Customs, Excise and Gold Tribunal - Delhi
Texplas (India) Ltd. vs Collector Of Central Excise on 1 September, 1988
Equivalent citations: 1989(40)ELT129(TRI-DEL)
ORDER D.C. Mandal, Member (T)
1. The appellants are manufacturers of press moulding, namely, sheets, rings, tubes, spacers, covers, pole washers, flanges, arcpots, levers and bobbins etc. based on synthetic resin with fibre glass reinforcement. They also manufacture fibre glass textolite sheets. The raw materials for manufacture of mouldings are glass fibres, synthetic resin and fillers. These are mixed, shaped according to requirement and moulded and cured under temperature and pressure. Fibre glass textolite sheets are insulating material, glass cloth impregnated with resins in diluted form. These are pressed in a high pressure and high temperature. These arc then used as laminates for various insulation purposes inside Hydrogenerators, Turbogenerators and Motors. These, are in the form of sheets and are cut into pieces according to requirement before use. In the process of manufacturing these goods, plastic material is re-in-forced by glass fabric.
2. The question for determination in this appeal is the correct classification of the above products for the purpose of Central Excise duty and also whether the benefit of exemption Notification Nos. 149/82-C.E., dated 22-4-1982 and 182/82-C.E., dated 11-5-1982 is admissible in respect of these products.
3. In the impugned order the Collector (Appeals) has held that the aforesaid products other than the sheets should rightly be classified under Item 68 of the Central Excise Tariff. The benefit of exemption Notification No. 182/82-C.E. will not admissible in view of the decision of the Supreme Court in the case of Geep Flashlight Industries Ltd. as the said products are not made exclusively from the synthetic resins, but glass fibre has been used alongwith the synthetic resin for their manufacture. He has also held that the sheets are not eligible for the exemption from duty under Notification No. 149/82-C.E., dated 22-4-1982 because of the specific exclusion of sheets from the Notification No. 149/82-C.E.
4. Arguing for the appellants, Shri Ganesan has stated that the Department was drawing samples from the products manufactured by the appellants, but the copies of the test reports were not made available to them except two test reports, copies of which have been filed by him with his application (dated Nil but received in the Tribunal on 1-9-1988). Copies of these two test reports show that the glass fabric contained in the textolite sheets was more than 50% and actually to the extent of 60.4% and 68.5% by weight respectively. He has argued that glass fabric being predominant in the sheets, the same are correctly classifiable under Item 22F of the Central Excise Tariff in view of the Tribunal's earlier decision in the case of Hatim Dielectrics Pvt. Ltd. v. Collector of Central Excise, Calcutta, reported in 1985 (19) ELT 621 (Tribunal). He has also stated that the appellants claimed classification under this Tariff Item in their cross-objection filed before the Collector of Central Excise (Appeals), but he did not take the cross-objection into consideration and gave no findings regarding the classification under Tariff Item 22F. He has said that the aforesaid decision of the Tribunal fully covers the classification of textolite sheets in the present case. He has, however, contended that these sheets are articles made of plastic and are eligible for exemption from duty under Notification No. 149/82-C.E,, dated 22-4-1982. Regarding the mouldings he has stated that even if the same are classified under Item 68 of the Tariff, as held by the Collector of Central Excise (Appeals), the same, being the articles made of plastics, are exempted from the whole of Central Excise duty.
5. On behalf of the Revenue, Shri Durghayya has argued that the classification of textolite sheets is covered by this Tribunal's decision reported in 1985 (19) ELT 621. The Collector (Appeals) has not, however, considered this decision. Shri Durghayya has, therefore, requested that this point may be remanded to the Collector (Appeals) for de novo decision. As regards mouldings, he has stated that the same should not be classified under Tariff Item 15A(2) as they are not wholly made of piastics. He has argued that "articles made of plastics" means the articles wholly made of plastics. He has relied on this Tribunal's decision reported in 1988 (36) ELT 139 (Tribunal) in support of his argument. As regards the benefit of Notifications No. 149/82-C.E. and 182/82-C.E. Shri Durghayya has stated that both these notifications exempt articles made of piastics. It means that articles which are wholly made of plastics are exempted under these two notifications. Hence, he has stated, the benefit of notifications cannot be allowed to these products.
