2011 (9) TMI 3 - SC - Central Excise

Classification on laminated panels of particle and medium density fiber board - manufacture - sub- heading no. 4406.90 and 4407.90 or under sub-heading no. 4408.90 - Held that - the product after lamination assumes a distinct marketability and brings about a change in the product. This change, after lamination makes the product fall outside the purview of chapter heading 44.06 and that would place the product under chapter heading 44.08 as the word used under chapter heading 44.08 is similar laminated wood Further recourse may also be taken to rule 3 (c) of the Rules for interpretation of the Act which envisages that if the products are capable of classification under two chapter headings, then as per the said rule, the classification must be under the heading which occurs last in the numerical order. Therefore, heading 4408.90 would be the appropriate sub heading for classification of the product in question.

Issues: Classification of laminated panels of particle and medium density fiber board under specific sub-headings.

Analysis:
1. The issue at hand is the classification of laminated panels of particle and medium density fiber board under sub-heading no. 4406.90 and 4407.90 or under sub-heading no. 4408.90. The appellant contended that the products should be classified under 4408.90 based on Chapter Note 5 of Chapter 44 of the Central Excise Tariff Act, 1985.

2. The respondent, engaged in manufacturing wood products, was issued show cause notices by the appellant authorities to change the classification of its products. The Commissioner of Central Excise dropped the proposed demand after finding that the prerequisites of Chapter Note 5 of Chapter 44 were not met. The Revenue appealed to the Tribunal, which upheld the Commissioner's findings.

3. The appellant argued that the products should be classified under 4408.90 as they are laminated wood products covered under Chapter heading 44.08. They emphasized the importance of the manufacturing process and the absence of the word "Panel" in the respondent's submission under Rule 173 B of the Act.

4. The Tribunal's dismissal of the Revenue's appeals led to the present appeals being filed. The appellant contended that if a product can be classified under two headings, Rule 3 (c) of the Rules for interpretation of the Act mandates classification under the heading that occurs last in numerical order, making 4408.90 the appropriate sub-heading.

5. The respondent argued that Chapter Note 5 of Chapter 44 requires the laminated wood to be surfaced with outer plies, which was absent in the present case. They claimed that impregnation was an additional process done on the particle board, keeping the products under heading 4406.

6. The Court analyzed the manufacturing process provided by the factory manager, which involved impregnating paper sheets with resin and assembling them with mother boards to create pre-laminated boards falling under Chapter heading 44.08. The Court referenced previous judgments to support the classification of similar laminated wood products under 44.08.

7. The Court concluded that the products, after lamination, were distinct from their original form and fell under 44.08 due to their similarity to plywood and veneered panels. The Tribunal's classification of the products under 44.06 was deemed incorrect, and the products were to be classified under 44.08 based on the manufacturing process and Rule 3 (c) of the Act.

8. The Court set aside the Tribunal's judgments, allowing the appellant to assess the respondent based on the new classification under 44.08. Each party was to bear its own costs in the matter.

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