Case: Collector of Central Excise, Hyderabad Vs. Fenoplast Private Limited (1)

more by weight of wool; (b) if it contains 40 per cent, or more by weight of silk; or (c) if it contains 60 per cent, or more by weight of rayon or artificial silk." It may also be mentioned that the proviso and Explanation 1 came in along with the inclusion of the new goods, in particular, coated or laminated fabrics within the ambit of "cotton fabrics", by virtue of the Finance Act, 1969, which amended the Tariff Item.12. Shri Sorabjee lastly contended that the coating material employed by the respondent in his product is not one of the impregnating, coating and laminating materials referred to in Tariff Item 19. In other words, his submission is that the coating material does not represent either "preparations of cellulose derivatives" or "other artificial plastic materials". He submitted that this submission wasq raised by the respondent both before the Collector (Appeals) as well as before the CEGAT but was not pronounced upon specifically in view of the fact that they held in favour of the respondent o n other grounds. 13. We have seen the grounds of appeal preferred by the respondent before the Collector (Appeals). It does not contain any ground to the above effect. The order of the Collector (Appeal) refers to the argument of the respondents counsel that "the Assistant Collector has wrongly referred the plasticizers and fillers as materials falling under the then Tariff Item 15-A, i.e., plasticizers without any application of mind" and the further argument that " in fact plasticizers are chemicals and fillers and other goods which are not covered nor are assessed under Tariff Item 15-A not being plastic materials". On the above basis, it was argued that the predominant material in the refine cloth is not plasticizer inasmuch as the plastic content is only 24.5%. For appreciating the said argument, one has to turn to Tariff Item 15-A, which speaks of "artificial or synthetic resins and plastic materials and cellulose esters and ethers, an d articles thereof. It may be noticed that the goods referred to under Tariff Item 15-A and the coating material referred to in Tariff Item 19 are not identical. Tariff Item 19 speaks of impregnation, coating and lamination by "preparation s of cellulose derivatives or of other artificial plastic materials". So far as the Tribunal is concerned, only one Member (Shri P.C. Jain), in his dissenting opinion, deals with this aspect in para 16 of his judgment. He rejects the said argument holding that "PVC formulation being used by the respondent company is certainly governed by the expression other artificial plasticizers ". For the said proposition, the learned Member relies upon the decision in Chemicals and Fibers India Ltd. v. Union of India4, a decision of the Bombay High Court wherein it was held that "whereas synthetic resin is a polymer itself, plastic is polymer plus such additives as fillers, colorant plasticizers etc.". Pausing here for a moment, we may say that even according to the respondent the coating material is of three categories, viz., PVC resin 24.5%, plasticizers 13.0% and other fillers, calcium carbonate, secondary plasticizers, pigments, solvents, thinners a nd foaming agents 54.5%. Now, PVC resin is also a plastic as would be evident from the meaning given to it in Encyclopedia Americana, Vol. 22, p. 375 (1988 Edn.). The following statement occurs therein: " POLYVINYL CHLORIDE (PVC) is a tough, strong thermoplastic polymer with an excellent combination of physical and electrical properties. One of the leading plastics, PVC is used in a wide variety of product s, including coated fabrics for upholstery and raincoats, garden hoses, pipes, phonograph, records, floor-tiles, food-wrap films and insulation for wire and cable. PVC products basically are made from a powdery PVC resin, which in turn is made from a gas called vinyl chloride (VC). A large number of molecules of vinyl chloride (CH2-CHCI) are linked like beads on a chain to form the PVC polymer (- CH2CHCI-)." * To the same effect is the statement in McGraw-Hill Encyclopaedia of Science and Technology, Vol. 14, p. 170 (1987 Edn.): "Polyvinyl chloride (PVC) is a tough, strong thermoplastic material which has an excellent combination of physical and electrical properties. The products are usually characterised as plasticised or rigid types. Polyvinyl chloride (and copolymers) is the second most commonly used in polyvinyl resin and one of the most versatile plastics." * 14. The second category is plasticizers (13%), which is undoubtedly one of the basic materials of the plastics. (See Encyclopaedia Americana, Vol. 22 at p. 217). Even in the