Customs, Excise and Gold Tribunal - Delhi
Eagle Flask (P) Ltd. vs Collector Of Central Excise on 25 March, 1994
Equivalent citations: 1994(71)ELT765(TRI-DEL)
ORDER P.K. Kapoor, Member (T)
1. This is an appeal against the order passed by the Collector of Central Excise (Appeals), Bombay. The short point that arises for consideration in this case is whether articles of plastic falling under Tariff Item 68 of the erstwhile Central Excise Tariff when not exclusively manufactured out of raw materials falling under Tariff Item 15A(1) could be deemed as eligible for exemption from the Central Excise duty under Notification No. 182/82-C.E., dated 11-5-1982.
2. We have heard Shri R.J. Majra, ld. Advocate on behalf of the appellants. He submitted that the lower authorities have held that the appellants' product was not eligible for exemption under Notification No 182/82-C.E., dated 11-5-1982 on the grounds that the exemption under the said notification was admissible only in respect of articles of plastic manufactured exclusively from materials falling under Tariff Item 15A(1) and not when they are made out of duty-paid materials falling both under Tariff Items 15A(1) and 15A(3). He submitted that in view of the absence of any stipulation in the Notification No. 182/82-C.E., dated 11-5-1982 requiring that the manufacture of articles of plastic should be exclusively or solely out of materials falling under Tariff Item 15A(1), the exemption under the said notification could not be denied to the appellants even when along with the materials falling under Tariff Item 15A(1) some other raw materials falling under Tariff Item 15A(3) were also used. In support of his contention the learned counsel cited the following case law :-
(i) UOI v. Tata Iron & Steel Co. Ltd., Jamshedpur - 1977 (1) E.L.T. (J 61) (ii) Aluminium Corporation of India v. U.O.I. - 1978 (2) E.L.T. (J 452)
(iii) India Organic Chemicals Ltd. v. UOI and Ors. - 1983 (12) E.L.T. 43 (Madras)
(iv) Nayak Associates v. UOI - 1991 (55) E.L.T. 189 (Cal.)
(v) Naffar Chandra Jute Mills Ltd. v. Assistant Collector of Central Excise -1993 (66) E.L.T. 574 (Cal.)
(vi) Aravali Ispat Ltd. v. CCE, Jaipur - 1986 (26) E.L.T. 259 (Tri.)
(vii) Indian Organic Chemicals v. CCE, Madras - 1988 (35) E.L.T. 535 (Tri.)
(viii) Eagle Flask Industries Pvt. Ltd. v. CCE - 1991 (53) E.L.T. 65 The ld counsel on behalf of the appellants further submitted that the order passed by the lower authorities is not sustainable also for the reason that whereas in the show cause notice the charge made was that the goods in question were not eligible for exemption under Notification No. 182/82-C.E. since they did not belong to the class - "articles of plastic", in the orders passed by the lower authorities the goods have been held as not eligible for exemption under the notification on entirely different grounds. He stated that the appellants had been discriminated against by the Department since their competitors had been permitted to avail the exemption under the said notification, in respect of similar products.
3. On behalf of the respondents Shri Somesh Arora, ld. JDR submitted that as pointed out in the Tribunal's Order No. 1157/90-C, dated 29-10-1990 in the appellants' own case the Collector (Appeals) had held that they were not entitled to the exemption under Sr. No. 38 of the Notification No. 132/86 since in terms of Rule 3 of the Interpretative Rules insulated products viz. ther-moware with plastic content ranging from 51% to 57% were correctly classifiable as articles of plastic under sub-heading 3922.90 of the Schedule to the Central Excise Tariff Act, upto 9-2-1987 and under sub-heading 3924.90 from 10-2-1987 onwards. He added that in that case the Collector (Appeals) had invoked the provisions of Rule 3 of the Interpretative Rules, to hold that the products in question were articles of plastic, and the Tribunal held that the finding in regard to the nature of the goods for the purposes of classification under the Tariff was equally valued for the purposes of the notification which was also in respect of articles of plastics. He submitted that in the instant case it was correctly held that the products in question not being made exclusively out of materials falling under Tariff Item 15A(1) were not eligible for exemption under Notification No. 182/82-C.E., dated 11-5-1982 since in terms of the language of the notification only such articles falling under Tariff Item 68 were eligible for exemption which were made out of 'plastics' as defined in the 'Explanation' to the Notification i.e. "various artificial or synthetic resins or plastic materials or Cellulose esters and ethers included in sub-item (1) of Item No. 15A of the First Schedule of the Central Excises and Salt Act, 1944". He contended that on a plain reading of the notification it follows that the exemption was admissible only in respect of the goods falling under Tariff Item 68 provided they were made exclusively out of plastic materials falling under Tariff Item 15A(1). He stated that the appellants' claim that the order passed by the Assistant Collector had gone beyond the charge in the show cause notice is not correct in view of the consistent finding by the lower authorities that the goods in question were not eligible for exemption under Notification No. 182/82-C.E., dated 11-5-1982. Shri Arora added that the appellants' contention that they had been discriminated against since the Tribunal has to examine each case on its merits and not on the considerations of equity.
4. We have examined the records of the case and considered the submissions on behalf of both sides. The appellants' case is that in the absence of any stipulation in the Notification No. 182/82-C.E., dt. 11-5-1982 to the effect that articles of plastic falling under Tariff Item 68 should be produced exclusively or entirely out of plastic materials or Cellulose esters and ethers in any form falling under sub-item (1) of Item No. 15A of the First Schedule to the Central Excises and Salt Act, 1944, the appellants' product made mainly out of plastic materials falling under Tariff Item 15A(1) with an admixture of materials falling under Tariff Item 15A(3) would be eligible for exemption under the said notification. We refer to the Notification No. 182/82-C.E., dated 11-5-1982 which is reproduced below :-
5. It is seen that in the case of Indian Organic Chemicals v. Collector of Central Excise, Madras, reported in 1988 (35) E.L.T. 535 the Tribunal relying upon the various pronouncements of the Supreme Court and High Courts had held that unless any notification exempting any product specifically provides that exemption would be available only when the product is made 'entirely', 'exclusively', or 'only' from the specified material the benefit of the exemption would not be deniable to a manufacturer who uses along with the specified material certain other materials as well. Paras 5 to 9 of the said decision being relevant are reproduced below :-
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6. The question whether composite articles of plastics made out of a combination of plastic and non-plastic materials could be deemed as 'Articles of plastics' falling under sub-heading 3922.90 of the Schedule to Central Excise Tariff Act, 1985 for the purposes of exemption under Notification No. 132/86-C.E., dated 1-3-1986 which exempted 'Articles of Plastics' provided they were made out of goods falling under Heading Nos. 3901 to 3915 of the Schedule on which duty had already been paid, was examined by the Tribunal in the appellants' own case reported in 1991 (53) E.L.T. 65. In para 9 of its order the Tribunal held as under :-
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7. On the ratio of the decisions quoted above, we accept the appellants' contention that in the absence of any stipulation in Notification No. 182/82-C.E., dated 11-5-1982 that 'Articles of Plastics' falling under Tariff Item 68 should be produced 'exclusively' or 'wholly' out of artificial resins or plastic materials or Cellulose esters and ethers in any form falling under sub-item (1) of Item No. 15A of the First Schedule to the Central Excises and Salt Act, 1944 the products made predominantly out of inputs falling under Tariff Item 15A(1) and having some admixture of inputs falling under Tariff Item 15A(3) were also eligible for exemption under the said notification.
8. In view of the above discussions, we set aside the impugned order and allow the appeal with consequential relief to the appellants.