1989 (6) TMI 186 - AT - Customs

Issues Involved:
1. Classification of imported electrical grade insulating paper under the Customs Tariff Act, 1975.
2. Applicability of Notification No. 37-Cus., dated 1st March, 1978.
3. Levy of additional duty of Customs under Tariff Item 17(2) of the erstwhile Central Excise Tariff (CET).
4. Countervailing duty classification under the CET.

Detailed Analysis:

1. Classification of Imported Electrical Grade Insulating Paper:
The importers had imported consignments of electrical grade insulating paper and claimed their assessment under Heading 48 of the Customs Tariff Act (CTA), 1975. The goods were multilayer insulating materials made of various materials, with at least one layer being plastic. The composite material had essential characteristics of electrical insulation due to the plastic portion rather than the paper backing. Citing Rule 3(b) of the interpretation Rules, the Tribunal held that the composite insulation materials made up of plastic portion and papers were classifiable under Heading 39.01/06 of the CTA, 1975.

2. Applicability of Notification No. 37-Cus., dated 1st March, 1978:
The importers claimed a concessional rate of duty under Notification No. 37-Cus., dated 1st March, 1978. However, since the goods were classified under Heading 39.01/06, the benefit of Notification No. 37/78-Cus., which was applicable to goods covered under Heading 48.01/21, was not available. The original assessment by the Revenue was upheld, and the claim was rejected.

3. Levy of Additional Duty of Customs under Tariff Item 17(2) of the CET:
The importers argued that the goods should be reassessed under Heading 48.01/21 read with Notification No. 37/78-Cus., or alternatively, the benefit of Notification No. 68/71-C.E. for the purpose of additional duty of customs should be given. The learned Collector of Customs (Appeals) did not accept the contention, following a previous Tribunal decision that the essential characteristics of 'E' class electrical insulation came from the plastic portion rather than the paper backing. Consequently, the goods were classified under Heading 39.01/06 for basic customs duty and under Item 68 of the CET for countervailing duty.

4. Countervailing Duty Classification under the CET:
During the proceedings, the Revenue initially claimed assessment under Tariff Item 15A(2) of the CET but later argued for assessment under Tariff Item 17(2). The Tribunal, however, held that the goods, being composite materials where both components possess insulation properties, should be classified under the residuary Item 68 of the CET for countervailing duty. This decision was consistent with previous Tribunal judgments and the application of Interpretative Rule 3(b).

Conclusion:
The Tribunal dismissed all 26 appeals filed by both the Revenue and the importers. The goods were held to be classifiable under Heading 39.01/06 of the CTA, 1975 for basic customs duty and under Item 68 of the CET for countervailing duty. The delay in filing cross-objections by the Revenue was condoned, but the cross-objections were also dismissed as the Tribunal upheld the classification under Item 68 of the CET for countervailing duty.

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