1988 (2) TMI 359 - AT - Customs

Issues Involved:
1. Classification of film laminates under the Customs Tariff Schedule.
2. Levy of additional duty of Customs under the Central Excise Tariff Schedule (CET).

Issue-wise Detailed Analysis:

1. Classification of Film Laminates under the Customs Tariff Schedule:

The appellants imported film laminates and contested their classification by Customs authorities under Heading No. 48.01/21(1) as coated paper. They argued that the goods should be classified as chemicals under Heading No. 38.04/19(1). The Tribunal noted that the goods consisted of a thin film of electrolyte paste on carrier paper, integral to the production of layer-built dry batteries. The appellants' claim was based on the argument that the film laminate's function was chemical rather than paper-related.

However, the Tribunal referenced a prior decision (Union Carbide India Ltd. v. Collector of Customs, 1983 E.L.T. 2443) which had already classified similar goods under Heading No. 48.01/21(1). The Tribunal found that the description of Heading No. 48.01/21(1) was broad enough to include paper impregnated or coated with chemicals. They also considered the Explanatory Notes under Heading No. 48.07 of the Customs Cooperation Council Nomenclature (CCCN), which supports the classification of paper coated with chemicals.

The Tribunal concluded that the film laminate, being a coated paper, was correctly classified under Heading No. 48.01/21(1). The argument that the chemicals gave the film laminate its essential function did not hold, as the paper base was integral to the product. Consequently, the Tribunal upheld the classification under Heading No. 48.01/21(1).

2. Levy of Additional Duty of Customs under the Central Excise Tariff Schedule (CET):

For the levy of additional duty of Customs, the appellants contended that the goods should be classified under the residual Item No. 68 of the CET rather than Item No. 17. The Tribunal examined several precedents, including Basant Pran Electric Co. v. Collector of Central Excise and Collector of Customs, Bombay v. Yash Udyog, which dealt with similar issues of classification for composite goods.

The Tribunal noted that the decisions cited by the appellants were not applicable as they pertained to periods or contexts different from the present case. The Tribunal emphasized that the goods in question were coated paper, not laminates of different materials. Therefore, the goods were correctly classifiable under Item No. 17(2) of the CET.

In Appeal No. 30/83, the Assistant Collector initially demanded additional duty under Item No. 15A(2) of the CET but had earlier classified the goods under Item No. 17(2). The Appellate Collector did not provide a ruling on the CET classification. The Tribunal found that the demand for additional duty under Item No. 15A(2) was unsustainable and set it aside. However, the Tribunal upheld the classification under Item No. 17(2) for the levy of additional duty of Customs.

Conclusion:

The Tribunal disposed of the appeals by upholding the classification of the film laminates under Heading No. 48.01/21(1) of the Customs Tariff Schedule and Item No. 17(2) of the CET for the purpose of additional duty. The demand for additional duty under Item No. 15A(2) was set aside, and any excess amount paid by the appellants was to be refunded.

← Previous Next →