S.L. Peeran, Member (J)

1. This is Revenue's Appeal by which they have sought for setting aside the impugned Order-in-Appeal No. 344-DLH/86 dated 7-2-1985 passed by the Collector of Central Excise (A) New Delhi.

2. The question that arises for consideration in this Appeal is as to whether 'Green Pack' prepared by the respondents which constitutes 'Cable jointing kits (Mould type and cast type)' would merit classification under TI 15A(1) or TI 68 and as to whether the product is entitled for exemption under Notification No. 182/82, dated 11-5-1982. The main basis on which the Revenue seeks to classify this product Green pack under TI 15A(1) of the Schedule to the Central Excises Salt Act, 1944 the report of the Chemical Examiner who, after analysing the sample, has reported that the sample contained 16.5% synthetic resin mixed with organic fillers. It is contended by the Revenue that the product remains a resin meriting classification under TI 15A(1) of the Excise Tariff Schedule. They have relied upon the literature of the respondents in which the product is described as resin made of epoxy based synthetic resin. The Revenue have contended that the paste in green pack cannot be treated as an article of plastic. To be an article, the goods should have a permanent shape and should be capable of retaining the shape for the purpose of its subsequent use for which it is intended. An epoxy based reinforced plastic sheet, for example, is an article of epoxy resin which has a permanent and durable shape of its own. It is further submitted by the Revenue that sealant/caulking compound of the nature as in this case are nothing but adhesive formulations required for jointing purposes and an article of any shape does not emerge out from such compounds. So, the respondents are not entitled to the benefits of exemption under Notification No. 182/82, dated 11-5-1982. The Collector of CE (A) in the impugned order has upheld the respondents contention that duty had been paid on the epoxy resin. The respondents had only mixed this epoxy resin with fillers in which process there was no chemical reaction and it was only a simple mixture and hence, there was no manufacture resulting in a new product. The Collector, therefore, held that since epoxy resin was classified under TI 15 A (1) and by mere additions of fillers, it will not result in a new product and no further duty can be charged again.

3. Shri L. N. Murthy, learned JDR reiterated the grounds of appeal and submitted that homogenisation of the resin by mixing with fillers is a process of manufacture resulting in a new product and therefore, the green pack manufactured by the respondents is liable for duty under TI 15A(1) and will not be entitled for the benefit of the Notification No. 182/82. He has referred to the citation of the Supreme Court in the case of Shaw Wallace Co. Ltd. v. State of Tamilnadu [1976 (37) STC 523] and also in the case of Devidass Gopalkrishan v. State of Punjab [1967 (20) STC 43].

4. Shri J. S. Agarwal, Advocate arguing for the respondents, submitted that duty paid epoxy resin was merely mixed with fillers which did not result in a process of manufacture and there was no new product coming into existence. He submitted that the epoxy resin as well as the epoxy resin mixed with fillers perform the same functions and there is no chemical change by mixing of the fillers. He relied upon several citations and stated that no new product has come into existence and the process of mixing with fillers will not result in coming into existence of any new product. He also relied upon extracts from Hand book of Epoxy Resins by Henry Leed Kris Neville published by McGraw-Hill Book Company. He further submitted that Board had also issued its circular MF (DR) F.No. 93/2/82 C-3 dated 6-10-1982 clarifying that the modification of epoxy resin by fillers will not result in manufacture and bringing into existence of any new product. He also relied upon Cochin Trade Notice No. TI/15