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TMI Blog2001 (11) TMI 530X X X X Extracts X X X X X X X X Extracts X X X X ..... Tariff Act, 1975 and 39.20 under Central Excise Tariff Act. He also imposed a penalty of Rs. 1,86,73,889/- under Section 114A of the Customs Act. 2. The appellant before us is now known as Betts India Ltd., Goa, was previously known as Courtalds Packaging (India) Ltd. The appellants, Betts India Ltd., imported Plastic Laminated Films and described the same as Core of aluminium foil covered on both sides with plastic films and sought to classify the same under Chapter sub-heading 7607.19 of the Customs Tariff Act read with Chapter sub-heading 7607.90 of the CETA which incidentally relates to aluminium foil. The case of the department is that in plastic laminated films, the aluminium foil is not backed but covered on both sides/embedded between four layers of plastic films (two on either side) and as such the imported films cannot be classified under Chapter Heading 76.07; further the structure of the imported film is LLDPE 110 m/PE white 45m/Alu, 30m/PE, 30m/LLDPE 60m, as a result the predominant material in the plastic laminated film is LLDPE and PE i.e. plastic material; on the basis of the CBEC Circular No. 7/90-CX. 3, dated 23-2-1990 as modified by Circular No. 461/27/99- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jain, Chartered Accountant, appeared for the Assessee and Shri A.K. Jain, learned DR, appeared for the Department. 5. Shri Sridharan submitted at the outset that when a manufacturer of cosmetic industry uses the two materials namely polyethylene sandwiching the aluminium foil, the manufacturer tries to obtain maximum benefit out of the investment made by him in packaging the final product namely cosmetics. Traditionally, he cites the tooth paste which is a cosmetic item was packed in aluminium package only i.e. aluminium tubes. Thereafter it was found that it is more convenient, cheaper and profitable to utilise for packing the cosmetic product with the help of LLDPE and aluminium foil. He states that two layers of LLDPE followed by the aluminium foil and thereafter another two layers of LLDPE are used for packing tooth paste. The learned counsel further states that one of the advantages of using LLDPE is the outer material will have better printing of the product ultimately marketed. He also cites several technical books and technical authorities to show as to why the product i.e. packaging material which insists of four layers of LLDPE sandwiching one layer of aluminium foil is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 134 of the paper book, another Book titled Food Processing Technology - Principles and Practice written by P. Fellows page 431 paper book page 92; Kirk-Othmer Encyclopaedia of Chemical Technology Fourth Edition Volume 11 pages 248 249 mentioned at paper book pages 53-54; Book titled Plastics in Contact With Food written by John H. Briston and Leonard L. Katan published by London Food Trade Press Ltd. at page 355 paper book 108; Board Circulars dt. 23-2-1990 and 11-6-1999 clarifying that the aluminium foil which has multiple laminations of polyethylene are to be classified under Heading 3920 and not under Heading 7607. He emphasises the fact that the so called qualities of barrier properties and sealability are prevalent even in LDPE at a lesser degree and he relies on specifically page 117 of the paper book. He also invited our attention to observation of the Tribunal in Sharp Industries [2000 (120) E.L.T. 825 at 827] wherein paragraph 5 thereof the Tribunal held inter alia as follows - It was explained to us that the internal layer of plastic is necessary, to prevent contact between the packed article and the metal and the aluminium which would result in contamination of that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sence of any harmful reaction with the micro-organisms involved in the manufacture of pharmaceuticals is obviously important in this application of aluminium. 8.2 The Wiley Encyclopaedia of Packaging Technology by Marilyn Bakker at pages 347 348 (Pages 51 52 of the paper book) : Aluminium has high resistance to most fats, petroleum greases, and organic solvents. Intermittent contact with water generally has no visible effect on aluminium otherwise exposed to clean air. Standing water in the presence of certain salts and caustics can be corrosive. Aluminium resists mildly acidic products better than it does mildly alkaline compounds, such as soaps and detergents. Use with stronger concentrations of mineral acids is not recommended without proper protection because of possible severe corrosion. Weak organic acids, such as those found in foods, generally have little or no effect on aluminium. A clear vinyl coating, however, is recommended for use with tomato sauce and other acetic foods. *** When water-vapour or gas-barrier qualities are critical to the success of a packaging material, aluminium foil is usually considered. Aluminium foil containers are odourless, moi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -slip properties are introduced for safe stacking, or conversely high-slip properties permit easy movement of wrapped packs into an outer container. Stretch-wrapping uses thinner low-density polyethylene than shrink-wrapping does (25-38 um compared with 45-75 um), or linear low-density polyethylene (17-24 um). Linear low-density polyethylene has a highly linear arrangement of molecules and the distribution of molecular weights is smaller than for low-density polyethylene. It therefore has greater strength and a higher restraining force. The cling properties of both films are biased on one side, to maximise adhesion between layers of the film but to minimise adhesion to adjacent packages. 