1987 (10) TMI 286 - AT - Central Excise

Summary

Issues: Classification of aluminum foils with multiple laminations under Tariff Item 27(c) or Tariff Item 68, Duty assessment at different stages of lamination, Interpretation of terms "backed with paper or other reinforcing material"

In this case, the appellants were engaged in manufacturing aluminum foils backed with polythene and/or paper as reinforcing materials, classified under Tariff Item 27(c). The dispute arose regarding the duty liability for aluminum foils with multiple laminations. The Asstt. Collector and the Collector held that duties were chargeable on foils with double or multiple laminations. The appellants argued that duty should only be charged at the initial lamination stage and not for subsequent reinforcements, citing previous judgments. The department contended that duty should be charged at the final stage when the product is cleared with multiple laminations. The Tribunal analyzed the classification under Tariff Item 27(c) and observed that the product, despite multiple laminations, remained foils falling under the same item. The Tribunal considered the intrinsic value of the product at the time of clearance for duty assessment, emphasizing substantial transformation at each stage. The Tribunal rejected the contention that duty should only be charged at the initial stage and upheld the duty assessment at the stage of final backing or reinforcement.

The second judgment delivered by a different member addressed the issue of interpreting the term "backed with paper or other reinforcing material" in Tariff Item 27(c). The member rejected the argument that only the first lamination should be charged duty, emphasizing that the duty should be calculated based on the highest value the foil attains when entering the market. The member clarified that the grammatical number in the term "backed with paper or other reinforcing material" should not be read as limiting to a single layer, allowing for multiple backings with different materials. The judgment discouraged technical interpretations, emphasizing the need for a reasonable construction of the law. It concluded that all backed foils, regardless of the number of backings, should be subject to duty assessment at or after the stage of the last backing or reinforcements.

Overall, the Tribunal upheld the duty assessment on aluminum foils with multiple laminations under Tariff Item 27(c), rejecting the argument for duty only at the initial lamination stage and emphasizing duty calculation based on the product's highest value at clearance. The interpretation of terms in the tariff entry highlighted the need for a reasonable construction of the law to ensure fair and just taxation practices.