Tariff classification of plastic-waste products failed where chapter-note process was absent, and later exemption erased duty liability.

Finished products manufactured from plastic waste were not classifiable under Chapter 54 or 55 because they were not obtained by the process required by the relevant chapter note. On the facts found, the Tribunal treated the classification under those chapters as unsustainable and rejected the corresponding duty demands, interest and penalties for the first disputed period. For the later period, the subsequent statutory amendment and exemption covered goods manufactured from plastic waste, which also negatived duty liability. The operative effect was relief to the assessees on all appeals, with the tax demands and associated consequences set aside.

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Issues: Whether the finished products manufactured from plastic waste were classifiable under Chapter 54 or 55 of the Central Excise Tariff Act, 1985 and, consequently, whether the duty demands, interest and penalties were sustainable for the disputed periods.

Analysis: The relevant classification under Chapter 54 depended on the product being obtained through the process contemplated by Chapter Note 1, which the manufactured goods were not. The Tribunal followed the earlier view that such goods did not fall under Chapter 54 or 55 on the facts found. It further noted that the subsequent statutory amendment and exemption covered the goods manufactured from plastic waste for the later period in dispute, thereby negativing the duty liability for that period as well.

Conclusion: The finished goods were not liable to be classified under Chapter 54 or 55 on the facts found, and the demands for both periods were unsustainable.

Final Conclusion: The duty, interest and penalties could not be sustained, and the assessees were entitled to relief on all the appeals.

Ratio Decidendi: Where the product is not obtained by the process required by the relevant chapter note, tariff classification under that chapter cannot be sustained, and a later statutory exemption or amendment can extinguish the corresponding duty liability for the covered period.

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