1997 (6) TMI 274 - AT - Central Excise

Summary

Issues: Classification of manufactured goods under Chapter 44

In this judgment by the Appellate Tribunal CEGAT, the issue at hand is the classification of goods manufactured by the appellant under Chapter 44. The appellant had initially claimed classification under 4406.10 for their products "Plain Particle Board Sitawood B.M." However, the Assistant Collector amended the classification to Heading 4406.90 as "Other Particle Board" as he observed that waxing was done after the board was manufactured, making it distinct. The Collector (Appeals) upheld this classification, leading to the current appeal.

Analysis:

The appellant contended that waxing of plain particle board did not result in the creation of a new commodity with distinct features, arguing that the character of the board remained the same. They cited various Supreme Court judgments to support their claim, where activities like covering copper wires or galvanizing steel were not considered as manufacturing new products. On the other hand, the respondent argued that the waxing process imparted waterproofing qualities to the board, making it suitable for use in Printing Industries.

Upon careful consideration, the Tribunal examined the Assistant Collector's observations and the judgments cited by the appellant. The Tribunal noted that in the previous Tariff, particle board was a block term, but the C.T.A., 1985 introduced separate divisions and varieties. The Tribunal analyzed the Supreme Court's decision on wax proofing cotton fabrics and the Tribunal's judgment on waxing tissue paper, emphasizing that such processes could result in the creation of distinct commodities. The Assistant Collector's differentiation between plain particle board and waxed particle board was deemed appropriate, leading to the decision to classify the waxed particle board under Heading 4406.90.

Furthermore, the appellant raised concerns about being asked to pay differential duty without a show cause notice following the Collector (Appeals) orders. However, the Tribunal clarified that the issue under consideration was solely related to the classification of the plain particle board and did not extend to the payment of differential duty. Therefore, the Tribunal upheld the lower orders, confirming the classification under Heading 4406.90 and dismissing the appeals.