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M/s. Fimen Fibre Products Pvt. Ltd. Versus The Commissioner of Central Excise, Customs & Service Tax

2017 (12) TMI 708 - CESTAT BANGALORE

Valuation - classification of goods - FRP Composite Doors and Frames - whether classified under CETH 3925.20 as articles of plastics or under CETH 4410.19 and 4410.90 as articles of wood - Held that: - the appellant is engaged in the manufacture of FRP Composite Doors and Frames. Such articles are made from solid block of sal wood on which skin of fibre reinforced plastic material is glued, which is said to give the plastic moisture resistance - The Chartered Engineer has certified that the prod .....

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s 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 character of moisture resistance but keeping the nature of use of the goods, we are of the view that the essential character is given by the wood and hence, in terms of Rule 3(b) of the Rule .....

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2-2017 - Shri S. S. Garg, Judicial Member And Shri V. Padmanabhan, Technical Member Mr. K. S. Ravi Shankar, Advocate For the Appellant Dr. Ezhilmathi, AR For the Respondent ORDER Per : V. Padmanabhan Appeals bearing No.E/576 to 579/2008 have been filed against Order-in-Appeal No.80-83/2008 dated 30.4.2008 and Appeal No.E/812/2007 has been filed against Order-in-Appeal No.126/2007 dated 31.7.2007. 2. The appellant-assessee is engaged in the manufacture of "FRP Composite Doors and Frames" .....

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(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-co .....

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appellant, in addition to the price of the goods, also collected from their customers, certain amounts towards erection of the doors at the customers premises. Department was of the view that such amounts recovered by the appellant is required to be added to the price of the goods and excise duty is required to be paid. Accordingly, the authorities below demanded the differential duty amounting to ₹ 1,33,718/- along with interest and penalties. 3. With the above background, we heard Shri K .....

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submitted that the goods were predominantly 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 m .....

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which it has been certified that the wood predominates over plastic in the goods manufactured by the appellant. He further cited the certificates given by a few persons in the trade to the effect that the goods are generally known as wooden doors with fibre coating. (iii) The learned counsel submitted that if the goods are classifiable under CETH 4410.19 and 4410.90, then the appellant will be entitled to the benefit of Notification No.10/2003-CE dated 1.3.2003 which was available during the pe .....

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ied under CETH 4410 whatever be the thickness of plastic since it is the rigid strong wood portion which allows the panel to be used as a structural element. He cited the Apex Court decision in the Wood Craft Products Ltd. reported in 1995 (77) EKT 23 (SC), in which the apex 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 tha .....

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on which PVC skins were glued were ordered to be classified under CETH 4410.11. (vii) Finally, he submitted that both the impugned orders may be set aside. 5. The learned DR, Dr. Ezhilmathi, reiterated the impugned orders. 6. After hearing both sides and perusal of the records, we note that the appellant is engaged in the manufacture of "FRP Composite Doors and Frames" . Such articles are made from solid block of sal wood on which skin of fibre reinforced plastic material is glued, wh .....

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n 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. The lower authorities have taken a view that out of the two materials - wood as well as plastic - the essential character is given by plastics, since the goods are marketed as FRP Composite Doors and Frames . Consequently, the lower authorities have ordered classification under Chapter 39. .....

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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 Interpretations to the Schedule to the Central Excise Tariff Act, 1985. While deciding the classification of such products, due regard should given to the trade identity of the product, i.e. how the same is known in the commercial/trade parlance. 6.2 By appre .....

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