GUJARAT STATE FERTILISERS LTD Vs. COLLECTOR OF C. EXCISE
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Gujarat State Fertilisers Ltd.
Collector Of C. Excise
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S.L. Peeran, Member (J) -
(1.) THIS appeal is directed against the order -in -appeal No. 1538/BD -682/86 dated 5 -5 -1987 by which the Collector (Appeals), Bombay has confirmed the classification of the waste and scrap of polymethyl methacrylate sheets also known as "Acrylic sheets" under subheading 3920.31 of Central Excise Tariff.
(2.) THE appellants have submitted that they are engaged in the manufacture, among many things, of the goods chargeable to duty under Chapter 39 of Central Excise Tariff, 1985. They had filed classification list and price list from time to time, with the proper officer in accordance with Rule 173B and Rule 173C respectively and were approved from time to time after scrutiny. They submit that after the introduction of new Central Excise Tariff Act, 1985, they file classification list for the various items manufactured by them including polymethyl methacrylate sheets referred to shortly as "acrylic sheets" in the discharge of its obligation under Rule 173B of the rules.
(3.) THEY contended that under compulsion from the Assistant Collector, they filed under protest classification list in respect of waste and scrap of acrylic sheets on 7 -3 -1986 which came to be approved and they appealed to Collector (Appeals) who passed the impugned order upholding the classification list in respect of waste and scrap of acrylic sheets.
They have given details of manufacture of the acrylic sheet, which undergoes through five processes namely :
(1) Syrup preparation process; (2) Cell construction process; (3) Polymerisation process; (4) Finishing process; and (5) Auxiliary process (Utensil process) They contended that in the process of manufacture of acrylic sheets, waste and scrap arises at two stages. They contended that their customers place indent for trimmed acrylic sheets for the reason that they do not have required facility to carry out trimming. Accordingly, they carry out trimming operation on acrylic sheets bound with gaskets. The trimming process yields small and irregular strips of uneven sizes with gaskets attached to them. This waste has been a subject matter of classification list. They contended that the second stage where waste and scrap results is the stage of polymerisation when the upper glass would be separated and the polymerised cast sheets are obtained. In the course of removal of the upper glass mould (cell) the sheets, on occasions, get damaged or deformed. Such defects or damage can be cured or rectified only by cutting the polymerised sheets at appropriate places and it is at this stage that small pieces of the dimensions of less than one foot result as waste and scrap. The appellants contended that the waste and scrap arising during the course of manufacture are unavoidable one and quite different from and cannot be equated with the parent material. They contended that the waste and scrap of acrylic sheets was not the product of application of any labour or manipulation pertaining to any process of manufacture within the contemplation of Section 2(f) of the Central Excises and Salt Act, 1944. They contended that the impugned goods waste and scrap of acrylic sheets did not constitute goods and being non -excisable, it is not dutiable and hence not classifiable under TI 3906.10 of Central Excise Tariff as held by Assistant Collector. They contended that they sent a letter dated 1 -3 -1986 to the Assistant Collector that they would be paying the duty under protest and requested the Assistant Collector to treat the said letter as 'letter of protest' under Rule 233B of the Central Excise Rules, 1944. They also refer to subsequent correspondence they had with the Assistant Collector in this regard. The Collector (Appeals) has relied on note 6 of Chapter 39 and has treated the waste and scrap as polymethyl methycrylate in primary form and classifiable under Tariff subheading 3920.31 of Central Excise Tariff, 1985. The appellants are thus challenging the classification of the irregular non -geometric shape of acrylic sheet which they consider it as waste and scrap.
4A. Shri Mehta, learned counsel arguing for the appellants submitted that the impugned product is a waste and scrap of acrylic sheets and it is not excisable commodity. He submitted that the appellant wanted to declare the product as "other goods" but Assistant Collector did not agree to it and hence they filed the classification list under protest declaring as classifiable under Chapter Heading 3906.10. It was approved by the Assistant Collector and hence they appealed and it was also rejected. He contended that there is no material on record to consider the scrap and waste of acrylic goods being excisable. He contended that plastics were classified in erstwhile tariff under TI 15A(1) and article of plastics under 15A(2) while the same items have now, under new tariff, been distributed under TI 3901 to 3904. He contended that acrylic sheets fall under TI 3920.00 and therefore its scrap cannot fall under 3906.10 of Central Excise Tariff and hence the reason given for classification by lower authorities was not sustainable. He contended that the waste and scrap of acrylic sheets were not capable of moulding. He contended that in Apna Industries v. Collector of Central Excise as reported in 1989 (43) E.L.T. 510, it was held that acrylic scrap was not capable of being classified under TI 15A (1). He relied on the following rulings :
1. Asiatic Oxygen Ltd. v. Collector of Central Excise -1989 (44) E.L.T. 718 (Tribunal)
2. Apna Industries v. Collector of Central Excise - 1989 (43) E.L.T. 510 (Tri.)
3. HMM Ltd. v. Collector of Central Excise -1989 (40) E.L.T. 422.
4. Collector of Central Excise v. Captainganj Distillery -1987 (29) E.L.T. 122.
5.Hindustan Lever Ltd. v. Collector of Central Excise -1985 (22) E.L.T. 232.
6. Jay Electric Wire Corporation Ltd. v. Collector of Central Excise -1984 (18) E.L.T. 582. ;
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