1996 (4) TMI 298 - AT - Central Excise

Summary

Issues:
- Classification of products known as 'sequins' made from PVC Films under Notification No. 53/88, dated 1-3-1988 for exemption eligibility.

Detailed Analysis:

1. Classification and Eligibility for Exemption:
The appeal in question challenged Order-in-Appeal No. SKM-195/89-BI, focusing on whether 'sequins' made from PVC Films are eligible for exemption under Notification No. 53/88. The Revenue contended that sequins fall under Chapter 3926.90 but are not eligible for exemption as they are made from PVC Film, not material under Heading No. 39.01 to 39.15 of CETA, 1985. The Respondents argued that sequins made from PVC Films, an intermediate product from PVC Resins under Heading 3904.10, qualify for exemption. The Tribunal found that sequins made from PVC Films, originating from duty-paid PVC Resins, fulfilled the conditions of the Notification. The decision was supported by a clarification from the CBEC and a previous Tribunal ruling.

2. Precedents and Clarifications:
The Tribunal referred to a CBEC letter clarifying that products made from duty-paid bare films manufactured from materials under Heading Nos. 39.01 to 39.15 are considered duty paid. Additionally, a prior Tribunal decision (1990 (50) E.L.T. 533) supported the interpretation that the emergence of intermediate products does not disqualify exemption eligibility. The case cited by the Revenue (Rajasthan Spg. & Wvg. Mills Ltd. v. C.C.E., 1995 (77) E.L.T. 474) was deemed distinguishable as it involved a different classification issue and did not impact the current case's outcome.

3. Conclusion and Decision:
Ultimately, the Tribunal rejected the Revenue's appeal and upheld the impugned order, affirming that 'sequins' made from PVC Films were eligible for exemption under Notification No. 53/88. The decision was based on the duty-paid nature of the raw materials and the interpretation that intermediate products do not disqualify finished goods from exemption benefits. The Tribunal's decision was supported by legal precedents and clarifications from the CBEC, emphasizing the importance of the origin and classification of materials in determining exemption eligibility under relevant notifications.