1991 (2) TMI 274 - AT - Central Excise

Tribunal affirms product classification based on end-use criteria, rejecting Revenue's appeal.

COLLECTOR OF C. EX. Versus MAHINDRA ENGG. & CHEMICALS PRODUCTS LTD.

The Tribunal dismissed the Revenue's appeal and disposed of the respondents' cross objection, affirming the classification of the repacked products under ... Classification of goods Issues: Classification of repacked products under Central Excise Law; Whether repacking and affixing brand name amounts to manufacture.In this case, the main issue revolves around the correct classification of products repacked by the respondents. The appellants argue that the dual pack marketed under their brand name constitutes a new and distinct product, assessable under Tariff Item 15A(1) of the Central Excise Tariff. On the other hand, the respondents contend that the repacking process does not amount to manufacture under the Central Excise Law, and therefore, the duty paid by mistake should be refunded. The classification dispute arises from whether the repacked product should be assessed under Tariff Item 15A or Tariff Item 68, considering the nature of the final product marketed at a higher value.The Collector of Central Excise (Appeals) had initially held that the classification under Tariff Item 15A as a new product was incorrect, setting aside the order of classification under Tariff Item 15A CET. The appellants argued that the resin is the main item in the dual pack and should be classified under Tariff Item 15A(1). However, the respondents maintained that the repacking process does not alter the nature of the products, and thus, the activity does not fall within the ambit of manufacture under the Central Excise Law.During the proceedings, both parties presented their arguments. The appellants relied on a specific case law to support their viewpoint on the classification issue. They emphasized that the products in the dual pack, when mixed, serve as an adhesive with limited shelf life, indicating classification under Tariff Item 68 based on end-use criteria. The respondents, on the other hand, raised a fresh ground that the process of dual packing does not constitute manufacture, citing relevant case laws to support their stance.The Tribunal analyzed the submissions and case laws cited by both parties. They noted that the key consideration for classification should be the end use of the product, especially in cases where mixing two components results in a distinct final product. Referring to the case laws presented, the Tribunal concluded that the adhesive formed by mixing the resin and hardener should be classified under Tariff Item 68, emphasizing the relevance of end use in classification decisions. Consequently, the appeal filed by the Revenue was dismissed, and the cross objection by the respondents was also disposed of, affirming the classification of the repacked products under Tariff Item 68 based on the end-use criteria.