M/S PLASTRULON PROCESSORS LTD. Vs. CCE, PUNE

JUDGEMENT

(1.) THE issue involved in this appeal, filed by M/s. Plastrulon Processors Ltd. is whether 'Seamless C.S. Pipe lined with Plastic' and 'Pipe fittings' lined with Plastic' are classifiable under Heading 39.17 of the Schedule to the Central Excise Tariff Act as claimed by the Appellants or are classifiable under Heading No. 73.04 or 73.05 as confirmed by the Commissioner (Appeals) in the impugned Order.

(2.) Shri M.H. Patil, learned Advocate, submitted that the Appellants manufacture (a) seamless C.S. Pipe PTFE - Teflon/PVDF/PP and other plastic lined and (b) C.S. Cast Ductile Iron/Fabricated steel pipe fittings PTFE/Teflon/PVDF/PP and other plastic lined such as Elbow, Tees, Reducers, Flanges, Joints, etc.; that seamless carbon steel/S.S. Pipes are obtained from open market and are cut to required size/length; two carbon steel/S.S. flanges are welded at both ends; Plastic extruded pipe, obtained from abroad, are then inserted inside the flanged seamless carbon steel/S.S. Pipe mechanically; both ends of plastic pipe which extend beyond seamless C.S./S.S. Pipe are then flared over the flanges under heat and pressure and thus their final product 'seamless C.S./S.S. Pipe plastic lined is manufactured; that the impugned goods are exclusively used by Chemical process industry for chemical corrosion protection; that though the weight of the steel is more, plastic constitutes 80% to 87% of the total cost and the value of the plastic is the predominant factor. The learned Advocate, further, submitted that the process undertaken by them does not amount to manufacture as pipe remains pipe and no new distinct product emerges; that the Revenue by its own contention admits that the process of plastic lining does not bring into existence any new product as it wants to classify the pipes again under Heading 73.04 and 73.05 of the Tariff. He relied upon the following decisions: -

(3.) THE learned Advocate also mentioned that the impugned products are composite articles made out of combination of plastic and non -plastic material i.e. steel; that steel pipes by themselves are not sufficient to perform the function for which these pipes are used; that the essential character of the products is derived from plastic because it possesses anti -corrosion properties and avoid contamination of chemical during the process; that the PTFE/other plastic material are supported from outside by carbon steel shell for strength; that without the use of PTFE/other plastic material, the C.S. Pipes have no utility in chemical process industry; that according to Rule 3(b) of the Interpretative Rules, composite goods are to be classified as of they consisted of the material which gives them their 'essential character'; that the Board under Circular No. -Cx dated 23.2.1990 has clarified that essential character may be determined by nature of the material or component, its bulk, quantity, weight or value or by the role of the constituent material in relation to the use of the goods; that in the present matter the role played by the plastic material is of greater importance. He relied upon the following decisions: -