1994 (1) TMI 144 - AT - Central Excise

Summary

Issues:
Classification of Master Batches under Central Excise Tariff Act, classification of LDPE Compound, applicability of Board's clarification on coloured plastic granules, doctrine of merger in Tribunal's decision, classification of goods based on inorganic or organic pigments.

Classification of Master Batches under Central Excise Tariff Act:
The appellants contended that the Master Batches should be classified under Chapter 39 based on Notes (1), (3), and (6) of Chapter 39, arguing that Master Batches cannot be considered as manufactured products under the Central Excise Tariff Act. They claimed that no further duty was leviable on the disputed products as the PVC granule in the Master Batches was already duty paid. The Tribunal noted the previous decision against the appellant but emphasized that no recovery would be permissible for the period before 1-3-1986 due to discrepancies in the show cause notice issued by the Department. The appellant cited relevant case law to support their argument.

Classification of LDPE Compound:
The lower authorities failed to address the classification of LDPE Compound (Black Cable Sheathing Compound) consisting of Carbon Black with LDPE resin and other additives. The Tribunal remanded the matter back to the Assistant Collector for a fresh examination and a finding in respect of the LDPE Compound, ensuring due process and personal hearing for the appellants.

Applicability of Board's Clarification on Coloured Plastic Granules:
The appellant argued that the Board's clarification, communicated through a Trade Notice, stated that coloured plastic granules from plain colourless plastic granules did not amount to manufacture. They contended that the lower authorities' classification of coloured Master Batches under sub-heading 3206.90 was erroneous based on this clarification. The respondent, however, maintained that the disputed goods were Master Batches, not coloured plastic granules, and should be classified under sub-heading 3204.19 or 3206.90, depending on the type of pigment used.

Doctrine of Merger in Tribunal's Decision:
The respondent argued that the Tribunal's decision in a previous case was binding on the appellants even for the period before 1-3-1986, invoking the Doctrine of Merger. They contended that the lower authorities' decisions should be deemed to have merged with the Tribunal's decision. The respondent emphasized the relevance of the show cause notice issued disputing the classification claimed by the appellant.

Classification of Goods Based on Inorganic or Organic Pigments:
The respondent asserted that the goods in question should be classified under sub-heading 3204.19 if based on inorganic pigment and under sub-heading 3206.90 if based on inorganic colouring matter, as per Note 2 to Chapter 32. They argued against the appellant's contentions and pleaded for the rejection of the appeal based on the correct classification criteria.

In conclusion, the Tribunal set aside the impugned order and allowed the appeal by way of remand, directing a fresh examination of the LDPE Compound classification and a finding in accordance with the law. The detailed analysis of each issue involved in the judgment highlights the complexities of classification under the Central Excise Tariff Act and the significance of legal interpretations and precedents in such matters.