S. Venkatesan, Sr. Vice-President

1. This is an appeal from Messrs Peico Electronics Electricals Ltd., (hereinafter called the appellants) against the Order-in-Revision dated 24-8-82 passed by the Collector of Central Excise and Customs, Pune. The matter arises from the Order No. V (Ex) 11-39/77/69 dated the 31st December, 1980, passed by the Assistant Collector of Central Excise, Pune II Division. It relates to a material called "spider cloth". The appellants had been served with notice to show cause why this spider cloth should not be assessed to duty under sub-item III of Item 19 of the Central Excise Tariff Schedule. The description of this sub-item reads as follows:-

"Cotton fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials."

After considering the reply given by the appellants, the Assistant Collector in his order under reference observed that the spider cloth was obtained at an intermediate stage and was not marketable nor marketed and therefore was not excisable. He accordingly ruled out the classification of the fabric under either Item 19 or Item 68 of the Central Excise Tariff Schedule, and vacated the show cause notices issued in this regard.

2. Thereafter the Collector of Central Excise initiated proceedings under Section 35A (2) of the Central Excises and Salt Act, as it then stood, against the Assistant Collector's order. He observed that Central Excise duty was levied on manufacture and since the goods were manufactured duty was legally leviable and that the question of the goods being actually marketed was not relevant. He held that this spider cloth manufactured by impregnating cotton fabric with artificial plastic material was clearly excisable under Tariff Item 19 III of the Central Excise Tariff. It is against this -order that the appellants have come up to the Tribunal.

3. The appeal originally came up for hearing on 8-9-83 before a Bench which differed slightly in composition from the present one. On that occasion Shri D.R. Kohli, for the appellants, stated that the appellants desired to adduce as evidence in their favour certain test reports of Messrs Italab Private Limited, a well-known industrial testing and analytical laboratory, on samples drawn in 1983 of the spider cloth produced by the appellants. Shri Tayal., for the Department, opposed the introduction of such reports at this stage. The Bench directed Shri Kohli to make a specific application in this regard by 15-9-83.

4. Shri Kohli also submitted to the Bench a sealed envelope certified by the Central Excise authorities as containing samples of the spider cloth drawn from the appellants on 3-11-1982. The envelope was opened and was found to contain three samples of the "spider cloth", two of them superscribed as "Thick" (one 21 cm. in width and the other 15 cm. in width) and the third superscribed as "Thin" (21 cm. in width). These samples were retained in the custody of the Senior Vice-President, pending the further hearing of the case, which was adjourned to 24-10-83.

5. The Bench also gave a direction to the learned SDR, Shri Tayal, to check whether any test had been carried out by the Customs laboratories on samples drawn on 3-11-82, and if so, to file copies of the test report by 10-10-83.

6. The matter came up again before the present Bench on 24-10-83, but could not be heard at length for lack of time. It was, therefore, taken up today. In view of the change in the constitution of the Bench, Shri Kohli presented his arguments afresh on behalf of the appellants.

7. With reference to the directions given on the previous occasion we observed that the appellants had filed an application, along with two test report Nos. 4923 and 4924 of Messrs Italab Private Limited, as well as an extract from "Fairchild's Dictionary of Textiles". No communication had been received from the SDR regarding the test carried out by the Customs laboratory. Shri Tayal explained that the respon