Full Judgment
2. Before the Assistant Collector, the appellants argued that these products are manufactured from Polyster Film which are lacquered arid that even after lacquering, the products still remained as Polyester Film falling under T.I. 15A(2) CET. They also referred to a Trade Notice (No. 160/82 dated 13-8-1982) issued by the Collector of Central Excise, Baroda and to a letter of the Central Board of Customs & Excise dated 7-4-1984. The Asstt. Collector rejected the arguments and observed that the products in question could not be identified or described as Polyester Film and that these products would not be recognised as Polyester Film in trade parlance as coated polyester. The three end product have a specific name, characteristics and use. He held that the raw material (Polyester Film) having been subjected to manufacturing process it lost its identity and each of the products with different name has specific use. He, therefore, held that "the end products manufactured out of the basic raw material, i.e. Polyester Films used by the assessee are entirely different new products and it cannot be said that these are Polyester Films merely processed with some chemicals". He classified the goods under T.I.68 and rejected the claims of the appellants for classification under T.I. 15A(2) with exemption Notification No. 231/82-CE.3. The appellants filed an appeal before the Collector (Appeals). The Collector allowed the appeal observing as follows :- "The issue for determination in this appeal is whether the products are polyester films and continued to be so after coating. Test report on the samples of similar products manufactured by the appellants, communicated to them under letter No. AR-l/Sample/84-A dated 5-1-1985 issued by the Superintendent Central Excise, Ankleshwar shows that the product are plastic film made of polyester with thickness less than 0.25mm. It is also brought out by Concise Chemical and Technical Dictionary by a Fennet that lacquering was nothing but coating liquid which dries rapidly by sovelent evaporation. In this case it is found that the products polyester films coated with lacquer containing some photo sensitive chemicals and that change what is brought is only physical in nature and that the product lacquered polyester film before and after lacquering, as pointed out by Dr. S.P. Patnis, as acknowledged authority in the field. As such it is difficult to endorse the view of the Assistant Collector that the raw materials has not undergone any process of lacquering and that the polyester films has become a new product under 68.
In the result, the appeal succeeds and is accordingly allowed. The order of the Asstt. Collector appealed against is set aside with the directions to classify the products under 15A(2) with the benefit of Notification No. 231/82, as amended." 4. Aggrieved by the Collector's order, the Revenue filed the present appeal before us. Smt. J.K. Chander, JDR argued that the products are really photographic film and, therefore, lost their identity as polyester film coated or lacquered. She reiterated the arguments contained in the Asstt. Collector's order and submitted that the classification under T.I. 68 CET was correctly ordered.
5. Opposing the arguments, the learned Consultant for the respondents submitted that the goods are squarely covered by item 15A(2). He relied on the process of manufacture which included lacquering polyester film.
He submitted that this lacquering could be easily removed. He opposed the arguments that these films were photographic and pointed out that at no stage was such an allegation made. He also referred to the Trade Notice issued by the Collector of Central Excise, Baroda and submitted that the test reports, copies of which were filed before us, show that the classification as ordered by the Collector (Appeals) was correct.
He also referred to an affidavit of Dr. S.P. Potnis filed before the Collector (Appeals), Bombay. He further referred to Board's letter dated 15-7-1982.
6. We have considered the arguments of both sides. After examining the submissions made about the process of manufacture and perusing the test reports as also the affidavit filed by Dr. S.P. Potnis before the Collector of Central Excise (Appeals), we find it difficult to accept that the products of the appellants lost their identity as Polyester Films once they are lacquered. The Board's letter dated 15-7-1982 and the Collector's Trade Notice dated 13-8-1982 show that even in the department's view, lacquered polyester films (duty paid) will be chargeable to duty again under Item 15A(2) after the amendment of T.I.15A(2) in the budget of 1982-83. Item 15A(2) after the amendment reads as follows :- "Boards, sheeting, sheets and films, whether lac- Fifty per cent ad quered or metallised or laminated or not; lay flat tubings valorem" not containing any textile material.
7. Taking into consideration the wording of the Tariff and keeping in view the test reports of the Assistant Chemical Examiner, Central Excise, Baroda and the other evidence placed before us, including the affidavit of Dr. S.P. Potnis and considering all facts, we hold that the impugned goods are correctly classifiable under T.I.15A(2) of the CET. We, accordingly, dismiss the appeal.