1997 (11) TMI 291 - AT - Central Excise

Summary

Issues:
1. Claim of duty exemption under specific notification entries for manufacturing plastic articles.
2. Allegation of misstatement with intent to evade duty.
3. Interpretation of the process of manufacture detailed in the declarations.
4. Examination of the chemical compatibility of materials used in manufacturing.

Analysis:

1. The appellants claimed duty exemption under specific entries of Notification No. 132-C.E., dated 1-3-1986, for manufacturing plastic articles. The dispute arose regarding the classification of acrylic sheets made from cellulose acetate, as the chemical examiner opined that acrylic plastic and cellulose acetate plastic were distinct materials, leading to a show cause notice being issued invoking the extended period.

2. The appellant argued that the declarations clearly detailed the manufacturing process, supported by certificates from sector and range officers verifying the correctness of the exemption claimed. The appellant contended that even the invoices specified the acrylic sheets as being made from cellulose acetate, refuting any misstatement or suppression of facts.

3. On examination, it was found that the declarations did not align the manufactured goods specifically with the entries claimed for exemption. The process of manufacture described in the declarations was vague, mentioning the use of imported duty-paid plastic scrap without specifying the inclusion of acrylic scrap. The chemical examiner's findings supported the incompatibility of manufacturing acrylic sheets from cellulose acetate.

4. The Tribunal concluded that the declarations and the process of manufacture did not support the appellant's claim of making full and correct declarations. The trade nomenclature of the products did not affect their classification based on chemical identification. The Tribunal upheld the allegation of wilful misstatement with the intent to evade duty, leading to the invocation of the extended period for demand determination. Consequently, the impugned order confirming the duty demand and imposing a penalty was upheld, and the appeal was dismissed.