1996 (9) TMI 299 - AT - Central Excise

Summary

Issues:
1. Classification of fibreglass reinforced plastic sheet under Central Excise Tariff
2. Interpretation of test certificate from National Test House regarding Modulus of Elasticity
3. Validity of penalty imposed under Rule 173Q of Central Excise Rules, 1944

Analysis:

Classification Issue:
The case involved the classification of fibreglass reinforced plastic sheet under the Central Excise Tariff. The appellants contended that their product should be classified under Tariff Item 68 instead of Tariff Item 15A(2). The appellants argued that new grounds can be raised at the appeal stage, citing the judgment in Jeep Flash Light Industries Ltd. The Tribunal, however, held that the issue of classification was not the subject of the remand and should be confined to the clarification received from the National Test House. The Tribunal rejected the plea to admit arguments on classification, maintaining that the case was remanded for de novo adjudication only on the clarification aspect.

Interpretation of Test Certificate Issue:
The primary issue revolved around the interpretation of the test certificate from the National Test House regarding the Modulus of Elasticity in tension of the fibreglass reinforced plastic sheet. The West Regional Bench of the Tribunal remanded the case for de novo consideration due to contradictory remarks in the test certificate. The National Test House clarified that the Modulus of Elasticity was 36000 kgf/cm2. The appellants disputed this clarification, arguing that the elasticity of their product could not be that high. They also challenged the applicability of the Explanation to Notification No. 149/82-C.E., which was struck down by the Bombay High Court. The Department contended that the clarification from the National Test House was unambiguous and conclusive, leading to the conclusion that the product was rigid plastic sheets. The Tribunal, after analyzing the submissions, held that there was no mistake or ambiguity in the certificate and that the product manufactured by the appellants was indeed rigid plastic sheet.

Penalty under Rule 173Q Issue:
The ld. Additional Collector had imposed a personal penalty of Rs. 20,000 under Rule 173Q of the Central Excise Rules, 1944. The penalty was confirmed in the de novo proceedings. However, the Tribunal's decision upholding the classification of the product as rigid plastic sheet implied that the penalty was justified based on the demand amounting to Rs. 2,37,476.36. The Tribunal's rejection of the appeal meant that the penalty under Rule 173Q was upheld along with the demand confirmed by the ld. Additional Collector.

In conclusion, the Tribunal upheld the impugned order, rejecting the appeal on the grounds of classification, interpretation of the test certificate, and the validity of the penalty imposed under Rule 173Q of the Central Excise Rules, 1944.