Collector of Central Excise Vs. Wood Polymers - Court Judgment

Excerpt:
1. the assessees manufacture paper and cotton fabrics based laminates, insulators as also resin solution as inputs in the manufacture of such laminates and insulating boards. the assessees filed a classification list. the assistant collector classified paper based laminated decorative board, paper based/cotton based insulating boards and cotton fabrics based laminated industrial boards under subheading 3920.37 and the reactive solutions under sub-heading 3909.59. in his order-in-appeal, the collector classified the paper based laminated decorative boards under sub-heading 4823.90. he classified paper based/cotton based insulating boards under heading 8546 and the cotton fabrics based laminated industrial boards under sub-heading 3926.90. he held that the chemical solutions were unstable and had short shelf life. finding that the goods were not marketable, he held that the solutions as not goods and consequently not chargeable to duty. in the present appeal from the revenue, the classification sought for all the products is under sub-heading 3920.37. it is also claimed that the collector's finding that the reactive solutions of phenol formal dehyde/melamine formal dehyde were not marketable/were not correct. it has been claimed that even if the reactive solutions as prepared had a limited shelf-life, the same could be increased by adding preservatives, etc.2. the respondents requested for an adjournment; however, on examination of the facts it appeared that the presence of the respondents could be dispensed with, the case was accordingly taken up for hearing.4. the classification of the contested products has been settled by the supreme court in their judgment in the case of the present respondents as reported in 1998 (97) e.l.t. 193 (s.c.). in terms of this order the paper based/cotton based insulating boards would merit classification under heading 8546, the paper based laminated decorative boards as well as the cotton fabrics based laminated industrial boards would merit classification under sub-heading 3920.37. in the case of these two products, therefore, the appeal filed by the revenue succeeds.5. as regards the excisability of chemical solutions, the collector has made a categorical observation that the goods were unstable, reactive and in view of the process of polymerisation continuing during its storage, it had a very short shelf-life. following the judgment of the supreme court in the case of bhor industries ltd. [1989 (40) e.l.t. 280 (s.c.)], he held that the goods were not excisable. in the appeal memorandum, we find that no evidence has been adduced to show that the specific solutions manufactured by the respondents herein were marketable. a citation has been made from a text book to the effect that certain resins could be cooled and stored at low temperature for several weeks. an observation is also made in the appeal memorandum that the shelf-life of the solutions could be increased by adding preservatives, etc. or by addition of alcohol. it is also claimed that similar solutions are available in the market. we find that the various claims do not go to disprove the finding of the collector. no report of any laboratory has been placed before us on the samples drawn from the manufacturers premises to show that the claim made by the respondents was not correct. mere empirical ns or citations from a text book would not change the physical realities of the particular manufacturer's processing of a chemical. we find that revenue has not adduced any evidence to negate the finding of the collector. his order as to the non-excisability of the solutions is, therefore, upheld.

Judgment:
1. The assessees manufacture paper and cotton fabrics based laminates, insulators as also resin solution as inputs in the manufacture of such laminates and insulating boards. The assessees filed a classification list. The Assistant Collector classified paper based laminated decorative board, paper based/cotton based insulating boards and cotton fabrics based laminated industrial boards under subheading 3920.37 and the reactive solutions under sub-heading 3909.59. In his order-in-appeal, the Collector classified the paper based laminated decorative boards under sub-heading 4823.90. He classified paper based/cotton based insulating boards under Heading 8546 and the cotton fabrics based laminated industrial boards under sub-heading 3926.90. He held that the chemical solutions were unstable and had short shelf life. Finding that the goods were not marketable, he held that the solutions as not goods and consequently not chargeable to duty. In the present appeal from the Revenue, the classification sought for all the products is under sub-heading 3920.37. It is also claimed that the Collector's finding that the reactive solutions of Phenol Formal dehyde/Melamine Formal dehyde were not marketable/were not correct. It has been claimed that even if the reactive solutions as prepared had a limited shelf-life, the same could be increased by adding preservatives, etc.

2. The respondents requested for an adjournment; however, on examination of the facts it appeared that the presence of the respondents could be dispensed with, the case was accordingly taken up for hearing.

4. The classification of the contested products has been settled by the Supreme Court in their judgment in the case of the present respondents as reported in 1998 (97) E.L.T. 193 (S.C.). In terms of this order the paper based/cotton based insulating boards would merit classification under Heading 8546, the paper based laminated decorative boards as well as the cotton fabrics based laminated industrial boards would merit classification under sub-heading 3920.37. In the case of these two products, therefore, the appeal filed by the Revenue succeeds.

5. As regards the excisability of chemical solutions, the Collector has made a categorical observation that the goods were unstable, reactive and in view of the process of polymerisation continuing during its storage, it had a very short shelf-life. Following the judgment of the Supreme Court in the case of Bhor Industries Ltd. [1989 (40) E.L.T. 280 (S.C.)], he held that the goods were not excisable. In the appeal memorandum, we find that no evidence has been adduced to show that the specific solutions manufactured by the respondents herein were marketable. A citation has been made from a Text Book to the effect that certain resins could be cooled and stored at low temperature for several weeks. An observation is also made in the appeal memorandum that the shelf-life of the solutions could be increased by adding preservatives, etc. or by addition of alcohol. It is also claimed that similar solutions are available in the market. We find that the various claims do not go to disprove the finding of the Collector. No report of any laboratory has been placed before us on the samples drawn from the manufacturers premises to show that the claim made by the respondents was not correct. Mere empirical ns or citations from a text book would not change the physical realities of the particular manufacturer's processing of a chemical. We find that Revenue has not adduced any evidence to negate the finding of the Collector. His order as to the non-excisability of the solutions is, therefore, upheld.