1997 (3) TMI 345 - AT - Central Excise

Summary

Issues:
Classification of plastic articles supplied to ordinance factories under Tariff Sub-Heading 9306.00, Alleged duty evasion, Imposition of penalty, Interpretation of exemption Notification 175/86-C.E., Classification of various articles supplied to ordinance factories, Burden of proof for classification, Applicability of Chapter 93 vs. Chapter 39, Interpretation of Notes in Chapter 93, Applicability of Notification No. 175/86, Liability for duty payment without manufacturing license.

Classification of Plastic Articles:
The appellant, a manufacturer of plastic articles supplied to ordinance factories, faced allegations of duty evasion under Tariff Sub-Heading 9306.00. The adjudicating authority confirmed the duty evasion and imposed a penalty after considering the exemption Notification 175/86-C.E. Various plastic articles supplied, including mines apers, shell caps, washers, nylon rings, and more, were deemed as parts of ammunition by the authority.

Interpretation of Chapter 93 vs. Chapter 39:
The appellant contested the classification, arguing that the plastic articles were parts of general use falling under Chapter 39, not specifically designed for ammunition. The appellant relied on Note No. 1 of Chapter 93, which excludes goods of general use made of plastics. The Works Manager's statement indicated that the articles were not uniquely shaped for ammunition use but were common plastic articles like containers, fuses, washers, and tubes, supporting the argument for classification under Chapter 39.

Burden of Proof and Applicability of Notification:
The Revenue, represented by the JDR, claimed that since the goods were supplied to ordinance factories, they were presumed to be solely for ammunition use unless proven otherwise. However, the tribunal held that the burden of proof for classification rested on the Revenue, not the appellant. Without evidence from the Revenue to show the articles were exclusively for ammunition, the classification under Chapter 93 could not be upheld. The tribunal directed a review of duty liability under Notification No. 175/86 and noted that duty payment responsibility falls on the appellant due to the absence of a manufacturing license.

Conclusion:
The tribunal rejected the classification under Chapter 93, emphasizing the lack of evidence to support the articles being solely for ammunition use. The appellant's plastic articles were deemed as parts of general use falling under Chapter 39. The tribunal directed a reevaluation of duty liability under the relevant notification and held the appellant responsible for duty payment without a manufacturing license. The appeal was disposed of accordingly.