6. We have considered the arguments of both sides. In the case of Geep Flashlight Industries Ltd. v. Union of India and Ors., reported in 1985 (22) ELT 3 (S.C.), it was held by the Hon'ble Supreme Court that articles made of plastics means articles made wholly of commodity commercially known as plastics, and not articles made from plastics alongwith other materials. Following the aforesaid decision of the Supreme Court, this Tribunal, in the case of Collector of Central Excise, Ahmedabad v. Melamine Fibre Board Ltd. and Ors., reported in 1988 (36) ELT 139 (Tribunal), has held that articles made of plastics means articles made wholly of plastic materials. When the aforesaid decision of the Supreme Court was brought to the notice of the learned advocate during the hearing, he tried to distinguish the facts of the present case from the facts of the case of Geep Flashlight Industries Ltd. He stated that classification of plastic torch was under examination before the Supreme Court and according to the trade parlance plastic torch is a distinct and different commodity commonly known in the market as torch and it is not described by the name of the plastic tube. He has argued that in this context the Supreme Court held that plastic torch was not an article of plastics. This argument of the learned advocate does not convince us. in paragraph 3 of the judgment, Supreme Court has specifically held that articles made of plastic mean articles made wholly of commodity commercially known as plastic, and not articles made of plastic alongwith other materials. In view of this ratio, for the purpose of classification under Tariff Item 15A(2) of the Central Excise Tariff articles made of plastics should be those articles which are wholly made of plastic and not those articles which are made from plastic alongwith other materials as in the present case. In the circumstances, mouldings as well as the textolite sheets manufactured by the appellants cannot be classified as articles of plastics under Item 15A(2) of the CET.
7. So far as the classification of textolite sheets is concern, the same is squarely covered by this Tribunal's earlier decision in the case of Hatim Dielectrics Pvt. Ltd., Calcutta v. Collector of Central Excise, Calcutta, reported in 1985 (19) ELT 621 (Tribunal). It was held therein that epoxy glass textolite sheets were correctly classifiable under Item 22F of the Central Excise Tariff. We have no reason to hold a different view in the present case. Accordingly, we hold that the textolite sheets manufactured by the appellants are correctly classifiable under Item 22F of the CET.
8. Mouldings have been classified by the Collector (Appeals) under Tariff Item 68. The percentage of plastics and glass fibre contained in the mouldings have not been stated in the orders of the lower authorities. Copies of the test reports filed by the learned advocate relates to textolite sheets. During the arguments before us the learned advocate for the appellants has, however, stated that in the mouldings plastic materials were more than 60% and glass fibre was less than 40%. Plastic materials were, therefore, predominant in the mouldings. This has not been controverted by the learned JDR for the Revenue. This being the position, the classification of the mouldings under Tariff Item 68 as held by the Collector (Appeals) is correct.
9. According to Notification No. 149/82-C.E., dated 22-4-1982, articles made of plastics falling under sub-item (2) of Item 15A of the CET are exempted from the Central Excise duty subject to fulfilment of certain conditions mentioned in the notification. Notification No. 182/82-C.E., dated 11-5-1982 exempts articles made of plastics falling under Item No. 68 of the CET from the whole of the Central Excise duty provided the conditions laid down in the notification are fulfilled. Both these notifications exempt articles made of plastic. Following the ratio of the Supreme Court judgment in the case of Geep Flashlight Industries Ltd., we have held that the products manufactured by the appellants, namely, mouldings and the textolite sheets, are not articles made of plastics. They do not fall under sub-item (2) of Tariff Item 15A of the CET. Notification No. 149/82-C.E., dated 22-4-1982 is, therefore, not applicable to these goods. As the mouldings are not "articles made of plastics" the same are not eligible for the exemption of duty under Notification No. 182/82-C.E. We, therefore, hold that the Collector (Appeals) has rightly rejected the claim of the appellants to the benefit of Notifications No. 149/82-C.E. and 182/82-C.E.
10. In the light of the foregoing discussions, we uphold the decision of the Collector of Central Excise (Appeals) insofar as it relates to the classification of mouldings under Tariff Item 68 and the denial of benefit of Notifications No. 149/82-C.E. and 182/82-C.E. are concerned. We, however, hold that the textolite sheets are correctly classifiable under Item 22F of the First Schedule to the Central Excises and Salt Act, 1944.
11. The appeal is disposed of in the above terms.