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TMI Blog1991 (2) TMI 220X X X X Extracts X X X X X X X X Extracts X X X X ..... bsequently, they surrendered the Central Excise licence on the ground that their product was not chargeable to duty and in July, 1985, they filed a declaration seeking exemption from Central Excise licensing control in terms of Notification 111/78 issued under Rule 174A of Central Excise Rules on the ground that since the goods, manufactured by them, were totally exempted in terms of notification, they were not to be brought under Central Excise licensing control. The officers of the Central Excise Department visited the appellants on 26-6-1987 and found the product manufactured by them was not acrylic sheets and consequently, were of the view that the product was not eligible for exemption under Notification 132/86, dated 1-3-1986 under Serial No. 35 of the table to the notification. The Department found that the product was rigid plastic sheets under the 'trade name of 'Krinkglas'. The product was manufactured from a mixture of polyester resin, methyl, methacrylate monomer and other chemicals and colouring agents and it was reinforced with mat of fibre glass. The unit was also not holding any Central Excise Licence at that time. The officers also seized the stock of finished good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lyester would be utilised. The classification list filed in 1974 had been approved. After drawal of sample, a separate file was opened for the classification list which was ultimately approved on 28-8-1984. Since the sample was drawn, it was cleared that the department could have known that Polyester Resin was utilised. The similar samples were also drawn on 28-4-1984 and 22-2-1985 which, on test, disclosed the use of Polyester Resin. Another fact was that they had submitted drawback claim for the purpose of verifying the inputs regarding such drawback the Department had looked into their records ascertaining their inputs used in the manufacture of their final product. The Ld. Counsel submitted that in any case the demand for the period subsequent to 19-8-1985 is totally time-barred. There was a query raised by the Superintendent that they were not exempted under Notification 38/73 on the ground that the product is a Modified Acrylic Sheet. The query was replied vide their letter, dated 19-8-1985 disclosing all the facts. The Superintendent also accepted the classification of the product. The Ld. Counsel, further pointed that besides Methyl Methacrylate and Polyester Resin, the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder No. 402/84-D, dated 20-7-1984 in the case of M/s. Jayant Dalal Private Ltd., Bombay v. Collector of Central Excise, Bombay -1990 (45) E.L.T. 668 (Tri.). The goods involved there were Caprolactum Castings under the brand name "NYLOCAST". The Department sought classification of the goods under 15A(2) based on Deputy Chief Chemist's report since the raw-material Caprolactum was a monomer and not a plastic material. The Tribunal, in that case, considered the process of manufacture of the Monomer Castings and also the fact caprolactum after being melted and poured into pre-heated metal moulds wherein polymerisation takes place and after a few hours, the castings are taken out of oven. The Tribunal also noted while deciding the case of Gujarat High Court in the case of Jalal Plastics Industries and Others v. Union of India and Others -1981 (8) E.L.T. 653 (Gujarat) and the Rajasthan High Court decision in the case of Raish Plastics & Others v. Union of India -1983 (12) E.L.T. 92 (Rajasthan). The Rajasthan High Court agreed with the Gujarat High Court judgment and held that articles made of plastics in Item 15A(2) means those articles in the manufacture of which plastic material is us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntendent and not to the Assistant Collector, who has to approve the classification list. The Ld. D.R., in the circumstances, justified invoking the longer period for demand and cited in support the Supreme Court decision in the case of Jaishri Engineering Co. (P) Ltd. v. Collector of Central Excise -1989 (40) E.L.T. 214 (SC) for the submission that a mis-leading description of the product by the manufacturer would justify invoking longer period for demanding duty. As regards the merits of the case, the Ld. D.R. submitted that the Supreme Court decision with reference to different type of articles, namely, plastic torch, which is a product with plastic and other material. It was not in the context of the plastic sheets, etc. The material in the form of sheet made of plastic is included in Item 15A. The goods are not, according to the Department, comparable with the goods which form the subject-matter of the Supreme Court decision. The Ld. D.R. also relied upon the Gujarat High Court decision in the case of Bhor Industries Limited v. Union of India -1980 (6) E.L.T. 752 (Gujarat) which laid down that the articles made of plastic wherein the plastic should be used as a principal ingred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the appellants, would fall under Heading 39.22 for the period prior to 10-2-1987 and under Heading 39.26 thereafter. Illuminating signs, sign boards and art panels in the form in which they are cleared from the factory are clearly identifiable as intended for use solely and exclusively as sign boards, etc. Though they may vary in the form of sheet like items, they carry the necessary logo, name and description duly built in them even at the time of conception of the product in the factory and is therefore, classifiable as a part of illuminated signs under Heading 94.05 since the subsequent illuminated sign may be fabricated by the customer with a permanent light source attached to it. It was contended that if this it cannot come under Chapter 39 by virtue of Chapter Note 2(8) of Chapter 39. It was also submitted that for the period prior to March, 1986, the illuminated signs will not come under item 15A(2). The Collector's reasoning for ruling out classification under 94.05 has omitted to consider the implication of Chapter Note 2(5) to Chapter 39 in arriving at the classification of these products. 4. The submissions made by the Ld. Counsel and the Ld. D.R., have been caref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation delivery, packed in wooden crates and despatched to the customers. The process of making sign boards is slightly different and is being explained separately." Item 15A(1) and 15A(2) Central Excise Tariff are as follows : "Item No. 15A - PLASTICS Item No. Tariff Description Rate of duty 1. 2. 3. 15A. Artificial or Synthetic resins and plastic materials; and other materials and articles specified below : (1) Condensation, Polycondensation and poly-addition products, whether or not modified or polymerised, and whether or not linear (for example, pheno-plasts, amino-plasts, alkyds, polyallyl esters and other unsaturated polyesters, silicones); polymerisation and co-polymerisation products (for example, polyethylene, polytetrahaloethylenes, polyiso - butylene, poly-styrene, polyvinyl chloride, polyvinyl acetate, polyvinyl chloroacetate and other polyvinyl derivatives, polyacrylic and polymethacrylic derivatives, coumaroneindene resins); Fifty per cent ad valorem regenerated cellulose; cellulose nitrate, cellulose acetate and other cellulose esters, cellulose ethers and other chemical derivatives of cellulose, plasticised or not (for example, collodions, cellul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h other material. In view of this ratio, for the purposes of classification under Item 15A(2) CET, articles made out of plastics should be those articles which are wholly made of plastics and not made from plastic alongwith other materials as in the present case. In another case of Wiltech India v. C. C. E., Bangalore -1988 (38) E.L.T. 36 (Tri.) -1988 (18) ECR 209, the appellants had relied upon the Tribunal's decision in the VMT Fibreglass Industries v. C. C.E., Calcutta-1986 (23) E.L.T. 194 in which it was held that the fibreglass reinforced glass and reinforced product corrugated and plain roofing, manufactured by the appellants having a composition of fibreglass mat and polyester resin was classifiable under 15A(2). The Tribunal, in that case, held that the decision in the case of VMT Fibreglass cannot be followed in that case before the Tribunal in view of the Supreme Court decision in Geep Flashlight Industries case (supra). The ratio of the Tribunal's decision in the case of Jayant Dalal v. C.C.E., Bombay, the details of which have been narrated supra in the Ld. Counsel's arguments, wherein the Tribunal had followed the decisions of the Gujarat and Rajasthan High Courts, is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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