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2018 (9) TMI 1713 - AT - Central ExciseClassification of goods - Pet Flakes - whether classified under CETH 3907.60 or CETH 39159042 of the Central Excise Tariff Act, 1985? - eligibility for exemption under Sl.No.78 of Notification No.4/2006-CE dt. 1.3.2006. Held that:- The important requirement for goods to be classified in Heading 39.07 is that they should be ‘primary forms” of plastics. What are primary forms is amplified in Chapter Note 6the important requirement for goods to be classified in Heading 39.07 is that they should be ‘primary forms” of plastics. What are primary forms is amplified in Chapter Note 6 - It is thus evident that primary forms for the purpose of Chapter 39 are constituent goods which are ‘primary” in form and meant to be converted by further polymerisation or chemical synthesis into other materials of Headings 3901 to 3914.It is thus evident that primary forms for the purpose of Chapter 39 are constituent goods which are ‘primary” in form and meant to be converted by further polymerisation or chemical synthesis into other materials of Headings 3901 to 3914. Discernably, the appellants are not doing any chemical synthesis or polymerization processes on the PET bottles used by them as raw material. On the other hand, the process involves only putting the used PET bottles into a crusher which makes them small pieces and subjecting the resultant goods to washing and packing after which they are cleared from the factory. Though the appellant has argued that they are manufacturing ‘flakes”, but, what is being manufactured is only ‘parings” of PET bottles. True, these ‘parings” eventually get converted into new PET bottles, however that will not make the final product of the appellant eligible for classification as ‘primary form of plastic”. The ‘flakes” which are included as ‘primary form” in Note 6 of Chapter 39 will surely have to be a ‘primary grade material”. This is certainly not the case here. Appeal allowed - decided in favor of Revenue.
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