9911796707
TMI Blog1983 (6) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... n the ground that the goods consisted of presspahan paper board laminated with polyester film. Subsequently, the respondent made two refund applications contending that the goods were classifiable under Chapter 48 CTA read with Notification No. 37/78-Cus. In terms of this notification, electrical grade insulation paper and electrical grade insulation paper board falling under Chapter 48 were partially exempt from basic customs duty and there was full exemption from countervailing duty. The Asstt. Collector of Customs, however, closed both the refund claims and informed the respondent that since the assessment of E class insulating paper was under consideration of the Central Board of Excise and Customs, he would take up the matter after the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed its essential characteristics of electric insulation to the plastic portion rather than to the paper backing. That being so, the correct classification of the goods appeared to be under Heading 39.01/06 CTA with CV duty under Item 17(2) CET whereunder assessment had been done originally by the Custom House. By the subject show cause notice, the Central Government called upon the respondent, as to why the original assessment should not be restored. The proceedings initiated by this show cause notice have since been transferred to this Tribunal and have been taken up as the subject appeal. 2. The case was heard on 21-6-1983. The Department's representative made a preliminary point saying that the Appellate Collector had exceeded his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... polyester film did not possess insulating properties and, therefore, it could not be said to have given the essential character to the goods. Polyester film by itself was a well-known insulating material. It was used quite extensively for insulating cables. The Department's representative stated further that insulating materials were of various grades or class - A, B, C, D, E etc. Each grade or class denoted a particular extent of temperature resistance and dielectrical strength of the insulating material. E class insulating material could withstand 120°C of temperature and possessed a much higher degree of dielectrical strength than A class insulating material. The respondent had imported E class material for use in electric motors. El ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he essential character to the goods. The respondent argued that presspahn paper or board component of the goods was predominant as it was 10 mils while the polyester film component was only 1 mil. He maintained that the polyester film only enhanced the insulating property of the presspahn paper or board. The Department's stand itself was contradictory; whereas the Department maintained that for the basic customs duty the goods were classifiable as articles of plastic, the Department treated them as paper or board for the purpose of charging countervailing duty under Item 17(2) CET. He added that Note 2 to Chapter 39 of the CTA excluded the subject goods from the purview of that Chapter since the subject goods were not a result of any chemic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss - to suit his particular electric insulation requirements. This E class insulating material must possess temperature resistance of 120°C plus higher degree of dielectric strength etc. Presspahn paper or board is not capable of giving insulation of such high degree. Such high degree of insulation in E class material comes only from the plastic film portion of the goods. Without the plastic film portion, the goods do not become E class, even though impregnated presspahn paper or board, by itself, is also an insulating material. We have, therefore, no doubt in our mind that in the composite material, the essential characteristics of E class electric insulation come from the plastic portion rather than the paper backing. Since classifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat since the paper portion is 10 mils and the plastic portion only 1 mil in the composite goods, the goods should be classified as paper on the basis of predominant content. Interpretative Rule 3(b), which is the relevant rule applicable in this case, does not lay down the principle of classification on the basis of predominant content but on the basis as to which of the component gives the goods their essential character. Thus, it is not the bulk but the property of giving the essential character which is the criterion applicable to the case before us and since in E class insulating material the essential characteristic of higher degree of insulation comes from the plastic portion, the classification has to be under Heading 39.01/06 only. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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