2001 (1) TMI 313 - AT - Central Excise

Summary

Issues: Eligibility of goods manufactured for the benefit of Notification 133/86.

Analysis:
1. Issue of Eligibility for Notification Benefit: The appeals revolved around the eligibility of goods manufactured for the benefit of Notification 133/86. The appellant purchased polyester resin in liquid form and added chopped glass strands and other substances to create a product known as dough moulding compound. The central question was whether this new product qualified for the duty exemption under Entry 10 of the Notification, which exempted polyester resin classifiable under specific headings of the Tariff. The Commissioner acknowledged that the manufactured commodity remained polyester resin under Heading 3907.91, citing Note 6(b) to Chapter 39, which considers such conversions as manufacturing.

2. Interpretation of Tariff and Notification: The appellant argued that the conversion of resin from liquid to paste form constituted manufacturing, making the product eligible for the exemption as it remained classified under Heading 39.07. However, the Commissioner contended that the product's properties differed from resin, implying that the tariff note could not influence the notification's scope. The appellant relied on a Supreme Court judgment (Steel Authority of India Ltd. v. CCE) to support their interpretation that when a notification specifies a commodity by classification, relevant chapter notes should apply.

3. Expert Opinions and Conclusion: The Commissioner's decision was challenged based on expert opinions from Dr. Jurale and Prof. D.D. Kale, asserting that the addition of substances did not create a new product but merely enhanced the existing resin. Both experts opined that the resin remained in its primary form, contradicting the Commissioner's view of a new distinct commodity emerging. Consequently, the Tribunal found in favor of the appellant, concluding that the goods were entitled to the notification's benefit. The appeals were allowed, and the impugned order was set aside.