Galaxy Plywood Inds. P Ltd vs Cce, Panchkula

(Arising out of OIA No.159/NS/PCK/2006 dt.15.6.2006 passed by the CCE(Appeals), Delhi-III, Gurgaon)

Date of Hearing/Decision 06.10.2015

For approval & Signature:

Honble Smt.Sulekha Beevi C.S., Member (Judicial)

Honble Mr.B.Ravichandran, Member (Technical)

1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3. Whether their Lordships wish to see the fair copy of the order? seen 4. Whether order is to be circulated to the Department Authorities? yes

Galaxy Plywood Inds. P Ltd. Appellant

Vs.

CCE, Panchkula Respondent

Appearance:

Present for the Appellant: Shri Bipin Garg, Advocate

Present for the Respondent: Shri S.Mauthuk, JCDR

Coram: Honble Smt.Sulekha Beevi C.S., Member (Judicial)

Honble Mr.B.Ravichandran, Member (Technical)

Final Order No.53146/2015

Per: Sulekha Beevi C.S.

The issue that poses for consideration in the above appeal is the classification of plasticized plywood during the period July 2004 to February,2005.

2. Brief facts of the case are as under:

2.1 The appellants are engaged in the manufacture of plywood and block boards falling under chapter 44 of CETA, 1985. They were availing small scale benefit under notification No.8/2003-CE dated 1.3.2001. On 14.6.2004 appellants filed declaration to the Superintendent with regard to their intention to start manufacture of plasticized plywood classifying it under 4410.90 and also filed process of manufacture of the product. As per Notification No.10/2003-CE dated 1.3.2003 the rate of duty of plasticized plywood falling under 4410.90 was nil duty. Department entertained the view that the product (plasticized paper laminated plywood) are not classifiable under 4410.90 but under heading 4408.90, attracting duty of 16%. A show cause notice dated 18.7.2005 raising the above allegation was issued which was contested by the appellant. After adjudication the Order-in-Original was passed which confirmed the duty demand and interest. In appeal, the same was upheld by the Commissioner (Appeals). Aggrieved, the appellant is before the Tribunal.

3. On behalf of the appellant the learned counsel Shri Bipin Garg first adverted to the process of manufacture of the impugned product viz. plasticized plywood. The said product is manufactured by putting plasticized paper on top and bottom faces of the veneer and pressed under required temperature. He submitted that the impugned product would fall under heading 4410.90 which mentions Articles of wood not elsewhere specified  other. That Revenue has wrongly classified it under 4408.90. To fortify his arguments, he placed reliance on the decision of the Tribunal in Decorative Laminates (India) Pvt.Ltd. Vs. Collector of Central Excise-1990 (46) ELT 506 (Tri.) and submitted that the civil appeal filed by Revenue against the said Tribunals order was dismissed by the Honble Supreme Court on 4.5.1995, (Collector vs. Decorative Laminates (India) Pvt.Ltd.-1997 (89) ELT A-40 (SC).

4. In reply, the learned DR Shri S.Nunthuk submitted that the authorities below have rightly classified the product under tariff item 4408.90. He pointed out that chapter heading 44.08 speaks about plywood, veneered panels and similar laminated wood. Note 5 to chapter 44 explains classification of items which are included in similar laminated wood. That the impugned product would fall within the category of similar laminated wood. He placed reliance on the judgement of the Honble Supreme Court in Commissioner of Central Excise, Noida vs. Kitply Industries Ltd.-2011 (272) ELT 3 (SC).

