Customs, Excise and Gold Tribunal - Mumbai
Godrej & Boyce Mfg. Co. Ltd. vs Commissioner Of C. Ex. on 2 November, 2002
Equivalent citations: 2003(153)ELT327(TRI-MUMBAI)
ORDER C. Satapathy, Member (T)
1. Shri A. Hidayatulla, learned advocate for the appellants states that these four appeals are against a common order confirming a duty demand of Rs. 33/43,486.25 Ps. and imposing a penalty of Rs. 50,000/-. The period of demand relates to 31-3-1992 to 31-7-1993. The appellants manufacture table tops from duty paid decorative laminated sheets purchased from other manufacturers. The issue in these appeals is whether Modvat credit on such decorative laminated sheets should be restricted to Rs. 800/- per tonne under the third proviso to the Notification No. 177/86-C.E., dated 1-3-1986 issued under Rule 57A of the Central Excise Rules, 1944. The said proviso inter alia restricts Modvat credit to Rs. 800/- in the case of paper and paperboard. It is the case of the appellants that the inputs used by them are articles of paper and paperboard classifiable under sub-heading 4823.90 and therefore they are not subject to the restriction as clarified by Board's Circular No. 13/91, dated 5-3-1991. The learned advocate states that duty was paid by their suppliers @ 35% under subheading 4823.90 which has not been altered by the jurisdictional officers at origin. The classification of the inputs cannot be changed to 4823.19 at the receiving end and the adjudicating Commissioner is in error in reclassifying the inputs as paper/paperboard and not as an article of paper/paperboard. The learned advocate cites the following case laws in support of this arguments :-
1. Tata Oil Mills v. C.C.E., Cochin -1997 (91) E.L.T. 144 (Trib.)
2. CCE. v. Hindustan Lever Ltd. -1990 (47) E.L.T. 646 (Trib.)
3. C.C.E., Rajkot v. Hindustan Lever Ltd. - 2000 (121) E.L.T. 437 (Trib.)
4. Rock Stone Industries v. C.C.E., Jaipur -1995 (77) E.L.T. 341 (Trib.)
5. Ranadey Micronutrients v. C.C.E. -1996 (87) E.L.T. 19 (S.C.)
6. Paper Products Ltd. v. C.C.E. -1999 (112) E.L.T. 765 (S.C.) He also produced classification lists of two of the suppliers of the inputs M/s. Formica India Division and M/s. National Plywood Industries Ltd. indicating classification of decorative laminates as articles of paper under sub-heading 4823.90.
2. Shri M.P. Sendo, learned D.R. supports the impugned decision of the Commissioner stating that one has to go by everyday usage parlance to decide what is paper and paperboard. Shri M.K. Gupta, learned Jt. C.D.R. in his intervention states that the Apex Court has decided the classification of decorative laminates under Chapter 39 and that the same should be kept in view. He has later on submitted the following case laws :-
1. C.C.E., Hyderabad v. Bakelite Hylam Ltd. -1997 (91) E.L.T. ,13 (S.C.)
2. C.C.E. v. Wood Polymers Ltd. -1998 (97) E.L.T. 193 (S.C.)
3. We have heard both sides and perused the case records. The issue in the impugned appeals is not classification of the input materials per se, but whether the credit should be restricted to Rs. 800/- per tonne in case the same can be considered as paper/paperboard. As per the Board's Circular no restriction will apply if the inputs are articles of paper/paperboard. The classification and duty payment has been done at the origin under sub-heading 4823.90 which applies to articles of paper/paperboard. The Apex Court decisions cited by the Jt. C.D.R. indicate classification of the product in chapters other than 48 which covers paper/paper board. The Apex court decision in wood polymer that Rules of Interpretation contained in Tariff are to be applied rather than 'common parlance test' helps the cause of the appellants rather than the case of the department. In view of the above, we have no hesitation in holding that the Commissioner is clearly in error in her determination that the restriction will apply to the appellant's case. We, therefore, set aside the Impugned orders, allow the appeals with consequential relief.