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Ambiguity on classification of polyester staple fibre manufactured out of PET scrap and waste as to whether it be considered as textile material or as an article of plastic. The Board put forward that the decisions in GPL Polyfils case shall not be a binding precedent in other matters — The said paragraph struck down by the High Court — Held that Circulars can be referred for guidance, but not as binding mandate — In case of adverse decision, no coercive action as to demand until stay application decided by CESTAT.
Facts:
Polyester staple fibre was manufactured out of PET scrap and waste bottles since the classification of the item involved technical aspect the writ petition by the High Court could not solve the issue.
The CBEC issued a Circular as to classification of polyester staple fibre manufactured out of PET scrap and waste bottles and it was contrary to the Tribunal decision in the case of GPL Polyfils, on the same issue. The Circular specifically instructed its officers that the Tribunal decision in GPL Polyfils was not a binding precedent.
Held:
As regards the classification issue it was held that according to paragraph 8 of the Circular, it is to be classified as textile material and not as a plastic article. With reference to paragraph 10 of the impugned Circular, the same was struck down by the High Court stating that the Circular shall not be binding. Further, it stated that the adjudicating officers must take into consideration the Tribunal decision in GPL Polyfils and applicability of the same should be looked into.