5. Before proceeding to analyze the issue of classification presented before us, it is worthwhile to mention that the period of dispute in this case is from July, 2004 to February, 2005. The impugned product i.e. plasticized plywood is classifiable under chapter heading 4412 of the CETA, 1985 w.e.f.01.03.2005. The heading 4412 after 01.03.2005 is same as 44.08 and reads as plywood, veneered panels and similar laminated wood. For better appreciation the relevant headings are extracted under:-

44.08 Plywood, veneered panels and similar laminated wood

4408.10 Marine plywood and aircraft plywood 16%

4408.20 Plywood for tea-chests when cut to size in 16%

Panels or shook and packed in sets

4408.30 Decorative plywood 16%

4408.40 Cuttings and trimming of plywood of width 16%

Not exceeding 5 centimeters

4408.90 Other 16%

44.09 --------------------------------

44.10 Articles of wood not elsewhere specified

Doors, of wood:

4410.11 Flush doors 16%

4410.19 Other 16%

4410.90 Other

6. The flow chart explains the core manufacturing of the impugned product as putting of plasticized paper on top and bottom faces of glued core veneer. At the cost of repetition it is stated that chapter 44.08 speaks about plywood veneer panels and similar laminated wood. Whereas heading 44.10 speaks about articles of wood not elsewhere specified and includes within it items like door, flush door other. We have gone through the judgement laid by a three Member Bench of this Tribunal in Decorative (India) (P) Ltd. case and have also taken note of the fact that the appeal filed by Revenue against the same before the Honble Supreme Court was dismissed. The Tribunal in the said case set aside the classification of paper faced laminated plywood as decorative plywood and accepted the alternative plea put forward by the assessee that paper faced laminated plywood would fall under heading 4410.90 as articles of wood not elsewhere specified  others. The Tribunal has merely accepted the plea, and while doing so has not addressed the issue whether paper faced laminated plywood would fall under the category article of wood as given under chapter heading 44.10. As stated earlier the chapter heading 4408 speaks about plywood, veneered panels and similar laminated wood. Chapter Note 5 of 44.08 is reproduced as under:

For the purposes of heading No. 44.08, the expression similar laminated wood includes blockboard, laminboard and battenboard, in which the core is thick and composed of blocks, laths or battens of wood glued or otherwise joined together and surfaced with the outer plies and also panels in which the wooden core is replaced by other materials such as a layer or layers of particle board, fiberboard, wood waste glued or otherwise joined together, asbestos or cork.

7. The Honble Supreme Court in the case of Kitply Industries Ltd. (supra) while considering the issue whether laminated panels of particle and medium density fiber board should be classified under sub-heading 4406.90 and 4407.90 or under sub-heading 4408.90 held that heading 4408 covers plywood, veneer panels and similar laminated wood. The word used is similar and not same and therefore any resemblance to plywood or veneer panels is enough. The Apex Court referred to the discussion to the word similar made in the case of CCE, Shilong vs. M/s.Wood Craft Products Ltd.-1995 (77) ELT 23 (SC) and observed as follows:

18.?From the above, it is clear that the product is similar to plywood and veneered panels and hence Tariff Heading 44.08 is squarely applicable. Further, in the instant case, the core layer is made up of the particle board or MDF board (referred to as mother boards in the process mentioned above) and joined together with the help of resins and then laminated with plasticised paper (paper impregnated with melamine formaldehyde resin). Hence it is also clearly seen that the laminated panels manufactured by the respondent are covered under Chapter Note 5 to Chapter 44 of the schedule to the Act. The product need not be same as plywood or veneered panels but mere similarity with them is enough for Chapter Note 5 to apply.

9. The chapter heading 44.08 specifically speaks about plywood, veneered panels and similar laminated wood. Whereas, the chapter heading 44.10 speaks about articles of wood not elsewhere specified. Undeniably, the impugned product does not fall into article of wood. So the product which is plasticized plywood is classifiable under chapter 44.08 only. Moreover, this Tribunal in the case of Permali Wallace Pvt.Ltd. reported in 2011 (274) ELT 0588 (Tri.-Del.) examined the scope of heading 44.08 alongwith chapter Note 5 and held veneered sheets will be classified therein. In the light of the observations made by the Apex Court in the case of CCE, Noida vs. Kitply Industries Ltd. and apply the same, we are of the considered view, that the impugned product is classifiable under chapter heading 44.08. The issue is answered in favour of the Revenue.

10. The appeal is dismissed.

(pronounced in open court)

(B.Ravichandran) (Sulekha Beevi C.S) Member (Technical) Member (Judicial)

mk

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