1996 (7) TMI 144

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....before its processing. 2.The case of the appellant-company is the following. Appellant is engaged in processing commercial plywood by applying Phenol Formaldehyde Resin under 100 per cent heat and pressure and coats the plywood with wire mesh, either on one side or on both sides so as to make it slip-proof commercial plywood. The product is mostly used in body building of vehicles or for flooring etc. On 3-9-1986, the Assistant Collector of Central Excise issued show cause notice to the appellant company, in which it was stated that since non-slip plywood is a different product it is liable to duty as falling under sub-heading 4408.90 (Chapter 44 of the Schedule to the Central Excise Tariff Act, 1985). Appellant in the reply has explaine....

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....se in 1975 that "duty should be charged at the plywood stage as commercial plywood and subsequent alterations etc. should be ignored" (vide CBE & C Bulletin for January-March, 1975). Such an advice is irrelevant in dealing with the tariff prescribed in 1985. 6.CEGAT has considered the factual position whether the process of applying Phenol Formaldehyde Resin on plywood is only a nominal process which does not affect the identity of the commodity or whether it is a substantial process resulting in the emergence of a new commercial product. According to the CEGAT, answer to the question whether any particular processing would result in the emergence of a new commercial product depends on various factors like - to what extent the value is a....

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....ord any useful support to the appellant's contention. The question considered therein was the stage at which the plywood used for manufacturing plywood "circles" became liable to excise duty. In Collector of Central Excise, Bombay v. Popular Cotton Covering Works - 1994 (73) E.L.T. 264, the contention raised by the assessee was that the works done by him for winding cotton or fibre-yarn on the electric wire does not amount to manufacture of a new product. The contention was upheld by this Court on the basis of the finding arrived at by CEGAT that no new commercially recognised article distinct from electric wire has come into existence. It was pointed out in the decision that the excise authorities did not lead any evidence to establish tha....