(1.) THE dispute raised in the aforesaid petitions is with regard to the question whether HDPE/PP tapes are classifiable under heading No. 39.20 or heading No. 39.22 or Heading No. 39.26 of Section VII of the Schedule to the Central Excise Tariff Act, 1985. Since the controversy in all these writ petitions is the same we may notice the facts of D.B. Civil Writ Petition No. 3737 of 1989 with a view to understand the background in which these matters arise.
(2.) THE petitioner in D.B. Civil Writ Petition No. 3737/1989 is M/s Kay Poly Plast Pvt. Ltd. It is engaged in the business of manufacture of High Density Poly Ethylene tapes (for short, `HDPE tapes') and Poly Propylene tapes (for short, `PP tapes'). It appears that the petitioner purchases HDPE/PP granules. In order to convert the HDPE/PP granules into HDPE/PP tapes, the granules are poured into a machine called Extruder. In the extruder these granules are melted by heating. Due to heat the granules polymerize into a molten mass. Simultaneously with heating, mechanical pressure is applied by rotation of screw. By application of appropriate pressure a film or strip of desired gauge is obtained. This film or strip thus obtained is in a semi- finished condition. THE film or strip is cooled with the help of air in the open and is slit into tapes with the help of blades fixed in a machine called Godet machine. After silting, the tapes are stretched with the help of heat generated by heaters and by mechanical force. This not only imparts strength to the tapes but it also results in reducing the width of the tape. By this process the desired width of the tapes can be obtained. In the instant matter, we are concerned with width of the tapes not exceeding 5 mm. THEse HDPE and PP tapes are manufactured from raw materials composed exclusively of plastic.
(3.) THE Madhya Pradesh High Court also noticed that there were two conditions for a product to be classified under tariff item 15A (2) One was that the article should be made of plastic and the second was that it should not be specified elsewhere in the Central Excise Tariff. It was further noticed by the Court that there was no dispute before the Tribunal that the HDPE woven sacks were entirely made of plastic, therefore, it was held that the HDPE sacks did not fall within the purview of Tariff Item 68 (old) corresponding to new tariff entry 54. THE Madhya Pradesh High Court also referred to the decisions of the CEGAT in Shree Radhe Industries vs. Collector of Customs & Central Excise (3), wherein it was held that since the HDPE tapes are neither man- made filament yarn nor cellulosic spun yarn, they do not fit into any of the categories of Item 18 (old). After a detailed discussion, the Division Bench of the Madhya Pradesh High Court came to the conclusion that the HDPE strips/tapes fall under the Heading No. 39.20, sub-heading No. 3920.32 and not under Heading No. 54.06, sub-heading No. 5406.90. It was also held that HDPE sacks fall under the Heading No. 39.23, sub-heading 3923.90.