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Paresh Products Vs. Collector of Customs - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1983)LC1171DTri(Delhi)
AppellantParesh Products
RespondentCollector of Customs
Excerpt:
.....purposes the scrap imported was not goods at all.2. the department's representative stated that plastic scraps were goods as they were industrial raw materials and were regularly bought and sold in the market, that by virtue of note 3(e) to chapter 39 of the cta, plastic waste and scrap were specifically included under heading 39.01/06 as a material and they could not, therefore, be classified under heading 39.07 as articles of plastics, that notification no. 228/76-cus. which exempted only articles made of plastics was not applicable to acrylic scrap imported by the appellants and that since item 15a(1) of the get covered artificial resins and plastics materials "in any form", the goods were liable to c.v. duty under that item. he relied on this tribunal's order no. 222-229/1983-c,.....
Judgment:
1. In this case, the appellants imported acrylic crushed scrap. The goods were assessed to basic customs duty under heading 39.01/06 of the Customs Tariff Act, 1975. In addition, countervailing duty as applicable under Item 15A of the Central Excise Tariff was charged on them. The appellants filed a refund claim on two counts - (1) the goods were articles made of plastics and should be assessed under Heading 39.07 CTA, and (2) No countervailing duty should be charged as articles of plastics were exempt from such duty under exemption Notification No. 228/76-Cus.

The Assistant Collector rejected their claims on the ground that the goods were waste and scrap which fell under Heading 39.01/06 CTA and that Item 15 A GET covered plastic- materials in all forms. Before the Appellate Collector, the appellants pressed for their claim only in respect of exemption from countervailing duty. The Appellate Collector rejected it on the ground that the goods-crushed sheet scrap-were still plastic sheets only liable to C.V. duty under Item 15A(2) GET. In their revision application filed before the Central Government (since transferred to this Tribunal and taken up as the subject appeal), the appellants again pressed for only in respect of exemption from C.V.duty. But during the hearing before us on 27-6-1983, they reverted to their original claim on both the counts. They stated that the goods imported were articles of plastics falling under Heading 39.07 for the purpose of basic customs duty. For central excise purposes, the goods were not plastics at all and hence not liable to countervailing duty vide this Tribunal's earlier Order at 1983 ELT 845. They also relied on the Supreme Court's judgments in D.C.M. and South Bihar Sugar Mills' cases to say that for central excise purposes the scrap imported was not goods at all.

2. The Department's representative stated that plastic scraps were goods as they were industrial raw materials and were regularly bought and sold in the market, that by virtue of Note 3(e) to Chapter 39 of the CTA, plastic waste and scrap were specifically included under Heading 39.01/06 as a material and they could not, therefore, be classified under Heading 39.07 as articles of plastics, that Notification No. 228/76-Cus. which exempted only articles made of plastics was not applicable to acrylic scrap imported by the appellants and that since Item 15A(1) of the GET covered artificial resins and plastics materials "in any form", the goods were liable to C.V. duty under that item. He relied on this Tribunal's Order No. 222-229/1983-C, dated 20-5-1983 in favour of his case.

3. We have carefully considered the matter. So far as the basic customs duty is concerned, we find that Note 3(e) to Chapter 39 of the CTA specifically includes waste and scrap within the scope of Heading No.39.01/06. This note is a part of the statutory Customs Tariff.

Therefore, in accordance with the provisions of this note', acrylic scrap imported by the appellants has to be assessed under Heading No.39.01/06 CTA only and it cannot be classified under Heading No. 39.07 as an article made of plastics, etc. As regards countervailing duty, we find that the scope of Central Excise Tariff Item 15 A was, at the material time, narrower than that of Chapter 39 of the CTA. Item 15A CET included only "artificial or synthetic resins and plastic materials and cellulose esters and ethers, and articles thereof". It has been nobody's case before us that acrylic scrap fell in the category of artificial resins or cellulose esters or ethers. The pleadings before us related to whether the goods were plastic materials or not. Plastic materials are those which have plasticity, i.e., which can be moulded, extruded, rolled or cast etc. to form articles of plastics. The appellants argued before us, with reference 'to the earlier Tribunal decision cited above, that acrylic scrap did not possess plasticity and that it 'had first to be depolymerised to recover monomer out of it before anything could be formed out of it. This assertion of the appellants has not been controverted by the Department. The Department's representative instead relied on the earlier Tribunal Order No. 222-229/1983-C. On perusal of this Order, we find that it related to cellulose acetate scrap and not to acrylic scrap. The goods being different in that case and the one before us now, no reliance could be placed on the earlier Order unless it was shown that properties of cellulose acetate scrap and acylic scrap were identical which has not been done. Since the appellants' contention that acrylic scrap did not possess plasticity remains uncontroverted, we agree with the earlier Bench Order at 1983 ELT 845 that acrylic scrap could not be considered a plastic material.

4. In the result, we reject the appellants' claim in regard to basic customs duty but allow it with consequential relief in respect of countervailing duty.


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