1990 (3) TMI 153 - AT - Income Tax

Issues Involved:
1. Classification of paper-based decorative laminated sheets/boards.
2. Classification of cotton fabric-based laminates.
3. Classification of paper-based insulators - electrical grade.
4. Eligibility for exemption under specific notifications.

Detailed Analysis:

1. Classification of Paper-Based Decorative Laminated Sheets/Boards:

The appellants manufacture paper-based decorative laminated sheets/boards. The process involves impregnating kraft paper with resin solutions and laminating them under heat and pressure. The Assistant Collector initially classified these products under sub-heading 4811.90, but later reclassified them under sub-heading 3920.21. The Tribunal referenced the case of Amit Polymers & Composites Ltd., Hyderabad v. CCE, Hyderabad, which held that such products are classifiable under Chapter 48, as they are primarily composed of paper with resin acting as a binder. The Tribunal stated, "Plastic sheets, plates, film, foil and strip, which are lacquered or metallised or laminated, supported or similarly combined with other materials are also covered under this heading. The impugned goods are paper impregnated with plastic, in which paper constitutes the core and resin acts as binding agent." Consequently, the Tribunal classified the products under Heading 4818.90 till 28-2-1988 and under Heading 4823.90 on and after 1-3-1988.

2. Classification of Cotton Fabric-Based Laminates:

The process for manufacturing cotton fabric-based laminates involves impregnating cotton fabrics with resin and laminating them under heat and pressure. The Assistant Collector classified these products under sub-heading 3920.37. However, the Tribunal, referencing the case of Hatim Dielectrics (P) Ltd. v. CCE, Calcutta, noted that no plastic sheet emerges during the process, and hence, the classification under sub-heading 3920.37 is not applicable. The Tribunal held, "Plastic sheet, as it is generally known, does not seem to emerge as such in that process. Unless plastic sheet emerges, the question of placing the goods under Item No. 15A(2) (rigid plastic sheets) would not, in our view, arise." Therefore, the Tribunal classified these products under sub-heading 3922.90 till 28-2-1988 and under sub-heading 3926.90 on and after 1-3-1988.

3. Classification of Paper-Based Insulators - Electrical Grade:

The paper-based insulators are manufactured similarly to the cotton fabric-based laminates but with a heavy coating of resin, giving them insulating properties. The Assistant Collector initially classified these products under sub-heading 8546.00, which was confirmed by the Collector. The Tribunal referenced the case of CCE, Ahmedabad v. Metro Wood Engg. Works, which classified similar products under Heading 8546.00 as "Electrical Insulators of any material." The Tribunal applied this ratio and held that the paper-based insulators electrical grade are correctly classifiable under Heading 8546.00.

4. Eligibility for Exemption Under Specific Notifications:

The appellants claimed eligibility for exemption under Notifications 63/82 and 49/87 for paper-based decorative laminated sheets/boards, and under Notifications 132/86 and 53/88 for cotton fabric-based laminates. The Tribunal noted that the question of eligibility for exemption was raised for the first time in these appeals and was not considered by the lower authorities. Therefore, the Tribunal remanded the matters to the Assistant Collector of Central Excise to examine the eligibility for exemption in light of the classifications held by the Tribunal.

Conclusion:

The Tribunal concluded the classification of the products as follows:
- Paper-based decorative laminated sheets/boards: Heading 4818.90 till 28-2-1988 and Heading 4823.90 on and after 1-3-1988.
- Paper-based insulators: Heading 8546.00.
- Cotton fabric-based laminates: Heading 3922.90 till 28-2-1988 and Heading 3926.90 on and after 1-3-1988.

The Tribunal remanded the matters concerning eligibility for exemption to the Assistant Collector of Central Excise for further examination. The appeals were allowed in these terms. The Tribunal also expressed dissatisfaction with the conduct of the Collector of Customs & Central Excise (Appeals), Bombay, for disregarding the Tribunal's earlier decision and relying on undisclosed evidence.

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