TMI Blog2017 (12) TMI 708X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in terms of weight of the material as well as the value of the material. The classification of composite materials is required to be done in terms of Rule 3(b) of the General Rules for Interpretation of Central Excise Tariff. This Interpretation Rule provides that composite goods made up of more than one material shall be classified as if they consisted of the material which gives them the essential character insofar as this criterion is applicable - By appreciating the nature of the present commodity, which is doors and frames, the essential character stems from the wood which forms the core material without which the doors and frames will fail to have any rigidity or shape. No doubt, the plastic gives the door the additional charact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue of show-cause notice covering the period 1.4.2003 to 5.12.2005, the original authority finalised the classification of the goods manufactured by the appellant under Central Excise Tariff Heading (CETH) 3925.20 as articles of plastics . The claim of the appellant that the goods were rightly classifiable under CETH 4410.19 and 4410.90 as articles of wood was rejected. The adjudicating authority finally demanded Central Excise duty amounting to ₹ 29,39,664/- along with interest and penalties from the appellant. Penalties were also imposed under Rule 26 of the Central Excise Rules, 2002 on Shri Aravind A. Shetty, Shri Balaji Sooda and Shri Jayaraj Hegde, Directors of the appellant-company. When the order was challenged in appeal befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antly made of wood, both in terms of weight as well as in terms of value of the relevant materials. The weight as well as value of plastic is comparatively minor when compared to the wood. Accordingly, the goods are rightly classifiable as products of wood and more specifically under CETH 4410.19 (Wooden doors) as well as under 4410.90 (wooden frames). Such a claim of the appellant has been ignored by the authorities below, by taking a view that the goods manufactured by them are marketed as FRP Composite Doors and Frames . The authorities below have further taken the view that the goods will be classifiable under CETH 3925.20 as builder s ware made of plastics . This view was taken by Revenue since the essential characteristics of the good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x court has observed that HSN Explanatory notes will have persuasive value as long as the tariff is aligned with HSN. (v) He also referred to the CBEC Circular No.16/88-CX-3 dated 10.8.2008 in which the Board has clarified that the classification of composite articles of plastics made out of combination of plastic and non-plastic materials is to be made depending on the predominance of weight and value of the component materials which have gone into the manufacture of such composite articles of plastic. (vi) He also relied on the case of Commissioner vs. Sima FRP (P) Ltd.: 2000 (125) ELT 539 (Tribunal) in which classification of similar products came up before the Tribunal. In the above case, flush doors made of wood on which PVC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CBEC has occasion to clarify as to how the classification of composite articles of plastics as well as other materials are to be made. In the Circular dated 10.8.88, the CBEC has clarified as follows: 2. The above mentioned issues have been examined by the Board. As regards the classification of composite articles of plastics made out of combination of plastic and non-plastic materials, the Board is of the view that the classification of such goods as articles of plastics of Chapter 39 of the Schedule to the Central Excise Tariff Act, 1985 would depend on the predominancy of weight and value of the component materials which have gone into the manufacture of such composite articles of plastics, keeping in view the Rules of Interpret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a similar type in the sense that such doors are made out of wood coated by FRP skins. Hence, we conclude that the goods in question are rightly classifiable under CETH 4410.19 as articles of wood (door) as well as under CETH 4410.90 as wooden frames. The appellant, during the period under dispute, will be entitled to clearance at nil rate of duty in terms of Notification No.10/2003 (Sl. No.12). Consequently, the impugned Order-in-Appeal No.80-83/2008 dated 30.4.20087 is set aside and the appeal Nos. E/576 to 579/2008 filed by the assessee as well as the Directors are allowed. 8. Now, we turn to valuation dispute. As held by us above, once the goods are classified under Chapter 44, they enjoy the exemption under Notification No.10/2003 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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