1998 (5) TMI 107 - AT - Central Excise

Summary

Issues: Classification of HDPE Tapes for Central Excise Duty

Analysis:
1. Classification of HDPE Tapes: The issue at hand revolves around the correct classification of HDPE tapes for the purpose of Central Excise duty. The appellant, engaged in manufacturing HDPE tapes from HDPE granules, filed a classification list under sub-heading 3926.90, seeking a nil rate of duty under Notification 53/88. However, the Assistant Commissioner classified the product under sub-heading No. 5406.90, leading to a demand for duty. The Collector (Appeals) later allowed the appeal, arguing that HDPE tapes, being manufactured from HDPE granules, should not be considered as synthetic textile materials falling under Heading No. 54.06.

2. Interpretation of Legal Provisions: The Department contended that HDPE tapes below 5mm width, used in weaving sacks, should be classified under sub-heading No. 5406.90, as they are considered textile material falling within Chapter 54. The argument was supported by Section Note 2(D) of Section XI, defining synthetic textile material, and Chapter Note 2(K) of Chapter 39, excluding textile articles from Chapter 39. The contention was further strengthened by Chapter Note 10 of Chapter 39, emphasizing the classification of strips of plastics of width less than 5mm under Chapter 54.

3. Judicial Precedents: The Collector (Appeals) relied on the Tribunal's judgment in a previous case and the decision of the High Court of Madhya Pradesh, which classified HDPE tapes as strips of plastics correctly classifiable under sub-heading No. 3920.32. These precedents supported the argument that HDPE tapes were not to be considered as falling under the category of synthetic textile materials, thereby upholding the Collector's decision and rejecting the Department's appeal.

In conclusion, the Appellate Tribunal upheld the Collector (Appeals) decision, emphasizing that HDPE tapes made from HDPE granules should be classified under the relevant sub-heading based on the material composition and width, as supported by legal provisions and judicial precedents.