1990 (11) TMI 227 - AT - Customs

Issues Involved:
1. Classification of synthetic waste (slivers and rovings) under the Central Excise Tariff.
2. Applicability of additional duty on the synthetic waste.
3. Interpretation of Tariff Entries 18(iv) and T.I. 68.
4. Relevance of manufacturing process and stage of waste generation.
5. Consistency of findings and decisions by the Assistant Collector and Collector (Appeals).
6. Applicability of previous Tribunal and High Court decisions.

Issue-wise Detailed Analysis:

1. Classification of Synthetic Waste Under Central Excise Tariff:
The primary issue was whether the synthetic waste, consisting of slivers and rovings, should be classified under Tariff Item 18(iv) CET or T.I. 68. Both parties agreed that the material in question was non-cellulosic waste. The learned Counsel for the respondents argued that the waste should be classified under T.I. 68, citing a previous Tribunal order (No. D-395/86) which held similar waste under T.I. 68. The learned DR contended that even if the explanation to 18(iv) was applicable, the waste would still attract duty under T.I. 68.

2. Applicability of Additional Duty:
The question of additional duty hinged on the classification of the material. The learned Counsel for the respondents argued that due to the explanation to 18(iv), the synthetic waste should be classified under T.I. 68 and not attract additional duty under 18(iv). The learned DR agreed that if the waste did not fall under 18(iv), it would still attract duty under T.I. 68 due to the explanation added in 1980.

3. Interpretation of Tariff Entries 18(iv) and T.I. 68:
The learned Counsel emphasized the distinction between Customs Tariff Heading 56.01/04 and Central Excise Tariff Entry 18(I), noting that 56.01/04 includes man-made fabrics and waste, while 18(I) does not. The learned DR acknowledged that the basic issue was the classification under 18(iv) CET or T.I. 68, agreeing that non-cellulosic waste was classifiable under T.I. 68 CET.

4. Relevance of Manufacturing Process and Stage of Waste Generation:
The learned Counsel argued that the waste, consisting of cut slivers and rovings, arose during the post-fibre and post-filament stage of manufacture, thus falling outside the ambit of 18(iv) CET. The Tribunal noted that the Assistant Collector had not discussed the manufacturing process, while the Collector (Appeals) had not cited any authority regarding the technical aspects of the manufacturing process and the stage of waste generation.

5. Consistency of Findings and Decisions:
The Tribunal observed inconsistencies in the findings of the Assistant Collector and the Collector (Appeals). The Assistant Collector concluded that the waste fell under Item No. 18(I) CET but switched to 18(iv) CET in the operative portion of the order. The Collector (Appeals) excluded 18(iv) by virtue of the explanation and classified the material under T.I. 68. The Tribunal found that both sides had not produced sufficient evidence or technical literature to support their contentions.

6. Applicability of Previous Tribunal and High Court Decisions:
The Tribunal considered previous decisions, including Order No. D-395/86 and the Bombay High Court judgment in Union of India v. Sir Kastur Chand (P) Ltd., which held similar synthetic waste under T.I. 68. The learned DR acknowledged the similarity of the present case to those decisions. The Tribunal noted that the scope of the Third-Member Bench was restricted to the points of difference formulated by the Members, and the merits of Item 18-I(i) could not be reconsidered.

Conclusion:
The Tribunal set aside the order of the Collector (Appeals) and remanded the case for reconsideration in light of the observations made. The appeals were disposed of accordingly, with the majority opinion dismissing the appeals and upholding the classification under T.I. 68, following the ratio of previous Tribunal orders and the Bombay High Court judgment.

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