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TMI Blog1989 (8) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... 3920.31 (2) Paper based copper clad industrial laminates 3920.31 (3) Glass fabrics based unclad industrial laminates 7014.00 (4) Glass fabric based clad industrial laminates 7014.00 He ordered levy of duty and revision of the classification already ordered accordingly. He also confirmed the demand for duty raised by show cause notice dated 1-9-1986 for Rs. 10,82,699.54 and finalisation of assessments made on provisional basis. The appeal against this order was dismissed by the Collector (Appeals) by order dated 14-6-1988 which is now under challenge in the present appeal. 2. By interim order No. 17/89-C, dated 28-2-1989, the Tribunal directed that, during the pendency of the appeal, assessment should be made as follows :- Heading/sub-headin g Copper clad laminates (both paper based and glass epoxy based) 74.10 Copper unclad laminates and glass epoxy unclad laminates. 85.46" It was further ordered that future clearances should be allowed on execution of bonds without insistence on bank guarantees and that the bank guarantees already executed should not be encashed, till th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision in the case of Bakelite Hylam Ltd. v. Collector of Central Excise [1985 (22) E.L.T. 879]. The Tariff under consideration in that case was the old Tariff but the basic question was whether industrial laminates were raw materials for electrical insulators and not finished insulators (as contended by the Revenue) or electrical insulators. The Tribunal considered the question with reference to the definition of insulators in technical books, dictionaries and Indian Standards Institution s publication Electro Technical Vocabulary - Fundamental Definitions and held that industrial laminates were insulators excluded from the scope of Item 15A(2) of the old Tariff. It was further held that some minor fabrication such as punching or drilling of wholes to be undertaken on the laminates would not detract from the position that the sheets were insulators. Paras 18 to 25 of the said order contained the detailed analysis leading to the above conclusion. 7. Replying to the above contentions, the learned DR, for the respondent, submitted that the basis for the Tribunal s order in the Metro Wood Engineering Works case (supra) was the previous decision in the Bakelite Hylam case. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r electrical machines,..... It will thus be seen that electrical insulators and electrical insulating fittings which stood excluded from Item No. 15A of the old Tariff, stood excluded from Chapter 39 of the new Tariff also by virtue of Chapter Note 2(n). Therefore, the principle of the Bakelite Hylam decision viz. - that rigid laminated plastic sheets, identified as electrical insulators, did not fall under Item No. 15A of the old Tariff as plastic sheets equally applies to the new Tariff where they do not fall under Chapter 39 because the goods are still insulators (notwithstanding the change in the Tariff) which fall under Heading 85.46 in Chapter 85 of Section XVI and so, are excluded from Chapter 39. The Tariff changed bur insulators still stood excluded from being classified as plastic sheets - earlier, because of Explanation II to Item 15A of the old Tariff and now, because of Chapter Note 2(n) to Chapter 39 of the new Tariff. Thus, the learned DR s submission in this behalf is not tenable. 10. Shri Sunder Rajan has referred to the Bombay High Court s judgment in Chemicals and Fibres of India Ltd. v. Union of India and Others 1982 (10) E.L.T. 917 in support of his conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot porcelainware without considering the explanation. Perhaps, the point sought to be made is that but for the amendment, insulators and insulating fittings would have fallen under Item No. 15A of the old Tariff. But that was precisely the dispute in the Bakelite Hylam case (supra) and the Tribunal held that industrial laminates of plastics having electrical insulating properties would fall under Item No. 68 of the old Tariff. In the new Tariff, of course, Heading Nos. 85.46 and 85.47 are specific for insulators and insulating fittings. 12. According to Shri Sunder Rajan, the Tribunal has not, in the Bakelite Hylam case 1985 (22) E.L.T. 879 (para 19), followed the Supreme Court s judgment in Geep Flashlight Industries Ltd. v. Union of India and Others 1985 (22) E.L.T. 3 (SC) whereas it has been followed in its decision in C. C.E; Ahmedabad v. Melamine Fibre Board Ltd. and Others 1988 (36) E.L.T. 139 and Amit Polymers Composites Ltd. v. C..C.E. 1989 (39) E.L.T. 674. Thus, according to Shri Sunder Rajan, there is a contradiction and the present appeal should be placed before a Larger Bench. 13. In para 19 of the Tribunal s decision in the Bakelite Hylam case (supra), it is cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecause that heading covers laminated sheets. The words used are : Other plates, sheets,...., of plastics, non-cellular, whether lacquered....or laminated, supported or similarly combined with other materials or not." Laminate , according to the Concise Oxford dictionary means manufacture by placing layer on layer and, according to the Chambers dictionary to make by putting layers together . It follows, in our view that first there must be a plastic sheet as it is generally known. Then it may be laminated with a layer of other materials. In the present instance, the process of manufacture, as set out by the appellants and not controverted by Revenue, is that the base - paper or glass fabric - is passed through a resin bath which results in resin-impregnated paper or glass fabric. It is then passed through a drying chamber or oven. The treated material is cut according to sizes which are then placed one over the other in a parallel arrangement. Heat and pressure are then applied consolidating the several layers into one mass which is finished by edge trimming as required. It may thus be seen that a plastic sheet, as such, does not come into existence in the process. Even in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed upon each other in a parallel arrangement, whereupon heat and pressure are applied to consolidate them into a permanently bonded and infusible unitary mass. This final essential operation is called pressing or molding. Various auxiliary finishing operations are conducted as necessary. This shows that resin is a binder and it binds layers of materials such as paper or fabrics in sheet form. Therefore, the question of a plastic sheet, as such, being laminated with layers of other materials does not seem to arise. We have noted the process of manufacture of the subject goods. It also does not suggest the emergence of a plastic sheet which is then laminated with layers of other materials. 