1999 (9) TMI 175 - AT - Central Excise

Summary

Issues involved:
Classification of products under sub-heading 3922.90 or 6807.00 of the Central Excise Tariff Act.

Detailed Analysis:
1. Issue of Classification: The dispute in this case revolves around whether the products manufactured by the Appellants should be classified under sub-heading 3922.90 or under sub-heading 6807.00 of the Central Excise Tariff Act. The Assistant Collector approved the classification under sub-heading 3922.90, but the Collector (Appeals) overturned this decision and classified the products under sub-heading 6807.00. The Collector based his decision on the predominance of raw materials other than polyethylene resin, which he deemed as the essential character of the products.

2. Appellants' Argument: The Appellants argued that their products are made of synthetic resins with fillers like silica, quartz, dolomite, and stone dust, which act as supporting agents. They contended that despite the use of fillers, the essential character of the products remains that of plastic articles. They emphasized that the resin provides the essential character to the products, citing technical literature on plastic resin concrete and the high value of resin compared to filler materials.

3. Legal Precedents: The Appellants relied on legal precedents such as the Supreme Court's decision in Collector of Customs v. Bakelite Hylam Ltd., where the classification was based on the essential character criteria rather than predominance theory. They also cited the case of Crown Sanitarywares (P) Ltd. v. C.C.E., Madras, where fiber glass reinforced plastic articles were classified under a specific heading due to the use of plastic materials. The Appellants argued that the use of synthetic resin as a bonding agent gives their products the essential character of plastic.

4. Counterarguments: The Respondent argued that the Chemical Examiner's report supported the classification under sub-heading 6807.00, and the Explanatory Notes to the Harmonized System Nomenclature (H.S.N.) should be relied upon for classification. They also referred to a previous case involving agglomerated items and Interpretative Rule 3(b) for composite goods made of different materials.

5. Decision: After considering both sides' arguments, the Tribunal found in favor of the Appellants. They concluded that the essential character of the products is provided by the synthetic resin, which classifies the goods under sub-heading 3922.90 of the Central Excise Tariff Act. The Tribunal highlighted the technical properties of synthetic resin concrete and the rule that composite goods should be classified based on the material giving them their essential character. Therefore, the appeal was allowed in favor of the Appellants.