TaxTMI 
TaxTMI 
TaxTMI 
1992 (6) TMI 31
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....to passing of the impugned order are as follows. 2. Respondent No. 1 Company was incorporated as a Private Limited Company and in the factory situated at Tarapur manufactures P.V.C. Leather cloth. In May, 1981 the Company had acquired Central Excise Licence under Central Excises and Salt Act, 1944. The product manufactured is a plastic article and the process undertaken is by applying several layers of P.V.C. paste on thin cotton fabric. The cotton fabric is first treated with non-thermo-plastic compound which fills intrinsic holes and makes it suitable for carrying the P.V.C. The several layers of P.V.C. are then applied and the end product P.V.C. compound is 6 to 10 times in weight as compared to the base cotton fabric. The percentage of cotton fabric in the final product is only 8% to 15%, and the end product has special properties and the characteristics of foamed plastic. The Excise Department provisionally classified the product on August 5,1981 under Tariff Item 19(iii) of the First Schedule to the Central Excises & Salt Act. The Company was thereafter clearing the goods manufactured by paying the excise duty under the said Tariff Item. It is the claim of the Company that ....
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....nt was directed to finalise the refund claim within period of eight weeks from the receipt of the statement by the Company setting out the particulars of the refund amount claimed. The decision of the learned single Judge is under challenge. 5. Shri Desai, learned Counsel appearing on behalf of the Department, raised four contentions to challenge the legality of the judgment. The first submission of the learned Counsel is that the learned single Judge was in error in concluding that the item manufactured by the Company is liable to payment of excise duty under the residuary Tariff Item No. 68. Shri Desai submitted that the classification sought to be done by the Department under Tariff Item 19(iii) of the First Schedule to the Central Excises and Salt Act was accurate and was not required to be disturbed. It is not possible to accede to the submission of the learned counsel. Tariff Item 19 reads as follows :- 19. Cotton fabrics: 'Cotton fabrics' means all varieties of fabrics manufactured either wholly or partly from cotton and includes dhoties, sarees, chadders, bed-sheets, bedspreads, counter-panes, table-cloths, embroidery in the piece, in strips or in motifs, fabrics impregn....
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....ther artificial plastic materials The duty for the time being leviable on the base fabrics if not already paid plus thirty per cent ad valorem. IV. Cotton fabrics covered partially or fully with textile flocks or with preparations containing textile flocks such as flock printed fabrics. The duty for the time being leviable on the Base fabrics, if not already paid, plus thirty per cent ad valorem. Explanation I: "Base fabrics" meansfabrics falling under sub-item I of this item which are subjected to the process of embroidery or which are impregnated, coated or laminated with preparations of cellulose derivative or of other plastic materials or which are covered partially or fully with textile flocks or with preparations containing textile flocks." The plain reading of the expression 'cotton fabrics' which has been defined under Tariff Item No. 19 makes it clear that cotton fabric will cover all derivatives of fabrics manufactured either wholly or partly from cotton. The expression takes in its sweep fabrics impregnated or coated with preparations of artificial plastic materials, provided (a) in ....
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....undertaken to bring into existence P.V.C., then it is not open for the department to levy duty or recover duty under Tariff Item No. 19 on the final product. In our judgment, the view taken by the learned single judge does not suffer from any infirmity and the contention of Shri Desai that the final product cannot be brought within the residuary Item No. 68 cannot be accepted. 6. The second contention urged by Shri Desai is that the learned single Judge was in error in holding that the Company was entitled to the advantage of exemption Notification No. 182/82 dated May 11, 1982. The notification was published by the Central Government in exercise of powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules and articles made of plastic falling under Item No. 68 of the First Schedule to the Central Excise Act were exempted from whole of the duty payable thereon. The learned single Judge held by accepting the claim of the Company that as the final product falls under Tariff Item No. 68, the whole of the duty leviable thereon stands exempted from May 11,1982 onwards. Shri Desai submitted that even assuming that the duty was leviable under Tariff Item No. 68, still the ben....