third category, there are plasticizers but we do not know to what extent. It thus appears ex facie that the coating material employed by the respondent is predominantly, if not wholly, "other artificial plastic materials".15. The majority opinion, of course, does not refer to this aspect at all.16. No reasons are shown and no material is placed before us to show that the said opinion of the Member of the Tribunal (Shri P.C. Jain) is not correct. The only submission has been that the matter be remitted to the Tribunal for a decision on this question. We are not inclined to do so, for if this were the case, the respondent ought to have put forward this argument at the forefront and not concern itself with the interpretation of the Tariff Item. It could have simply said, "my coating material is not one contemplated by the Tariff Item", and if it were so, no further question would have arisen. Instead, it concentrated upon the applicability of the clauses relating to predominance and percentages relying upon the decision of this Court in Multiple Fabrics1. Before the Col lector (Appeals) it relied upon Tariff Item 15-A and submitted that since its coating material is not covered by Tariff Item 15- A, Tariff Item 19 is also not attracted. For all the above reasons, we are not inclined to accede to the request for remand of the matters to the Tribunal for deciding the said question.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]9. It is argued by Shri Sorabjee that after coating, the cotton fabric no longer retains its identity as cotton fabric and that a new distinct commodity emerges. It is submitted that if the degree and extent of lamination or coating of fabric is such that it ceases to retain its identity as cotton fabric and a new distinct commodity emerges as a result of such coating or lamination, the resultant product cannot be regarded as cotton fabric within the meaning of Tariff Item.This argument does not take into account the fact that Parliament has chosen to include the coated/laminated fabrics within the ambit and purview of "cotton fabrics" and Parliaments power to do so is not questioned and probably cannot be questioned. The fact remains that to start with it is a cotton cloth upon which certain coating material isExplanation 1, was noticed, its purport was not given effect to while holding that "in view of the higher percentage of PVC compound in commodity, it becomes difficult to treat the ultimate goods asfabrics for holding that it is covered by Item 22". Indeed, the above reason is the second of the two reasons given for holding in favour of theThe first reason is that since the manufacture o f fabric and application of PVC compound is simultaneous, there is no preexisting base fabric for the purposes of and within the meaning of Tariff Item 22. Be that as it may, since the proviso was not brought to the notice of this Court and f or that reason the significance of Explanation 1 escaped the Courts notice, it is difficult to hold that the said decision lays down the correct interpretation of Tariff Item 22 or that it helps the respondent before us in interpreting Tariff Item 19.The second category is plasticizers (13%), which is undoubtedly one of the basic materials of the plastics. (See Encyclopaedia Americana, Vol. 22 at p. 217). Even in the third category, there are plasticizers but we do not know to what extent. It thus appears ex facie that the coating material employed by the respondent is predominantly, if not wholly, "other artificial plastic materials".15. The majority opinion, of course, does not refer to this aspect at all.16. No reasons are shown and no material is placed before us to show that the said opinion of the Member of the Tribunal (Shri P.C. Jain) is not correct. The only submission has been that the matter be remitted to the Tribunal for a decision on this question. We are not inclined to do so, for if this were the case, the respondent ought to have put forward this argument at the forefront and not concern itself with the interpretation of the Tariff Item. It could have simply said, "my coating material is not one contemplated by the Tariff Item", and if it were so, no further question would have arisen. Instead, it concentrated upon the applicability of the clauses relating to predominance and percentages relying upon the decision of this Court in Multiple Fabrics1. Before the Col lector (Appeals) it relied upon Tariff Itemand submitted that since its coating material is not covered by Tariff Item 15A, Tariff Item 19 is also not attracted. For all the above reasons, we are not inclined to accede to the request for remand of the matters to the Tribunal for deciding the said question.