Custom, Excise & Service Tax Tribunal
Sri Rama Polybags vs Cce, Madurai on 13 May, 2008
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
E/232/01, E/233/01 & E/234/2001
(Arising out of Order-in-Original No. 8/2000 dated 24.11.2000 passed by the Commissioner of Central Excise, Madurai).
For approval and signature
Honble Shri P. G.CHACKO, Member (Judicial)
Honble Shri P.KARTHIKEYAN, Member (Technical).
________________________________________________
1. Whether Press Reporters may be allowed to :
see the Order for Publication as per Rule 27
of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 :
of the CESTAT (Procedure) Rules, 1982 for
publication in any authoritative report or not?
3. Whether the Honble Member wishes to see :
the fair copy of the Order.
4. Whether order is to be circulated to the :
Departmental Authorities? _______________________________________________
1. Sri Rama Polybags : Appellant
2. U. Sellakkan
3. S.R. Selvaraj
Vs.
CCE, Madurai. : Respondent
Appearance Shri S. Ranganathan, Adv., for the appellant Shri T.C. Rajadas, SDR, for the respondent CORAM Shri P.G. CHACKO, Member (Judicial) Shri P. KARTHIKEYAN, Member (Technical) Date of hearing: 13.05.2008 Date of decision:13.05.2008 Final ORDER No.________/2008 Per P. KARTHIKEYAN These three appeals arise before us for the second time. Appeals had been filed by M/s Sri Rama Poly Bags (SRP), the assessee, against demand of Rs.7,60,544/- being duty due on HDPE tapes, cleared during 1.3.86 to 17.2.89 and penalty of Rs. 1.5 lakhs on SRP. Shri. S.R. Selvaraj, Managing Partner of SRP and Shri. U.Sellakkan, Manager had filed appeals against imposition of penalties of Rs.1.5 lakhs and Rs.One lakh respectively in the same order. In the initial round we had remanded the matter to decide the dispute in the light of the judgment of the High Court of Madhya Pradesh in the case of Raj Pack Well Ltd. Vs. UOI reported in 1990 (50) ELT 201(M.P.). In the said judgment the High Court of Madhya Pradesh had decided that HDPE tapes were classifiable under CSH 3920.32 and not under CSH 5406.90. In the impugned order, the Commissioner adjudicated the issue again against the assessee raising a demand of Rs.7,86,237/- and maintaining the same penalties as in the first order. In the impugned order the Commissioner denied the benefit of exemption to the impugned goods on the basis that exemption is available only to goods of chapter heading 5406. In the appeals before us two issues are raised by the appellants. First issue concerns the competence of the Commissioner to adjudicate the dispute on remand of the case originally decided by the Deputy Commissioner. Second and the main issue is the eligibility of the assessees products, plastic tapes to the exemption extended to products at Sl. No. 1 of the table to Notification No.221/86-CE dated 2-4-1986.
2. Heard both sides.
3. The relevant table of the notification No. 221/86-C.E., dated 2-4-1986, containing goods entitled to the exemption listed in its column 5 is reproduced below:
Sl. No. Chapter, heading or sub-heading No. Description of inputs Chapter, heading or sub-heading No. Description of final product (1) (2) (3) (4) (5)
1. 39.20 Strips of plastics 5406.90 Strips and the like of synthetic textile material.
2. 44 Wood and articles of wood 47 or 48 Paper or paper board (including wastes and scrap thereof).
3. 51.02 Carded wool 51 Wool tops or yarn of wool.
In the Raj Pack Well Vs. UOI (supra) it was decided that classification of HDPE tapes under CSH 5406 was not correct. They were classifiable under CSH 3923.90 and eligible for exemption under Notification No. 221/86. The Honble High Court of Madhya Pradesh observed as follows:
the HDPE bags are the bags woven by the plastic strips and they, therefore, are goods of plastic and the material used for weaving those bags being the strips of plastic made from plastic granules, the strips of plastic used for weaving the aforesaid HDPE woven sacks has to be classified as an item under entry 39.20 of Chapter 39 and not under entry 54.06 of Chapter 54.
4. The counsel for the assessee submits that the substantive issue for decision is covered by the decision of this Tribunal in the case of Sharada Polymers Vs CCE, Tirunelveli reported in 2007 (142) ECR 483. It is submitted in the above case, following the decision of the Madhya Pradesh High Court and the Boards Order No. 8/92 dated 24/09/92, the Tribunal had observed that the item HDPE strips were eligible for exemption under Notification No.221/86. We therefore set aside the demand and penalties.
4.1 As regards the other issue, CBEC periodically issues orders defining the monetary jurisdiction of officers to adjudge confiscation of goods, demand duty not levied etc. The competent authority as per the latest Circular may decide the issue in denovo proceedings in the light of our findings above. No doubt the assessee shall be afforded an adequate opportunity to be heard in the matter. The appeals are allowed by remand. The appeals are disposed off.
(Operative part of the Order pronounced in Open Court on 13.05.08)
(P.KARTHIKEYAN) (P.G. CHACKO)
MEMBER (T) MEMBER (J)
BB
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