2006 (11) TMI 219 - SC - Central Excise

Classification of goods - Authority in Original dropped the demand on the ground that there is no demand under tariff item 68 where these items are classifiable - Held that - It is the contention of the Central Excise Department that industrial laminates and glass epoxy laminates cannot be considered as electrical insulators because these sheets are required to be cut in the requisite shape and holes may have to be punched in them before they could be fitted as insulators. However mere cutting or punching holes does not amount to manufacture. These sheets have insulating properties and are used as electrical insulators. They cannot be taken out of the category of electrical insulators only because they have to be cut to the requisite shape or a few holes may be required to be punched in them in order that they may fit into the electrical instrument/appliance in question. The Tribunal therefore has correctly classified these industrial laminates and glass epoxy laminates under Tariff Item 8546 of the New Customs Tariff (after 1-3-1988) and under Tariff Entry 7014 under the New Customs Tariff up to 28-2-1988. Under the Old Customs Tariff however there is no express entry dealing with electrical insulators equivalent to Entry 8546.00 of the New Customs Tariff. Entry 15-A(2) of the Old Tariff will not cover these laminated sheets also for the same reason as in the case of decorative laminated sheets. These sheets therefore have been rightly classified under the residuary Tariff Entry 68 of the Old Customs Tariff - Following decision of Collector of Central Excise Hyderabad v. Bakelite Hylam Ltd. 1997 (3) TMI 598 - SUPREME COURT - Decided against Revenue.

Summary

Issues: Classification of goods under the Central Excise Tariff.

In this case, the issue revolved around the classification of goods under the Central Excise Tariff. The assessee had been classifying goods under tariff item 68 before a show cause notice was issued proposing a demand under tariff item 15A(2) with an extended period of limitation. The Authority in Original dropped the demand, stating that there was no demand under tariff item 68 where the items were classifiable. The Revenue appealed this decision before the Tribunal, which dismissed the appeal. The Supreme Court, after hearing both sides, found no infirmity in the Tribunal's order. The Court referred to a previous judgment in Collector of Central Excise, Hyderabad v. Bakelite Hylam Ltd., which clarified the classification of industrial laminates and glass epoxy laminates as electrical insulators. The Court upheld the Tribunal's decision based on the precedent, dismissing the appeal and leaving the parties to bear their own costs.