19. Reliance is placed by Shri Sunder Rajan, also on the Explanatory Notes under Chapter 39 of the C.C.C.N (Customs Co-operative Council Nomenclature) and the Explanatory Notes under Chapter 39 of the H.S.N. (Harmonised System of Nomenclature). The new Tariff is essentially based on the latter nomenclature. The C.C.C.N. Notes under Chapter 39 state that Headings 39.01 to 39.06 include plates, sheets etc., provided they retain the essential character of products of artificial plastic mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the old Tariff. In so far as the new Tariff is concerned, there is a specific heading for electrical insulators. 21. Shri Sunder Rajan has also referred to the Tribunal s decision in C. C; Bombay v. Wash Udyog Sawantwadi 1987 (31) E.L.T. 73 in support of his plea for classification of the unclad laminates under Heading 39.20. In that case, the goods were presspahn paper based laminated with polyester film. Though the plastic portion was the minor compartment in the laminate, the Tribunal found that the essential character of temperature resistance and higher degree of dielectric strength was due to the plastic component and, applying Interpretation Rule 3(b), classified the laminate under heading 39.01/06 of the Customs Tariff Schedule. In the present case, it has not been shown as to which component imparts to the laminate its essential character. In any event, we have found that the more specific heading is electrical insulators. The cited decision is of no assistance to the Revenue. 22. Though it does not seem necessary to dilate any further on the dispute, we would be doing injustice to the learned Departmental Representative and the Revenue if we do not advert to the subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... give flexible or rigid support to electrical conductors or equipment and to insulate these conductors or equipment from earth or from other conductors or equipment. The contention is that the subject goods do not conform to the definition. It may be seen that in the Bakelite Hylam case 1985 (22) E.L.T. 879 (supra), the definition of the term, essentially on the same lines, was considered by the Tribunal in para 24 of that order. 28. With reference to pages 84-91, 92-107 - I.S. : 2036-1976 Specification for phenolic laminated sheets and I.S. : 1998-6962 Methods of Test for Thermosetting Synthetic Resin Bonded Laminated sheets , the submission is that, according to these standards, industrial laminates have different grades and end-uses. End-uses are varied : eg : bearing and gear manufacture, radio, switchgear. Some are for mechanical applications where electrical properties are of secondary importance. Some have good machining and punching properties. Some possess very good electrical properties. While this may be so, the case of the Revenue is not advanced unless it is shown that the subject laminates are used not so much for their insulating as for other properties. On the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have already noted, these laminates are not laminated plastic sheets - in fact, plastic sheets do not emerge in the manufacturing process. So, Chapter 39 would be inapt. 31. Some more documents have been placed in the compilation. We do not consider it necessary to touch upon all of them because they do not seem to throw any fresh light on the dispute. 32. We now turn to copper-clad paper based laminates and copper-clad glass fabric based laminates. The lower authority has classified the goods under sub-heading Nos. 3920.31 and 7014.00 respectively. The appellants contention before us is that these fall under heading No. 74.06 which reads - 74.06 - 7406.00 Copper Foil These, according to them, are exclusively used for making Printed Circuit Boards and the copper foil gives the product its essential character. 33. Reliance is placed by the learned Counsel for the appellants on Para 12 of the Tribunal s decision in the case of Metro Wood Engineering Works and Others (supra). Therein, the Tribunal after considering Statutory Note l(viii) to Chapter 74 and other authorities, concluded that copper clad laminates were classifiable as copper foil under sub-heading No. 7406. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was incomplete : it was only Electrical insulators paper/fabric/glass based instead of using the words Industrial laminates . Though the period for which demand was made was only six months preceding the date of the show cause notice, the Asstt. Collr. was incompetent to issue the notice since the Collector alone could have issued the notice alleging wilful mis-statement, suppression of facts etc. 37. The learned DR countered the above contentions by submitting that though the Assistant Collector, in his notice dated 1-9-1986, alleged suppression and mis-statement, he did not invoke the proviso to Section 11A(1) of the Central Excises and Salt Act. The period of demand was also not the extended period but the normal limitation of six months. Hence, submitted the DR, the Assistant Collector was competent to adjudicate the notice. 38. We are unable to agree with the Revenue s contentions. Section 11A(1) makes a clear distinction between cases where short-levy has arisen by reason of fraud, collusion or any wilful mis-statement or suppression of facts, and cases where short-levy is due to other reasons. In the latter case, the notice may be issued by any Central Excise officer. ..... 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