Full Judgment
The mixing is done at an elevated temperature and the final product from the mixer is cooled in a cooling vessel. The mixture is called the P.V.C. Compound which will be in the form of free-flowing powder. The above P.V.C. compound is fed into the hopper of the blown film extrusion plant which is a continuous machine for making plastic film by blown method, In the extruder the P.V.C. Powder is beated up melted to a suitable viscosity forced through the annular gap of a die and then bunched to form a bubble shape. The bubble is filled with ala to get the correct size and pinched in the take off roller which continuously pull the material from the die in the form of a bubble.
The bubble is also cooled simultaneously to room temperature. The flattened bubble called the lay fiat tubings is continuously wound alter slitting at either ends on two separate paper tubes to form continuous length of P.V.C. Film Rolls. The above rolls are out into various sized after trimming of the edges which is normally uneven.
(1) At the time of mixing the Resin with ingredients there is an invisible waste about 0.25 to 0.5% by way of evaporation and spillage.
(2) At the time of starting the plant before forming the uniform bubble, the material from the die is in the form of solid lumps of P.V.C. Compound which have to be removed and wasted to get the correct setting of the die. During the adjustment of die whatever material comes out of the die will be the incidental waste in the form of lumps of the P.V.C. Compound. This is about 4 to 4.5% of P.V.C. Compound.
(3) The mother film roll removed from the winder always has uneven edges. These edges at both the ends of the film have to be trimmed off at the time of slitting the mother roll into various sizes. This is the second stage of incurrence of wastage in the process. This is about 18 to 19% of P.V.C. Film.
This finished products of the process is P.V.C. Film Rolls trimmed at both the edges and uniformly wound on a paper tube. Some customers prefer the film rolls in untrimmed form also.
These films are used in packaging industry for textile, pharmaceutical, garments and other similar items and also for print lamination applications." 3. The dispute is about the classification and dutiability of wastages mentioned at Sl. Nos. (2) and (3) mentioned above. Assessee claimed classification of these goods under Chapter Sub-Heading 3915.90 as waste, parings and scrap of plastics with exemption under Notification 20/93 (Sl. No. 90) dated 28.2.93. The Assistant Collector disagreed and held that P.V.C. compound in lump form (Sl. No. 2) was classifiable under 3904.21 if non-plasticised and 3904.22 if plasticised and was liable to duty at the rate of 60% + 25 per kg. In respect of PVC film waste (Sl. No. 3) the order held that they were liable to duty at 60% under sub-heading 3920.11 or 3920.12. The appellants took up the matter in appeal before the Commissioner and that Commissioner accepted the appellants claim and approved classification under sub-heading 3915.
This order was passed relying on the decision of this Tribunal in the case of CCE, Vadodara v. Dura Foam Industries, 1988 (15) ECC 337 (T) : 1988 (33) ELT 723 (T). In the present appeal filed at the instance of the Commissioner of Central Excise, it is being submitted that the order in original was correct and legal, inasmuch, as it is in conformity with Chapter Note 6(a) and 7 of Chapter 39.
4. During the hearing of the case, the assessee has submitted that the classifications canvassed in the appeal are erroneous inasmuch as the items in question are specifically covered under sub-heading 3915 as they are waste, forming at different stages of manufacture. It is the submission of the assessee that Chapter Note 6(a) which deals with primary forms of plastics would not have any application to waste arising in the manufacture of articles of plastics. The learned Counsel for the assessee stressed that it is clear from the description of manufacturing process as noted in the order in original that PVC waste in Lumps occurs in the manufacturing process of films and it is not plastic manufactured in primary form. With regard to PVC film waste, the learned Counsel has submitted that the waste in question being in the nature of small pieces, arising during edge cutting of PVC films they cannot be classified as plastic article in the nature of sheet, film etc. According to the Counsel, both the items are waste arising in manufacture and has been correctly held in the impugned order to be classified as waste, scrap etc. The learned Counsel of the appellants has also submitted that the decision of the Commissioner is in conformity with the decisions of the Tribunal in other cases like.Collector of Central Excise, Jaipur v. Cheminova Industries P. Ltd., 5. Ld. SDR contended that PVC lumps arc specifically mentioned under Note 6 (2) (ii) as falling under heading Nos. 39.01 to 39.14 and that Note 7 made it clear that heading No. 39.15 does not apply to waste, parings etc. of a single thermoplastic material, transformed into primary forms (heading Nos. 39.01 to 39.14).
6. We have perused the records and considered the submissions made by both sides. We are not able to find any error in the order of the Commissioner (Appeals). The waste in the present case is arising during the manufacture of films. The waste lumps arise before the conversion of the mixture of raw-materials into films. It is not a manufactured product to be classified as a plastic in primary form. In fact, no manufacture of plastic in primary form is undertaken by the appellants.
He receives plastic in primary form and produces articles. This is clear from the composition of this waste and method of manufacture narrated in the adjudication order of the Assistant Collector, In respect of the PVC film waste also the material in question cannot be called film or such an article. They are very narrow strips of waste arising during the edge cutting of film roils. The Commissioner (Appeals) has noted that these cuttings of films arise on account of the trimming of uneven edges of the PVC Film. They do not become film merely because they are of the thickness of films. It is equally necessary that they conform to other specifications also to become films as known and accepted as films. The Commissioner has noted that none of these criteria is satisfied. We also observe that the impugned order was passed by Commissioner following this Tribunal's order in the case of Dura Foam Industries.
7. For the reasons stated above, we find no merit in the appeal and the same is rejected.