PAHARPUR PLASTICS Vs. COLLECTOR OF C. EX.

JUDGEMENT

(1.) THE present appeal has been filed by M/s. Paharpur Plastics against the order dated 25 -2 -1993 passed by the Collector (Appeals), Ghaziabad.

(2.) SHRI Rajesh Chhibber, learned Advocate, submitted that the appellants manufacture HDPE/PP/LLDPE strips/tapes, woven sacks, woven fabrics unlaminated/laminated. Classification list No. 1/91 -92 dated 25 -7 -1991 was approved by the Asstt. Collector with modification. On appeal filed by them, Collector (Appeals), following his earlier Order -in -Appeal No. 58/92, dated 31 -1 -1992, ordered classification of strips/tapes under sub -heading No. 3920.32 and of woven sacks of HDPE/PP/CLDPE under sub -heading No. 3923.90 of the Schedule to the Central Excise Tariff Act. He, however, confirmed the classification of all other products as ordered by the Assistant Collector. The learned counsel further, submitted that tubular fabrics laminated or coated with LDPE made from strips/tapes falling under subheading 3920.32 is used for the manufacture of bags/sacks falling under 3923.90; that, therefore, the classification of other products would flow from the correct and legal classification of the fabrics; that neither the Assistant Collector nor the Collector (Appeals) had given any reasoned findings as to the basis of the classification approved and confirmed by them; that it is clear from Note l(d) of Section XI of the Tariff that the fabrics impregnated, coated, covered or laminated with plastics, and articles thereof of Chapter 39 are not covered by Section XI dealing with Textiles and Textile articles; that the Government, under Notification No. 53/88 -C.E., dated 1 -3 -1988, had extended partial exemption to fabric (plain or laminated) falling under Chapter 39 and were for manufacture of sacks or bags. He further mentioned that the Government, keeping in view the decisionin Raj Packwell Ltd. v. U.O.I., 1990 (50) E.L.T. 201 (MP), issued an order under Section 37B of the Central Excise Act classifying the strips/tapes for the manufacture of fabrics for sacks or bags under Chapter 39 of the Tariff and, therefore, the classification of the impugned fabrics under Heading 54.08 or 59.03 is inconsistent with the section note and Governments classification. He finally submitted that even after the impugned order, the department is accepting the classification as claimed by the appellants. In support he referred to the classification list No. 1/93 effective from 1 -3 -1993 and classification list No. 1/94 effective from 1 -3 -1994 duly approved by the Superintendent Central Excise. We also heard Shri K. Srivastava, learned SDR.

(3.) WE observe that the Collector (Appeals) in the impugned order has classified the strips/tape of HDPE/PP/LLDPE under sub -heading 3920.32 and HDPE/PP/LLDPE sacks under sub -heading 3923.90 following the decision of Madhya Pradesh High Court in the case of Raj Pack Well Ltd., supra. It is not in dispute that the impugned products are made of HDPE/PP/LLDPE. Heading 54.08 covers fabrics of man -made filament yarn and Heading 59.03 applies to textile fabrics, impregnated, coated, covered or laminated with plastics. It has been held in Raj Pack Well case that for bringing the strips of the width of 5 mm or less under Chapter 54, they should also be of synthetic textile material; that nowhere in the definition of 'fabric' and 'textiles' in Textile Committees Act, 1963, plastic has been mentioned as a commodity to be included in the definition of 'fibre' or 'textiles'; that the raw material used for the production of the HDPE strips is covered under Chapter 39 and in absence of anything on the record to show that the HDPE strips are synthetic textile material, the only fact that their width is less than 5 mm would not automatically put that item under entry 54.06. The Government also under Section 37B of the Central Excise Act has ordered classification of HDPE strips and tapes of a width not exceeding 5 mm under sub -heading 3920.32 and sacks made therefrom under sub -heading 3923.90 of the Tariff. A logical conclusion is that the fabrics made out of HDPE etc. would not merit classification under Chapter 54 or 59 as the raw material is not textile material. We also observe that in subsequent classification lists, the Department itself has approved the classification of the impugned product under Chapter 39 of the CETA. In view of these facts and circumstances we set aside the impugned order and allow the appeal.