Customs, Excise and Gold Tribunal - Delhi
Bradma Of India Ltd. vs Collector Of C. Ex. on 30 July, 1990
Equivalent citations: 1990(50)ELT533(TRI-DEL)
ORDER S.L. Peeran, Member (J)
1. Both the appeals pertain to the same appellant and hence they are being taken up together for disposal.
2. In Appeal No. 2309/86-C, the question that arises for consideration is as to whether the product 'Model Plastic Cards' manufactured by the appellants, falling under Tariff item 15A(2) of CET are entitled for the benefit of exemption under notification No. 68/71 dated 29-5-1971 as amended.
3. In Appeal No. 2625/86-C, the question to be decided is as to whether the appellants are entitled for refund of duty paid by them under protest for the period from 1-1-1983 to 30-6-1983, in case of their being entitled for eligibility of exemption under Notification No. 182/82 dated 11-5-1982.
4. The brief facts of the case in Appeal No. 2309/86-C are that the appellants are manufacturers of 'Model Plastic Blank Cards' falling under Tariff Item No. 15A(2) and they had sought for exemption under Notification No. 68/71 dated 29-5-1971 as amended. The Assistant Collector had, in the order-in-original dated 15-11-1982, rejected the classification list bearing No. 1/82 dated 22-2-1982 filed by the appellants for classification of their product under Tariff Item 15A(2) and had classified the same under Tariff Item 68 of CET. On appeal to the Collector, Central Excise (Appeals), Bombay, the appellants contention for classification of their product under Tariff Item 15A(2) was upheld but, however, their prayer for benefit of exemption under Notification No. 68/71 dated 25-5-1971 was rejected by the learned Collector.
5. The main ground on which the learned Collector rejected the appellants' claim was that the exemption Notification No. 68/71 is specific and does not apply to the appellants as the proviso of the said notification lays down that the exemption would be applicable provided such articles are produced out of artificial resin or plastic materials or cellulose esters or ethers falling under sub-item (1) of Item 15A and on which the duty of excise has been paid. The Collector held that the articles of plastic manufactured by the appellants had been made from another article of plastic, namely, sheets and hence, they were not entitled for exemption claim under the notification.
6. Shri Gopal Prasad, learned Consultant for the appellant, submitted that there was no dispute with regard to the product having been manufactured out of rigid plastic sheets. The rigid plastic sheets are produced out of artificial resin. Shri Gopal Prasad submitted that a simple reading of the notification discloses that articles of plastics, if it had emerged from an intermediate product which had been manufactured from artificial resin, then, the benefit of the notification cannot be denied. He submitted that the learned Collector had erred in coming to the conclusion that the notification would not apply to articles of plastics, if made from intermediate products arising from artificial resins. He relied upon the case of Mahindra Engineering & Chemical Products Ltd. v. Collector of Central Excise, Pune -[1984 (18) ELT 680 (Tri.)] wherein it had been held that "The entry 22F clearly covers all manufactures made from glass fibres/yarn irrespective of the fact that the raw materials undergo some intervening processes in the same or another factory before ending up in the final manufacture". Shri Gopal Prasad submitted that applying this ruling, the appellant's claim for exemption under the relevant notification cannot be denied simply because an intermediate product - sheets - had arisen from the artificial resins. He submitted that the appellants had purchased duty paid rigid plastic sheets and from that had made Model plastic playing cards by cutting them into various sizes as per requirement of the customers. The notification granted exemption to articles made out of plastics. The proviso of the notification had laid down that such articles are to be produced out of artificial resins. The plastic sheets had been made out of artificial resins and hence, they were entitled for the exemption under the said notification.
7. Shri L. Narsimha Murthy, learned Departmental Representative, submitted that the notification would be applicable only if articles of plastic had arisen from artificial resins directly and not when there was an intermediate product. In the instant case, the plastic sheets were intermediate products and as such, benefit cannot be granted to the appellants.
