1993 (3) TMI 110 - HC - Central Excise

Block Board classifiable - Classification of goods. - Trade parlance - Interpretation of taxing statute

Issues Involved:
1. Correct classification and entry of Block Board under the Central Excise Tariff Act, 1985.
2. Applicability of entry 4408.90 vs. 4410.90 for Block Board.
3. Impact of amendments introduced by the Finance Act, 1990 and 1992 on the classification.
4. Interpretation of the term "similar laminated wood" and the definition provided in Note 5.

Detailed Analysis:

Issue 1: Correct Classification and Entry of Block Board

The primary dispute in these writ petitions is the correct classification of Block Board manufactured by the petitioners under the Central Excise Tariff Act, 1985 (1985 Act). The petitioners argue that Block Board falls under entry 4410.90, while the Department contends it falls under entry 4408.90.

Issue 2: Applicability of Entry 4408.90 vs. 4410.90

Pre-Amendment Period (Before 1990):
- 1944 Act: Block Board was classified under Item 16(B) along with plywood and other wood articles.
- 1985 Act: The relevant entries were:
- 44.08: Plywood, Veneered panels, and Similar laminated wood.
- 4408.90: Others (30% duty).
- 44.10: Articles of wood not elsewhere specified.
- 4410.90: Others (12% duty).

The CEGAT judgment dated 18-10-1989, in Wood Graft Products Ltd. v. Collector of Central Excise, upheld that Block Board falls under entry 4410.90, as it is not considered "similar laminated wood" in the commercial sense.

Post-Amendment Period (1990 onwards):
- Finance Act, 1990: Introduced Note 5 defining "similar laminated wood" to include Block Board with cores glued together.
- Finance Act, 1992: Amended Note 5 to include "glued or otherwise joined together."

The Excise authorities classified Block Board under entry 4408.90 based on the amended definitions.

Issue 3: Impact of Amendments Introduced by the Finance Act, 1990 and 1992

Finance Act, 1990:
- Introduced Note 5, defining "similar laminated wood" to include Block Board with cores "glued together."
- The purpose was to enlarge the meaning of "similar laminated wood" to include Block Board with specific characteristics.

Finance Act, 1992:
- Amended Note 5 to include cores "glued or otherwise joined together."
- This further clarified and expanded the definition to include different manufacturing processes of Block Board.

Issue 4: Interpretation of "Similar Laminated Wood" and Note 5

Pre-1990 Interpretation:
- The term "similar laminated wood" did not include Block Board, as per the commercial understanding and the Indian Standards Institution (ISI) definitions.
- Block Board was distinct from laminated wood and fell under entry 4410.90.

Post-1990 Interpretation:
- Note 5 (1990) included Block Board with cores "glued together."
- The Court interpreted "glued together" in its natural sense, meaning blocks must be glued or adhered together.
- The 1992 amendment expanded this to include cores "glued or otherwise joined together," encompassing different manufacturing methods.

Court's Conclusion:
- For the period before the 1990 amendment, Block Board falls under entry 4410.90.
- For the period after the 1990 amendment but before the 1992 amendment, the definition in Note 5 (1990) applies, meaning Block Board with cores "glued together" falls under entry 4408.90.
- After the 1992 amendment, Block Board with cores "glued or otherwise joined together" falls under entry 4408.90.

Judgment:

The Court allowed the writ petitions, directing the respondents to classify Block Board manufactured by the petitioners under entry 4410.90 for the period before the 1990 amendment and under the appropriate entry based on the amendments for subsequent periods. Each party will bear their own costs.

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