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TMI Blog1989 (6) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment made by the Department under different heading/tariff item. Since the facts of all the appeals are similar, for the sake of brevity the facts in the case of M/s. Precious Industries v. C. C,. Bombay (Appeal No. 2393/83-C) are given below :- 3.M/s. Precious Industries, Bombay had imp led electrical grade insulating material as under :- Ex. ss. Hapag Lloyd Express B/E Cash number (1) 1458 dated 4/6-9-1982 (2) 293/30-10-1982 (3) 4096/15-10-1982 (4) 1459/4/6-9-1982 (5) 9873/24-7-1982 The importers had made a claim of refund on the ground that the goods electrical grade insulating materials are chargeable to duty at the concessional rate in terms of Notification No. 37-Cus., dated 1st March, 1978. The goods imported were electrical grade insulating papers. These were high temperature resisting materials. The imported goods were in the nature of multilayer insulating materials made of various materials by glueing and that at least one of the layers is plastic sheet. The composite material in question has got essential characteristics of electrical insulation to the plastic portion rather than the paper backing. In the light of Rule 3(b) of the interpretation Rules, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al in which both the components are active components in the sense both the materials possess insulation properties, the appropriate Central Excise Tariff for the goods would be the residuary Item 68. He had upheld the classification of the impugned goods under Heading 39.01/06 of the CTA and for countervailing duty he had ordered the classification under Item 68 of the CET. Being aggrieved from the aforesaid order, the appellants have come in appeal before the Tribunal. 4. Notices of hearing were sent to all the parties. Shri S.D. Nankani, the learned Advocate had appeared on behalf of the importers. No other importer had appeared. Shri S.D. Nankani, the learned Advocate who had appeared on behalf of M/s. Precious Industries on 19th and 20th December, 1988 had argued the matter but due to change in the constitution of the Bench the judgment could not be released. Accordingly fresh notices of hearing were sent to the parties. Nobody has appeared on behalf of the importers. Shri S.D. Nankani, the learned Advocate vide his letter dated 18th April, 1989 received in the Registry on 24th April, 1989 had intimated that the appeals may be decided on the basis of the submissions alre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. These goods are made of paper and polyester film laminate and are used as insulating materials. We have said above that both plastic and paper are good electrical insulating substances. Both resist the passage of electricity and both, in their own rights, are known and are used as electrical insulating material and both are equally good. Plastics may have the advantage of greater strength and better tolerance of high temperature but as far as electrical non-conductivity is concerned the two are equal in performance. When they are used together one complements and supplements the other to increase the utility of the composite in a synergistic total. But it is impossible to say which is the dominant component in electrical insulation. It may be possible in a laboratory to determine this by subjecting the two constituents of the insulating grade paper to a thorough physical test. Such a test was not done and so we can safely say that the two partners make equal contribution as indeed well they could. Neither party to this dispute has proved one component was more resistant electrically than the other. Shri A.S. Sunder Rajan, the learned JDR has again referred to the judgment; in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition explained by him the imported goods merit classification under Chapter 48 and not under Ch. 39 of the CTA. The goods imported is paper laminated with polyester. He has again referred to internal page 11 of IS: 1271-1958 and has stated that 'Y' Class principal is paper and paper products and 'E' class subsidiary is Paper laminates. Cellulose triacetate film & Polyethylene terophthalate film. Shri Nankani, the learned Advocate has also again referred to the grouping of the insulation into class 'Y', 'A', 'E', 'F', 'H' and 'C' as per internal pages 7 & 8 of the IS : 1271-1958 and has laid special emphasis on class 'E' which reads "insulation consists of materials or combination or materials which by experience or accepted tests can be shown to be capable of operation at Class E temperatures (materials possessing a degree of thermal stability allowing them to be operated at a temperature 15 Centigrade degrees higher than Class A materials). He has referred to unamended and amended Interpretatory Rules to the Customs Tariff Act as per Schedule I which appears on pages 41 to 43 of the paper book. Shri Nankani has argued that as per unamended Interpretatory Rule 3(c) "when goods ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal) and has laid special emphasis on para numbers 10 & 11 of the said judgment where the Tribunal had held that the duty was paid originally as printing and writing paper under 17(1) and after the process it has shifted from one duty zone viz., 17(1) to 17(2) of the CET. Shri Nankani has referred to the judgment of the Tribunal in the case of M/s. Solar Electric Trading Co. v. Collector of Customs, Bombay vide Order No. C-371/85, dated 15th May, 1985 and in particular internal page 3 of the said order appearing on page 137 of the paper book. He