Plastic filter screen classification by constituent material upheld, while concessional exemption under the tariff entry was allowed.

Plastic filter screens for Hydrosol were classifiable under Chapter 39 because the HSN notes to Heading 84.21 exclude filtering elements that must be classified by their constituent material. The fact that the goods were cut to size for use in machinery did not make them parts of filtering machinery, and the Board clarification did not alter that tariff position. Notification No. 15/94-C.E. was nevertheless held admissible once the goods fell under the relevant Chapter 39 entry, and the exemption could not be denied on an impermissible reading of its condition. Classification was upheld, but the exemption was allowed.

---

---

Issues: (i) Whether the imported plastic filter screen for Hydrosol was classifiable under Chapter 39 or as a part of filtering machinery under Heading 84.21 of the Central Excise Tariff Act, 1985; (ii) Whether the benefit of Notification No. 15/94-C.E. was admissible.

Issue (i): Whether the imported plastic filter screen for Hydrosol was classifiable under Chapter 39 or as a part of filtering machinery under Heading 84.21 of the Central Excise Tariff Act, 1985.

Analysis: The relevant HSN notes to Heading 84.21 cover parts of filters and purifiers, but expressly exclude filtering elements that are to be classified according to their constituent material. The goods were admittedly made of plastic, and the explanatory notes did not support treating them as parts of the machine merely because they were cut to size for use in Hydrosol. The Board clarification relied upon by the assessee did not alter the tariff position on the facts.

Conclusion: The goods were correctly classified under Chapter 39, and the challenge to the classification failed.

Issue (ii): Whether the benefit of Notification No. 15/94-C.E. was admissible.

Analysis: The notification granted concessional treatment to specified goods under Chapter 39, and the Tribunal held that the exemption could not be denied merely because of the condition relating to input credit where the imported goods were not manufactured goods in the usual sense. The assessee was entitled to rely on the notification once the goods were held to fall under the relevant chapter heading.

Conclusion: The benefit of Notification No. 15/94-C.E. was admissible in favour of the assessee.

Final Conclusion: The classification was upheld against the assessee, but the exemption notification was allowed, resulting in a mixed outcome.

Ratio Decidendi: Where a tariff note requires filtering elements to be classified according to their constituent material, a plastic filter screen is classifiable by its material rather than as a part of machinery, and an exemption notification applicable to that tariff entry cannot be denied on an impermissible reading of its condition.

---