1990 (6) TMI 151 - AT - Central Excise

Reclassification Ruled Unjustified: Case Summary

The Tribunal found the reclassification of 7-ply laminated sheets unjustified as it lacked new circumstances or changes in law. Orders from 7-10-1985 and ... Classification of goods Issues Involved:1. Classification of 3-ply, 5-ply, and 7-ply laminated films.2. Classification of plastic multilaminated collapsible tubes.3. Eligibility for exemption under Notification 182/82 and Notification 118/75.4. Marketability and excisability of the laminated films.5. Legitimacy of reclassification by the Assistant Collector.Issue-wise Detailed Analysis:1. Classification of 3-ply, 5-ply, and 7-ply Laminated Films:The appeals centered around the classification of these laminated films. Initially, the Assistant Collector classified:- 3-ply and 7-ply laminated films under T.I. 68 but denied the benefit of Notification 182/82.- 5-ply laminated films were considered intermediate products not liable to duty under T.I. 27 (7), unless removed from the machine.The Collector upheld these classifications but granted the benefit of Notification 118/75 for 3-ply and 7-ply laminates used in the factory.2. Classification of Plastic Multilaminated Collapsible Tubes:The collapsible tubes made from 7-ply laminated films were classified under T.I. 68, with the benefit of Notification 182/82 being denied due to their composite nature. The Collector confirmed this classification.3. Eligibility for Exemption under Notification 182/82 and Notification 118/75:The appellants claimed exemptions under Notifications 182/82 and 118/75. The Assistant Collector and Collector denied the benefit of Notification 182/82, arguing that the products were not solely made out of material falling under T.I. 15A (i). However, they granted the benefit of Notification 118/75 for items used within the factory.4. Marketability and Excisability of the Laminated Films:The appellants argued that the laminated films (3-ply, 5-ply, and 7-ply) were not marketable as they were not ordinarily bought and sold in the market, thus questioning their excisability. They cited Supreme Court decisions emphasizing that marketability is essential for excisability.5. Legitimacy of Reclassification by the Assistant Collector:The Assistant Collector reclassified 7-ply laminated sheets from T.I. 68 to T.I. 27 (7) through a subsequent show cause notice. The Tribunal found this reclassification unjustified, citing that there was no change in circumstances or law to warrant it. The proper remedy for the Revenue would have been to appeal the initial classification.Findings and Judgments:Appeal No. 239/88-C:The Tribunal found the reclassification of 7-ply laminated sheets from T.I. 68 to T.I. 27 (7) by the Assistant Collector unjustified, as it was based on a mere change of opinion without new circumstances or changes in law. Thus, the orders dated 7-10-1985 and 27-10-1987 were not sustainable.Appeal No. 2215/89-C:Following the unsustainability of the order dated 7-10-1985, the subsequent order dated 17-10-1988 and the related appeal order dated 8-6-1989 were also deemed unsustainable.Appeal No. 265/85-C:The classification under T.I. 68 was not contested by the department. The Tribunal upheld the classification under T.I. 68 but denied the benefit of Notification 182/82, applying the Supreme Court's decision in the Geep Flashlight case. The benefit of Notification 118/75 was correctly extended.Conclusion:The products were classified under T.I. 68 of the erstwhile Central Excise Tariff and were eligible for the benefit of Notification 118/75. However, the benefit of Notification 182/82 was not available to these products. The appeals were allowed in these terms.