1997 (2) TMI 258 - AT - Central Excise

Summary

Issues:
Classification of goods for duty liability based on chemical designing process.

Detailed Analysis:
The appeal was filed by M/s. Premier Mills Ltd. against the order-in-original passed by the Collector of Central Excise, Coimbatore. The issue revolved around the duty liability on cylindrical tubes with pentagonal pores after undergoing a chemical designing process. The appellants were involved in fabric printing and imported plain cylindrical tubes with pentagonal pores. The process involved applying a light-sensitive lacquer on the pores to form a chemical coat, transferring a design onto the coated screen through sensitization, and then printing the design onto fabrics using the screen. The adjudicating authority considered this process as manufacturing, creating a new product from plain nickel rollers to designed nickel rollers.

The appellants failed to appear for the hearing, and the matter proceeded based on the notice issued in 1987. The appellants argued that the chemically designed screens were not marketable commodities, citing various legal precedents. The Tribunal noted that the transfer of design from film to the coated screen was specific to the designs to be printed and deemed the coated screen not marketable. The Tribunal distinguished the present case from those involving rubberized metal rollers, emphasizing that no rubberizing or engraving process was involved, only sensitization for design transfer.

In analyzing the marketability aspect, the Tribunal referenced the Supreme Court's decision in Bhor Industries Ltd. v. Collector of Central Excise and Andhra Pradesh State Electricity Board v. Collector of Central Excise. While marketability is essential for dutiability, the Tribunal found the sensitized screen with transferred design not to be a marketable commodity for central excise levy purposes. The Tribunal criticized the lack of discussion by the Collector on the classification and market identification of the goods. Consequently, the Tribunal concluded that the designed nickel screen, as produced through sensitization, was not marketable, overturning the Collector's decision.

In light of the above analysis, the Tribunal allowed the appeal, ruling in favor of M/s. Premier Mills Ltd. and ordering accordingly.