The assessee was engaged in the manufacture of excisable goods, Fibre Glass Pressure Vessels falling under Chapter sub-heading No. 7014.00 attracting duty at the rate of 18 per cent ad valorem and components for industrial water treatment plants under CSH No. 8421.10 attracting duty at the rate of 13 per cent ad valorem.
The revenue’s case was that the product components for Industrial Water Treatment Plants were excluded from Chapter No. 84 and taking into consideration the manufacturing process, raw materials used and end use the products were correctly classifiable under CSH No. 7014.00 as Article of Glass Fibres coated/ covered with Plastics attracting duty at the rate of 18 per cent ad valorem.
The assessee is admittedly manufacturing glass fibre vessel wherein the ingredients of glass fibre is predominant, i.e. in case of FRP vessel content of fibre glass is of 57 per cent and in respect of the product composite vessel is 63 per cent and in respect of the composite vessel, the fibre glass present is 38 per cent but remaining 62 per cent is of all other materials used. Therefore in all the three products, the predominant part of material used is fibre glass.
According to the predominate principle, the products should be classified under chapter 70.14. The Commissioner takes support of the decision in the case of Kemrock Industries & Exports Ltd. v. CCE 2001 taxmann.com 689 (CEGAT – New Delhi) (LB) wherein it was held that the classification should be decided on the basis of essential characteristic of the product and not on the basis of predominant material used for the manufacture. In the said judgment it was not the case of essential characteristic based on the end use of the goods whereas the issue was whether the plastic is predominant or the glass fibre is predominant as per the strength of the goods.
In view of above, it is held that the goods glass fibre vessels are correctly classifiable under 70.14. Accordingly, the impugned order is set aside and the revenue’s appeal is allowed
Citation: [2018] 96 taxmann.com 379 (Mumbai – CESTAT)