Central Excise - Classification of H.D.P.E. Blocks of regular geometric shape manufactured from duty paid H.D.P.E. Powder - Question regarding - Central Excise - 10/88-CX.3

Central Excise - Classification of H.D.P.E. Blocks of regular geometric shape manufactured from duty paid H.D.P.E. Powder - Question regarding Circular No. 10/88-CX.3 Dated 25-5-1988 [From F. No. 93/17/88-CX.3] Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Central Excise - Classification of H.D.P.E. Blocks of regular geometric shape manufactured from duty paid H.D.P.E. Powder - Question regarding. A case has come to the notice of the Board where a manufacturer was bringing duty paid H.D.P.E. moulding powder in his factory and obtaining blocks of regular geometric shape therefrom. The said blocks were obtained by subjecting the moulding powder to the process of compression moulding by applying heat and pressure. The audit party of the Accountant General had contested that the blocks so obtained fall under TI/5 A (1) of the old Central Excise Tariff. The Audit based their stand on referring to Explanation III (b) under Item 15A, wherein materials in the 'block' form is specified as a "material in the primary form." The conversion of one primary form into another primary form is considered as a process of manufacture and hence the Audit contended that duty would again be recoverable on the block form, notwithstanding the payment of duty at the powder stage. 2. The objection was contested by the Collector on the ground that Explanation III (b) under TI 15A refers to "materials." The blocks in question were "articles" and not the materials and hence the products would be classifiable as articles of plastics under TI 68 and not under 15A(1) as contested by the Audit. 3. The matter has been examined in detail by the Board. It is noted that TI 15A of CET as restructured in 1982 was based on Chapter 39 of the CCCN, Under the CCCN, the blocks, lumps and similar bulk forms are covered by headings 39.01 to 39.06 i.e. as "materials" and not as "articles". The H.D.P.E. blocks in question having regular geometric shape are required to be surface worked and only then those could be used as finished articles, to be used as components of various machinery parts etc. The Board is accordingly of the view of that H.D.P.E. blocks of regular geometric shape obtained from moulding powder would merit classification under TI 15A(1) of the old C.E.T. and duty would again be required to be collected on such blocks under TI 15A(1). 4. This is brought to your notice for taking suitable remedial action in the matter wherever necessary.