1999 (2) TMI 242 - AT - Central Excise

Summary

Issues Involved:
Classification of Printing Paste for Central Excise Duty

Detailed Analysis:

Issue 1: Classification of Printing Paste
The appeal filed by M/s. Phoenix Mills Ltd. questioned whether the Printing Paste they manufactured is excisable goods chargeable to Central Excise duty. The Collector classified the product under sub-heading 3204.39 of the Central Excise Tariff Act, considering the mixing of ingredients as manufacturing under Central Excise law. The Collector also emphasized the shelf life of the printing paste and its classification under the tariff schedule.

Issue 2: Opportunity for Explanation and Rate of Duty
The appellant argued that they were not given an opportunity to explain the classification under sub-heading 3204.29, which led to duty exceeding the specified amount. They contended that the printing paste was not a marketable commodity due to its instant use and shade dependency. The appellant also claimed correct classification under sub-heading 3204.19 due to the use of pigment paste.

Issue 3: Board's Clarification and Modvat Credit
Referring to the Board's Order No. 2/93, the appellant argued that printing paste prepared from standardized dyes by mixing with other materials does not amount to manufacture. They requested a remand to ascertain this fact. The appellant sought Modvat credit under Rule 57A of the Central Excise Rules for using duty-paid raw materials.

Issue 4: Consideration of Evidence and Remand Decision
After considering both parties' submissions, it was observed that the Board's clarification was not considered by the Collector. The High Court acknowledged the appellant's contention of using duty-paid standardized dyes for preparing the printing paste. The matter was remanded to the adjudicating authority to verify the use of duty-paid dyes and provide an opportunity for classification representation. The appellant was allowed to avail Modvat credit upon satisfying the adjudicating authority.

In conclusion, the appeal was allowed by remand to verify the facts regarding the preparation of printing paste from duty-paid standardized dyes and to provide an opportunity for classification representation. The appellant was granted the benefit of Modvat credit upon fulfilling the necessary requirements.