Classification of thick compression-moulded plastic goods turned on trade understanding, not thickness alone; exemption was upheld.

Plastic products made by compression moulding, though about 30 mm thick, were examined by their commercial identity and technical understanding rather than by thickness alone. The record showed that the goods were thick, rigid rectangular pieces used in machining textile machinery components, and not thin, flexible sheets produced by the normal extrusion process. Dictionary and trade meanings of sheet, slab and block supported treating them as slabs or blocks. On that basis, exemption could not be denied on the premise that the goods were sheets. The demand, confiscation and penalty were set aside, and the assessee succeeded.

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Issues: Whether the plastic products manufactured by the assessee, having thickness of about 30 mm and produced by compression moulding, were correctly classifiable as rigid sheets or were in substance slabs or blocks, and whether exemption under Notification No. 68/71-C.E. could be denied on the footing that they were sheets.

Analysis: The determining factor was the true nature of the article in trade and in common technical understanding. The record showed that the products were produced as thick, rigid rectangular pieces by compression moulding, not by the normal extrusion process associated with sheets. The evidence, including the departmental witness's own description, the commercial and dictionary meanings of sheet, slab and block, and the functional use of the goods in machining of textile machinery components, all indicated that the goods were not thin, flexible sheets but solid slabs or blocks. The departmental reliance on the thickness threshold in dictionary material was rejected as too literal, because a mere reference to thickness could not make any thick solid body a sheet. On the facts, the goods were not shown to answer the description of sheets for the purpose of denying the exemption.

Conclusion: The goods were held to be slabs or blocks and not sheets, so exemption under Notification No. 68/71-C.E. could not be denied on the basis adopted by the department. The demand, confiscation and penalty were set aside, and the appeal succeeded in favour of the assessee.

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