1989 (6) TMI 217

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....econd and the third products have been classified under Tariff Item 4408.30. 2. Appellants' case is that these goods are non-excisable. As regards commercial plywood coated with duty paid phenol formaldehyde resin, it is contended by the appellants that the processing undertaken of application of phenol formaldehyde resin and then pressing the product at 100oC does not amount to manufacture as the resultant products remains plywood which falls under the same tariff heading as the commercial plywood prior to the process, that is to say Tariff Item 4408.90. 3. Insofar as paper faced laminated plywood and block board are concerned, it is submitted that these products are not excisable as they are manufactured out of duty paid plywood and dut....

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....The department alleges that these are new products which have a distinct market as they are specially used for flooring in motor vehicles and for purposes of constructing partitions. All this has not been denied before us by the respondents. We, therefore, hold that application of phenol formaldehyde on commercial plywood results in the emergence of a new commercial product and that further duty would be payable on this product under Central Excise Tariff Item 4408.90 on the undertaking of such process, regardless of the fact that duty has been paid on commercial plywood before such processing. 7. Accordingly the view of the Department in respect of these items is upheld. 8. However, the lower authorities have fallen into a serious error ....