1999 (5) TMI 91 - AT - Central Excise

Summary

Issues: Classification of HDPE/PP/LLDPE products under the Central Excise Tariff Act.

Analysis:
The appeal was filed against the order passed by the Collector (Appeals), Ghaziabad, regarding the classification of various products manufactured by the appellants. The appellants produced HDPE/PP/LLDPE strips/tapes, woven sacks, and fabrics. The Collector (Appeals) classified the products under different sub-headings of the Central Excise Tariff Act based on previous orders. The appellants argued that the classification of all products should flow from the correct classification of the fabrics impregnated with plastics. They highlighted that the fabrics impregnated with plastics fall under Chapter 39 of the Tariff and are not covered by the section dealing with textiles. They also mentioned a government notification extending partial exemption to such fabrics for the manufacture of sacks or bags. The appellants contended that the classification of the impugned fabrics under different headings was inconsistent with the section note and the government's classification of strips/tapes for fabric manufacture. They further pointed out that the department had accepted the classification claimed by the appellants in subsequent classification lists.

The Collector (Appeals) classified the HDPE/PP/LLDPE products under specific sub-headings following a decision of the Madhya Pradesh High Court in a related case. It was noted that the impugned products were made of HDPE/PP/LLDPE, and the relevant headings in the Tariff covered fabrics of man-made filament yarn and textile fabrics impregnated with plastics. The judgment emphasized that for strips to be classified under Chapter 54, they should be of synthetic textile material, and the definition of fabric and textiles did not include plastics as a commodity. The raw material used for HDPE strips fell under Chapter 39, and without evidence that the strips were synthetic textile material, their width alone would not determine their classification. The government had also ordered the classification of HDPE strips and tapes under specific sub-headings, indicating that fabrics made from HDPE should not be classified under chapters related to textiles. The judgment highlighted that subsequent classification lists by the department had approved the classification of the impugned products under Chapter 39 of the Central Excise Tariff Act. Based on these findings, the impugned order was set aside, and the appeal was allowed.