Lacquered/laminated/metallised plastic films manufactured from duty paid bare films [Chapter 39] - Central Excise - 93/75/86-CX.3

Lacquered/laminated/metallised plastic films manufactured from duty paid bare films [Chapter 39] Letter No. 93/75/86-CX.3 Dated 9-10-1986 Government of India Ministry of Finance (Department of Revenue) New Delhi Instances of divergence in the practice of assessment of lacquered/ laminated or metallised plastic films under the new Central Excise Tariff have come to the notice of the Board. The matter was also raised by some of the manufacturers before the Finance Minister at an Open House meeting held recently. 2. The issue has been examined by the Board. It is observed that conversion of bare films into lacquered, laminated or metallised films brings into existence a new product with distinct name, character and use. In this connection, attention is invited to Board's Tariff Advice No. 40/82, dated 15th July, 1982, wherein it was clarified that metailised/lacquered polyester films manufactured out of bare polyester films on which appropriate duty hás been paid would again be chargeable to duty under the then existing Tariff Item 15A(2) of CET, but the assessee would be entitled to avail of the benefit of proforma credit under Rule 56A of the Central Excise Rules. However, subsequent to the issue of the said Tariff Advice, notificalion No. metallised polyester films also got the benefit of exemption when manufactured from duty paid plastic materials. With effect from 1st March, 1986, Notification No. 231/82 C.E., dated 23-10-1982 has been withdrawn, and excise duty has been immenced on plastic films. Law Ministry's opinion referred to in the aforesaid Tariff Advice No. 40/82 thus assumes relevance after the withdrawal of the said notification. 3. The Board further observed that, since then, two recent decisions (cited below) further confirm the views of the Law Ministry viz., Supreme Court decision in the case of Empire Industries v. Union of India [1985 (20) E.L.T. 1979 (S.C.)] and CEGAT Order No. 104/86-C, dated 18-2-1986 in the case of Guardian Plasticote Ltd. v. C.C.E., Calcutta [1986 (24) E.L.T. 542 (Tribunal)]. 4. It is accordingly viewd that lacquered/laminated or metallised plastic films manufactured from duty paid bare films would be liable to excise duty notwithstanding the fact that such lacquered/metallised or laminated films may fall under the same sub-heading of CET. However, Chapter 39 being covered by the Modvat Scheme, the benefit of Modvat in respect of duty paid on bare films would be available towards payment of duty on lacquered/metallised or laminated film.