has also again referred to the Bill of Entry which appears on page 131 of the paper book and states that the importers had claimed the assessment under Heading 4811.31. Shri Nankani pleads that the assessment may be made under Chapter 48 of the Customs Tariff Act, 1975 and for the purpose of countervailing duty, duty be levied under Item 17(2) of the CET. 8. Shri A.S. Sunder Rajan, the learned JDR stated that the revenue had filed cross-objections and delay in the filing of the same may be condoned as the Revenue was prevented by sufficient cause in the late filing of the same. He further stated that the only issue in the cross-ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and polymethacrylic derivatives, coumaroneindene resins); regenerated cellulose; cellulose nitrate, cellulose acetate and other cellulose esters, cellulose ethers and other chemical derivatives of cellulose, plasticised or not (for example, collodions, celluloid); vulcanised fibre; hardened proteins (for example, hardened casein and hardened gelatin); natural resins modified by fusion (run gums); artificial resins obtained by esterification of natural resins or of resinic acids (ester gum); chemical derivatives of natural rubber (for example, chlorinated rubber, rubber hydrochloride, oxidised rubber, cyclised rubber), other high polymers, artificial resins and artificial plastic materials, including alginic acid, its salts and esters; linoxyn. (a) 200% 15A, 15B, 16B 39.07 Articles of the materials described in Heading No. 39.01/06 (a) 100% 15A, 15B, 16B 11. Explanatory Notes to the Brussels Nomenclature : Vol. 2, appearing on pages 45 to 47 of the paper book, are also reproduced below :- "Chapter 48 (page667/668) Paper and Paperboard; Articles of Paper Pulp, of Paper or of Paperboard GENERAL This Chapter covers: (I) Paper and paperboard (including cellulose wadding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Interpretatory Rules. Interpretatory Rules (3) and (4) to the First Schedule to the Customs Tariff Act, 1975 are reproduced below :- "3. When for any reason, goods are, prima facie, classifiable under two or more Headings, classification shall be effected as follows : (a) The Heading which provides the most specific description shall be preferred to Headings providing a more general description. (b) Mixtures and composite goods which consist of different material or are made up of different components and which cannot be classified by reference to (a) shall be classified as if they consisted of the material or component which gives the goods their essential character, insofar as this criterion is applicable. (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the Heading which occurs latest among those which equally merit consideration. 4. Goods not falling within any Heading of the Schedule shall be classified under the Heading appropriate to the goods to which they are most akin." 13. A simple reading of the Interpretatory Rule 3(b) shows that the complete article may, as in this case, be made up of two materials, both o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferring to coolers should be applied." 15. Accordingly, we rule out the classification under Heading 48 and hold that the goods are classifiable under Heading 39.01/06 of the CTA, 1975 for the levy of basic customs duty. 16. Now coming to the countervailing duty we would like to observe that the importers' claim was under Tariff Item 17(2) of the CET whereas the Revenue had assessed the same under Tariff Item 15A(2) except in Appeal Nos. CD/SB/1109/84-C and C-1795/85-C in the case of CC Bombay v. Shashi Electricals and Shashi Electricals v. CC, Bombay where the same was assessed under Tariff Item 68. The Revenue in the proceedings before the Tribunal had claimed assessment under Tariff Item 15A(2) and the importers all along had claimed the levy of CV Duty under Tariff Item 17(2) of the CET. During the course of arguments Shri A.S. Sunder Rajan, the learned JDR had pleaded that though the Revenue had made a claim under Tariff Item 15A(2)of the CET but he does not press the same and pleads that the CV duty may be levied on the imported goods under Tariff Item 17(2). In essence the Revenue as well as the importers want assessment under TI 17(2) for the purpose of CV duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roteins (for example, hardened casein and hardened gelatin); natural resins modified by fusion (run gums; artificial resins obtained by esterification of natural resins or of resinic acids (ester gums); chemical derivatives of natural rubber (for example, chlorinated rubber, rubber hydrochloride, oxidised rubber, cyclised rubber); other high polymers, artificial resins and artificial plastic materials, including alginic acid, its salts and esters; linoxyn. (2) Articles of materials described in sub-item (1), the following, namely: - Boards, sheeting, sheets and films, whether lacquered or metallised or laminated or not; lay flat tubings not containing any textile materials. Fifty per cent ad valorem. (3) Polyurethane foam Seventy-five per cent ad valorem. (4) Articles made of polyurethane foam Seventy-five per cent ad valorem. Explanation I. - Sub-item (1) does not include,-(i) polyurethane foam; (ii) artificial waxes; (iii) starches (including dextrin and other forms of modified starches). Explanation II. - In sub-item (1), "condensation, polycondensation polyaddition, polymerisation and co-polymerisation products" are to be taken to apply only to goods of a kind produ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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