8. We have heard both the sides, perused the records and carefully considered the submissions. In this case, there is no dispute with regard to the classification of the product under Tariff Item 15A(2). The description of the Tariff Item 15A reads "Artificial or synthetic resins or plastic materials and other materials and articles specified below:-
"15A(2) Articles made of plastics, all sorts, including tubes, rods, sheets, foils, sticks, other rectangular or profile shapes, whether laminated or not, and whether rigid or flexible, including layflat tubings, and polyvinyl chloride sheets, not otherwise specified.
X X X X X Explanation. - For the purpose of sub-item (2), "plastics" means the various artificial or syrfthetic resins or plastic materials or cellulose esters and ethers included in sub-item (1)"
9. The Notification No. 68/71 dated 29-5-1971 as amended under which the appellants have sought for exemption is reproduced below -
"The Central Government has exempted articles made of plastics, all sorts, falling under sub-item (2) of item No. 15A of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), except -
i) rigid plastic boards, sheeting, sheets and films, whether laminated or not; and
ii) flexible polyvinyl chlpride sheeting, sheets, films and lay-flat tubings not containing any textile materials, from the whole of the duty of excise leviable thereon:
Provided that -
a) such articles are produced out of the artificial resins and plastic materials in any form falling under sub-item (1) of the said item, on which the duty of excise or the additional duty under section 2A of the Indian Tariff Act, 1934 (32 of 1934), as the case may be, has already been paid; or
b) such articles are produced out of scrap of plastics".
10. From the reading of the proviso of the notification, it is clear that if the articles of plastic are produced out of the artificial resin and plastic materials in any form under sub-item (1) of the said item, on which the duty has been paid, then such articles of plastic are entitled for exemption under the above noted notification. In this case, admittedly the appellants have purchased duty paid sheets made out of resins and plastic materials falling under sub-item (1) and have made therefrom plastic blank cards. The reasoning given by the Collector (Appeals) that the articles of plastic have to be produced directly from artificial resins is not, in our view, a correct reading. Applying the ratio of the ruling cited by Shri Gopal Prasad in the case of Mahindra Engg. and Chemical Products Ltd. (supra), the emergence of an intermediate product, namely, the plastic sheet out of artificial resin, does not preclude the appellants from claiming the benefit of the exemption of the above noted notification. Therefore, the appellants are entitled to succeed in Appeal No. 2309/86-C. The appeal is allowed.
11. Appeal No. 2625/86-C deals about refund claim of the appellants for the duty paid under protest. We have held on merits that the appellants are entitled to claim exemption under the above notification. In this appeal, the refund claim was rejected on the ground that the benefit of Notification No. 182/82 is not available to the appellants. The refund claim pertains to the period 1-1-1983 to 30-6-1983 which pertains to the period after Tariff Item 15A was restructured. As a consequence of the said restructuring of Tariff Item 15A, the present goods fell for classification under Item No. 68 CET. Notification No. 182/82 reads as follows -
"In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts articles made of plastics, falling under Item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), from the whole of the duty of excise leviable thereon:
Provided that -
a) such articles are produced 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 said First Schedule on which the duty of excise or the additional duty under section 3 of the Customs Tariff Act, 1975 (51 of 1975), as the case may be, has already been paid; or
b) such articles are produced out of scrap of plastics.
Explanation. - For the purpose of this notification, 'plastics' means the various artificial or synthetic resins or plastic materials or cellulose esters and ethers included in sub-item (1) of Item No. 15A of the aforesaid First Schedule".
12. A reading of this notification discloses that it is not materially different from the notification No. 68771 dated 29-5-1971. The appellants are, therefore, entitled to claim the benefit under Notification No. 182/82 dated 11-5-1982 as the articles of plastics viz. blank cards have been produced out of an intermediate product which has emerged from artificial resin or plastic articles. In this appeal, the authorities have not considered the question of limitation. Therefore, the matter in appeal No. 2625/86 is remanded to the Assistant Collector to grant refund to the appellants, after examining the limitation aspect.
The operative portions of the orders in both the appeals were pronounced in the open court.