1998 (3) TMI 218 - AT - Central Excise

Summary

Issues: Classification of products obtained by slitting polyester films into thin strips by cutting machine under Central Excise Tariff.

In the judgment delivered by the Appellate Tribunal CEGAT, New Delhi, the matter revolved around the classification of products produced by slitting polyester films into thin strips by a cutting machine under the Central Excise Tariff. The appellants contended that the goods should be classified under Item No. 15 of the Central Excise Tariff, while the Revenue argued for classification as yarn under Item No. 18 for a specific period and under Item No. 18-II(iii) thereafter.

The tribunal considered the main argument put forth by the appellants, stating that the slitting process of polyester metallised sheets did not constitute the manufacture of man-made yarn. However, upon examination of the facts and relevant tariff entries, it was found that the goods produced through slitting were indeed metallic yarns, as clearly indicated in the machine catalogue. The tribunal highlighted that the raw material used was metallised polyester film, and the end product was metallic yarn, distinct in use, name, and character.

Referring to a previous Supreme Court decision, the tribunal emphasized that the process of slitting metallised yarn from metallised polyester involved a manufacturing process, as affirmed by the Apex Court. The tribunal also noted that the metallic yarn had been specifically included in the Central Excise Tariff from a certain date, indicating that when goods meet the requirements of a specific tariff entry, they should be considered manufactured products for excise levy purposes.

Regarding the changes in the Tariff over time, the tribunal acknowledged the specific mention of man-made metallic yarn in the Tariff Entry from a particular date, and based on the processes involved, upheld the view taken by the lower authorities. Ultimately, after considering all relevant facts and arguments, the tribunal found no grounds to interfere with the decision of the Collector, Central Excise (Appeals), Bombay, and consequently, the appeal was rejected.

Overall, the judgment underscores the importance of specific tariff entries, the manufacturing process involved in producing metallic yarn from metallised polyester, and the classification criteria under the Central Excise Tariff, ultimately leading to the rejection of the appellant's appeal.