Full Judgment
2. Admitted facts of the case are that the appellants M/s. Oswal Products are manufacturer of acrylic plastic bangles - tube. They are manufacturing these goods from Regenerated M.M. Monomer purchased from the local manufacturers. A show cause notice dated 24-10-1980 proposing the classification of the subject goods under Tariff Item I5A and demanding duty from 24-10-1976 to 5-5-1980 was issued to them to show cause as to why the duty mentioned therein be demanded and penalty be imposed. In reply the appellants contended the classification and in the alternative they also claimed benefit of exemption Notification No.68/71, dated 29-5-1971. However, the Collector confirmed the demand.
Hence, the present appeal.
3. Appearing on behalf of the appellants Shri R.K. Jain, learned Consultant submitted that the issue stands squarely covered by a Division Bench judgment of the Gujarat High Court rendered in the case of M/s. Jalal Plastic Industries and Ors. v. Union of India, reported in 1981 (8) E.L.T. 653 wherein in paragraphs 9 and 10 it is stated that the expression "articles made of plastic" means articles for the manufacture of which plastic material has been used as a raw material, and therefore, it does not suggest a non-plastic material which has undergone polymerisation process in the course of manufacturing process, and since indisputably monomer is not the plastic material and since the assessees have been manufacturing plastic bangles out of monomer by subjecting it to a polymerisation process they were not liable to pay excise duty on the bangles manufactured by them under Tariff Item I5A. He also drew our attention to the case of M/s. Raish Plastics and Ors. v. Union of India, reported in 1983 (12) E.L.T. 92 (Raj.) wherein the Rajasthan High Court following the said case of Jalal Plastic Industries took the same view. Alternatively, he argued that the appellants would also be entitled for the benefit of exemption Notification No. 68/71 even if it is found that the appellants were manufacturing the subject goods from regenerated M.M. monomer. It was also argued that a part of the demand was time-barred being issued beyond 6 months as the appellants were not guilty of any wilful mis-statement or wilful suppression with intent to evade duty.
4. In reply Shri Somesh Arora, learned JDR stated that in view of the said two decisions of the High Courts he has nothing to comment except to say that whatever was argued on behalf of the Revenue in those cases may be treated as his arguments. However, he also brought to our notice a decision delivered by the Tribunal in the case of Collector of Customs v. Natwarlal BhikhabFhai, reported in 1989 (44) E.L.T. 126 (Tribunal) wherein after opining that "Plastic bangles and tubes of this kind manufactured by this factory cannot be manufactured unless the monomer undergoes polymerisation. Indeed there is no denial of this by the respondent party nor can this fact be contradicted. It is a technological fact and there is no need for any detailed discussion.
M/s. Natwar Lal will understand this as they know the process well. The fact that it is called acrylic plastic makes it evident that it has undergone polymerisation. We are not aware of acrylic sheet or articles that are not thermoplastic polymer or copolymer derived from acrylic acid methacrylic acid ester of this acid or acrylonitrile etc. Methyl methacrylate is a monomer for polymethacrylate as is used in the formation of acrylic plastic. Acrylic plastic bangles and tubes have to be articles made of plastic and must fall under Item 15A Central Excise Tariff" decided the case in accordance with the judgment rendered by the Gujarat High Court in the case of Jalal Plastic Industries (supra).
As regards other contentions raised by the learned consultant he submitted that it would be of academic interest if it is found that the subject goods are articles of plastic.
5. Considered. After going through the said judgment of the Gujarat High Court rendered in the case of Jalal Plastic Industries and followed by the Rajasthan High Court and this Tribunal as aforesaid we are of the view that the ratio of the said judgment squarely applies to the facts of the present case. Thus we hold that the appellants were not liable to pay excise duty on the subject goods. In this view of the matter we are not called upon to express our opinion regarding the other contentions raised by the learned consultant.
6. In the result the appeal is allowed with consequential relief to the appellants, if any.