G. Sankaran, Senior Vice-President

1. This appeal is directed against Order-in-Appeal No. 52/85(H) passed by the Collector of Central Excise (Appeals), Madras.

2. The facts of the case, briefly stated, are that the respondent is engaged in the manufacture of a product called "dough moulding compound" out of duty paid polyester resins and glass fibres. A sample was tested by the Chemical Examiner, Madras, with the following results :-

"The sample is in the form of pinkish colour fibrous hard lumps and powder. It is composed of synthetic resin (phenolic), inorganic fillers and cellulose fibres.

It is seen from the books on the subject that phenolic moulding compounds are used in making various types of decorative, mechanical, electrical and other parts and articles. Hence the sample under reference may not be considered as an article of plastic."

After issue of show cause notice and hearing the respondent, the Assistant Collector passed an order on 29-9-1984 classifying the goods under Item No. 68 of the First Schedule to the Central Excises and Salt Act (the Schedule is referred to hereinafter as the "CET" for short) and denying the benefit of Central Excise Notification No. 182/82. In appeal, the Collector (Appeals) held that the dough moulding compound obtained by physical mixture of duty paid resin and glass fibre (fillers) was nothing but physically modified resin; there was no "manufacture" warranting a fresh levy. He also held that moulding compound obtained by such physical modification of non-duty paid resin would be classifiable under Item No. 15A(1), CET and chargeable to duty. It is this order which is now under appeal.

3. We have heard Shri A.S. Sunder Rajan, DR, for the appellant and Shri B. Shankar, Vice-President (Commercial), for the respondent.

4. A preliminary objection was raised by the respondent that the appeal was barred by limitation, there having been a delay of a few days in filing the same beyond the stipulated period of 3 months from the date of communication of the order. After hearing both sides and perusing the affidavit filed by the appellant and the inward register of the Collector's office, we were satisfied that the appeal had been filed in time and that there was no delay.

5. It appears that on 12-5-1978 the respondent had filed a classification list for dough moulding compound claiming classification under Item No. 15A(2), CET. In the original and appeal proceedings, the classification of the product was made under Item No. 68, CET, which, as seen from the Tribunal's Order No. 373-374/86-C dated 30-6- 1986 in Appeal Nos. ED(SB)(T) 1318-1179/82 (the parties being Collector of Central Excise, Hyderabad and Bakelite Hylam) was not challenged by the manufacturer. In the proceedings before this Tribunal Bakelite Hylam sought to raise a plea that the addition of inert fillers (glass fibre) to duty paid synthetic resin resulting in physical modification of the resin, did not amount to "manufacture" for the purpose of excise duty levy. The Tribunal held that since this ground had not been taken before the lower authorities - it had been given up before the lower appellate authority - Bakelite Hylam could not agitate this ground before the Tribunal. The Tribunal referred to an earlier decision that conversion of duty paid PVC resin into PVC moulding compound by addition of fillers, plasticizers, stabilizers and lubricant amounted to "manufacture" within the meaning of Section 2(f) of the Act [the reference appears to be to the case of Indian Cable Company - MANU/CE/0316/1983 : 1984 (15) ELT 434] and held that dough moulding compound was classifiable under Item No. 68, CET. Shri Sunder Rajan while referring to the Tribunal's order dated 30- 6-1986 (supra) stated that he was not relying on it in the present case. He, however, relied on the Tribunal's decision in Plastic Powders Private Ltd., Calcutta v. Collector of Central Excise -MANU/CE/0215/1983 : 1983 (14) ELT 2049 holding that phenol formeldehyde mo