1999 (3) TMI 234 - Commissioner - Central Excise

Summary

Issues:
Classification of printed PVC sheetings under Central Excise Tariff Act, eligibility for Modvat credit, alternative classification under Chapter Heading 4901.90, retrospective application of Modvat credit.

Classification Issue:
The appeal concerns the classification of printed PVC sheetings under the Central Excise Tariff Act. The Assistant Commissioner classified the product under Chapter sub-heading 3920.39, leading to a demand of Rs. 50,44,584.50. The appellant argued that printing on PVC sheetings only enhances marketability and does not constitute manufacture of a new product chargeable to duty. Citing legal precedents, the appellant contended that the product should be exempt from duty or alternatively classified under Chapter Heading 4901.90. The Commissioner analyzed the product's characteristics, the purpose of printing, and relevant legal provisions. Ultimately, the Commissioner set aside the Assistant Commissioner's classification, ruling that the printed PVC sheetings should be classified under Chapter 49, in line with the deeming provision of the Chapter Note and previous Tribunal decisions.

Modvat Credit Eligibility Issue:
The appellant sought Modvat credit on bare printed sheets if the Assistant Commissioner's decision was upheld. They argued that the failure to claim Modvat credit was based on the presumption that the final product was duty-exempt. The appellant relied on Tribunal decisions for retrospective application of Modvat credit. The Commissioner considered the appellant's claim for Modvat credit and the implications of the classification decision. Ultimately, the Commissioner's ruling in favor of the appellant's classification under Chapter 49 would entitle them to Modvat credit, covering a significant portion of the differential duty amount.

Alternative Classification Issue:
The appellant contended that the printed PVC sheetings should be classified under Chapter Heading 4901.90, attracting nil rate of duty. The Assistant Commissioner, however, classified the product under Chapter sub-heading 3920.39 based on the product's uses and Section Note 2 of Section VII of the Central Excise Schedule. The Commissioner examined the legal basis for the Assistant Commissioner's classification, finding it lacking. The Commissioner ruled that the deliberate printing on PVC sheetings enhanced market acceptance, justifying the classification under Chapter 49. This decision aligned with the deeming provision of the Chapter Note and previous Tribunal rulings, leading to relief for the appellant in terms of classification and duty liability.

In summary, the Commissioner's judgment addressed the issues of classification, Modvat credit eligibility, and alternative classification of printed PVC sheetings under the Central Excise Tariff Act. The ruling favored the appellant, setting aside the Assistant Commissioner's classification and maintaining the classification under Chapter 49, which entitled the appellant to Modvat credit and relief from additional duty payments.