1995 (11) TMI 203 - AT - Central Excise

Summary

Issues:
Classification of animal glue, Proper sanction by the Collector, Correct classification under the Tariff, Interpretation of Trade Notices, Benefit of Notifications under Section 11C.

Classification of Animal Glue:
The appeal involved the classification of animal glue manufactured from tannery waste products under the Central Excises and Salt Act, 1944. The dispute arose when the Department sought to classify the goods under a different item than what the respondent had classified them under. The Asstt. Collector initially dropped the proceedings based on small scale exemption eligibility. However, after a review, the Collector of Central Excise (Appeals) directed reclassification. The Asstt. Collector then classified the animal glue as high polymer resins under a different Tariff item. The respondent appealed, arguing that their product fell under a specific Tariff item as per Trade Notices and Notifications.

Proper Sanction by the Collector:
A preliminary objection was raised regarding the sanction by the Collector for the appeal. The respondent's advocate argued that the sanction did not meet the requirements of the Act. The JDR for the appellant contended that the sanction was proper and referred to a Supreme Court decision to support this claim. Upon inspection of the file and considering the Supreme Court's decision, it was concluded that the sanction met the Act's requirements, allowing the arguments on the case's merits to proceed.

Correct Classification under the Tariff:
The appellant argued that post-1982 Budget changes, the goods were correctly classified under a specific Tariff item, supported by relevant tariff entries, Trade Notices, and Notifications providing exemptions. The respondent, however, maintained that the goods were correctly classified under a different Tariff item, referencing the show cause notice and Trade Notices to support their stance.

Interpretation of Trade Notices:
The Collector of Central Excise (Appeals) had relied on a Trade Notice to support the reclassification of the goods. However, the Tribunal found that the Trade Notice, which stated that glue flakes obtained from bones were classifiable under a specific Tariff item, was not applicable as the animal glue could also be made from hides and skins. The Tribunal disagreed with the strict interpretation of the Trade Notice and emphasized considering all relevant factors for proper classification.

Benefit of Notifications under Section 11C:
The Tribunal noted that the benefit of a specific Notification had already been extended to the respondent under Section 11C of the Act. After considering all relevant aspects, the Tribunal accepted the appeal filed by the Revenue, vacated the order of the Collector of Central Excise (Appeals), and confirmed the order passed by the Asstt. Collector of Central Excise.

This detailed analysis covers the issues of classification, proper sanction, correct Tariff classification, interpretation of Trade Notices, and the benefit of Notifications under Section 11C as addressed in the legal judgment.