8.5 Plastics in Contact With Food by John H. Briston and Leonard L. Katan, First Edition, London Food Trade Press Ltd., page 395 (paper book pages 108 109) :- The main non plastics substrates used are paper, fibreboard and aluminium foil. Paper and fibreboard contribute opacity, stiffness (at low cost) and paintability, while aluminium foil has additional properties, such as high temperature performance and impermeability to gases, water vapour, oils and greases. Above a thickness of about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stics from plastic material : (a) From the technical literature on Plastic and Packaging written by A. Athlete published by Tata McGrow Hill Publishing Co. Ltd., New Delhi at its page No. 138 of this literature at table 64 comparison of Barrier properties of Aluminium Foil and Polyethylene has been shown. This table shows that polyethylene which is used on both the sides of the Aluminium Foil in the product also have the resistance/barrier properties to Water vapour, Gas transmission, Odour, Water resistance and Oil resistance but of lesser grading than the Aluminium Foil. (b) the above mentioned literature in part 10 titled as Other Packaging Applications Techniques Related Techniques at its page 249 indicates that in laminated tubes the inner layer of polyethylene provide both barrier protection and sealing medium. (c) In the literature title Food Processing Technology - Principles Practice written by P. Fellows and published by Woodhead Publishing Ltd., England at page 431 it is mentioned that linear low density polyethylene has a highly linear arrangement of molecules and the distribution of molecular weights is smaller than for low density polyethylene. It therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd No. 161/27/99-CX, dated 11-6-99 clearly provides that Aluminium foil which has multiple laminations of Polyester Polypropylene etc. are to be classifiable under 39.20 and not under 76.07. 6. Case Laws : It is squarely covered by the case law reported in 2000 (120) E.L.T. 825 Tribunal of Mumbai - in the case of M/s. Sharp Inds. Ltd. v. CCE Mumbai-III. Order dated 11-7-2000. He also lays stress on the observations made by the Tribunal in Sharp Industries case. 12. The fact remains that the decisions rendered by ERB and WRB are of co-ordinate Benches but in Sharp Industries case we have to observe that technical material which has been provided in this case, were absent. The observations of Sharp Industries, to which great emphasis has been laid by the DR has to be tested with the technical data provided by the appellants before us. 13. In this connection we have to observe that the DR may be correct in observing about the barrier properties mentioned in pages 116 117 of the book titled Plastics in Packaging. As far as foil is concerned, it has got barrier properties. As far as LLDPE is concerned, it has got heat sealability and barrier properties. In the comparison of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal that to that extent it is the plastic that contributes the essential characteristics of the foil. But on the basis of technical literature produced before us, nobody can come to a definite conclusion as to which material namely either metal foil or the plastic gives the essential character to the product in determining the classification. Both materials give synergetic effect to achieve the objective of the assessee. 15. Another able argument of the DR is that in the case of India Foils 2001 (132) E.L.T. 737 (T) = 2000 (39) RLT 304, the material before the Tribunal for consideration was aluminium foil backed on one side with HDPE on the other side with printed polyester film which is not the product before us where we have two layers of LLDPE, polyethylene each sandwiching one layer of aluminium foil. This may be so. However, there also the aluminium foil was covered by plastics. 16. In our view, in the case before us, it is difficult to ascertain whether aluminium or the plastics give essential characteristics to the imported item. In that scenario we have to rely on the Interpretative Rules 3(c) to the Customs Tariff which says that when goods cannot be classifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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