classification of goods under Tariff Item 15A, applicability of exemption Notification No. 68/71, imposition of penalty, time-barred demand, liability to pay excise duty on acrylic plastic bangles - tubes.

Classification of Goods under Tariff Item 15A:
The case revolved around the classification of acrylic plastic bangles - tubes under Tariff Item 15A, leading to a demand for duty and imposition of penalty on the appellants. The appellants, M/s. Oswal Products, contended that the goods should not be classified under Tariff Item 15A. They argued that the expression "articles made of plastic" does not include materials like monomer that undergo a polymerization process in manufacturing plastic goods. The appellants cited judgments from the Gujarat High Court and the Rajasthan High Court supporting their position. The Tribunal noted that the judgments held that goods made from monomer undergoing polymerization do not attract excise duty under Tariff Item 15A. Consequently, the Tribunal ruled in favor of the appellants, stating that they were not liable to pay excise duty on the subject goods.

Applicability of Exemption Notification No. 68/71:
The appellants also claimed the benefit of exemption under Notification No. 68/71, dated 29-5-1971, as an alternative argument. The Tribunal did not delve into this aspect as the primary issue of classification under Tariff Item 15A was resolved in favor of the appellants. Therefore, no opinion was expressed on the applicability of the exemption notification.

Time-Barred Demand and Imposition of Penalty:
The appellants raised a contention that a part of the demand was time-barred as it was issued beyond the statutory 6-month period. They argued that there was no willful misstatement or suppression to evade duty. However, the Tribunal did not address this argument explicitly in its judgment as the primary issue of classification was determinative of the case outcome.

Liability to Pay Excise Duty on Acrylic Plastic Bangles - Tubes:
The Tribunal considered the technological process involved in manufacturing acrylic plastic bangles and tubes from monomer undergoing polymerization. Citing a previous Tribunal decision and the judgments of the Gujarat and Rajasthan High Courts, the Tribunal concluded that the goods fell outside the scope of excise duty liability under Tariff Item 15A. The Tribunal emphasized that the appellants' manufacturing process did not attract excise duty as per the legal precedents cited.

Conclusion:
Ultimately, the Tribunal allowed the appeal in favor of the appellants, providing consequential relief. The decision was based on the classification issue, where the Tribunal held that the appellants were not liable to pay excise duty on the acrylic plastic bangles - tubes. The judgment highlighted the importance of the manufacturing process and the legal interpretation of "articles made of plastic" in determining excise duty liability.