1994 (11) TMI 147 - AT - Central Excise

Summary

Issues Involved:
1. Classification of 'Aluminium Foil backed by paper and polyethylene'.
2. Applicability of Rule 1 vs. Rule 3 of the Rules for Interpretation of the Central Excise Tariff.
3. Determination of essential character for classification purposes.

Summary:

1. Classification of 'Aluminium Foil backed by paper and polyethylene':
The primary issue was whether 'Aluminium Foil backed by paper and polyethylene' should be classified under Sub-heading 7606.00 of the Central Excise Tariff Act, 1985, or as "Laminated paper" under Sub-heading 4811.29. The appellants argued that the product should be classified under Chapter 48, referencing the Tribunal's decision in the NDDB case, which classified a similar product under sub-heading 4811.29. They contended that the essential character of the product was provided by the paper, which was the major constituent by weight.

2. Applicability of Rule 1 vs. Rule 3 of the Rules for Interpretation of the Central Excise Tariff:
The respondents argued that the classification should be determined according to Rule 1, which prioritizes the terms of the headings and any relevant Section or Chapter Notes. They contended that the NDDB case incorrectly applied Rule 3(a) instead of Rule 1. The Tribunal examined the relevant notes and found that the product fits the definition of 'Aluminium Foil' in Note 1(viii) of Chapter 76, thus ruling out classification under Chapter 48.

3. Determination of essential character for classification purposes:
The Tribunal concluded that the product, consisting of aluminium foil reinforced with plastic and backed with paper, should be classified under Heading 76.06 as 'Aluminium Foil'. The majority opinion held that the essential character of the product was not provided by the paper but by the aluminium foil, as defined in Note 1(viii) of Chapter 76. Consequently, the appeal was rejected, and the product was classified under Heading 7606.00.

Separate Judgment by Vice President S.K. Bhatnagar:
Vice President S.K. Bhatnagar dissented, arguing that the essential character criterion in Rule 3(b) was more appropriate. He opined that the product should be classified under Chapter 48, as the paper/paper board provided the bulk support and essential character, despite the presence of aluminium foil. He concluded that the product should be classified under sub-heading 4811.90.

Conclusion:
The majority decision classified the product under Heading 7606.00 of the Central Excise Tariff, while the dissenting opinion classified it under sub-heading 4811.90.