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TMI Blog2010 (6) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... sp;The dispute in the matter relates to classification of the product manufactured by the appellants. While it was the contention of the appellants that the product was classifiable under sub-heading 7607.90, the department contended that it was classifiable under 39.20 of Central Excise and Tariff Act. 3. The appellants were inter alia engaged in the manufacture of polyester/BOPP films in their films division. The polyester/BOPP films were either cleared as finished goods on payment of duty or were used for further manufacture wherein various activities like printing, lacquering, metallising etc. were undertaken. The appellants also had a converting division wherein they were manufacturing rigid polyester film flexible BOPP/plastic films in roll or sheet form which were either coated or metallised or laminated or printed. In respect of the above goods manufactured by them, the appellants were classifying the same under Chapter 39 and the same were cleared on payment of the duty. 4. The appellants started manufacturing aluminium foil laminated on both sides with plastic with effect from December, 1996. The appellants filed necessary classification declaration dated19-11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11-1996 and annexures attached thereto, he submitted that same clearly disclosed that the appellants had clarified to the department that the submission of such declaration was necessitated on account of the fact that the appellants had started manufacturing aluminium foil classifiable under sub-heading 7607.90. Further drawing our attention to annexure A of the said declaration, he submitted that same disclosed the manufacturing process of aluminium foil and it clearly revealed that the main raw material which was used for manufacture of the product, was polyester films which was printed in multi colours with the help of Roto Gravure Printing machines and then printed polyester film was then laminated with metallised polyester film/metallised BOPP film/aluminium foil/paper, flexible coated, lacquered etc. depending upon the requirement of final product required by the customers and the product was further laminated/coated with polyethelene to impart heat sealing properties. He further submitted that the fact that the product in question was aluminium foil coated on both sides was already known to the department pursuant to the stock inspection taken by the department on 27-2-99 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L.T. 101]; Indian Aluminium Co. Ltd. v. CCE reported in [2001 (133) E.L.T. 759]; Champion Packaging Industries Pvt. Ltd. v. CCE reported in [2005 (179) E.L.T. 205]; and Shriniwas Synthetic Packers Pvt. Ltd. v. CCE reported in [2003 (158) E.L.T. 729], learned Advocate submitted that consistent view taken in relation to the product in question was that the same was classifiable under Chapter 39 and considering the same also there was no case even for initiating any proceeding against the appellants and taking into consideration the same aspect of the matter, it cannot be said that there was suppression of facts as such by the appellants so as to justify invokation of extended period of limitation. 8. The learned DR on the other hand, submitted that the declaration submitted by the appellants did not disclose correct description of the product and, therefore, till the date of inspection of the premises by the department in July, 1999, the department had no knowledge of detailed description of the product manufactured by the appellants. The fact that the product in question was coated by the plastic on both sides was not disclosed by the appellants in the declaration filed in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he products prescribed in above quoted two entries, theApex Courtin Sharp Industries case held thus : "Tariff Heading 39 is thus the specific heading which covers such products. This entry covers plates, sheets, film, foil and strip of plastics, non-cellular, whether lacquered or metalised or laminated. From the test reports, it is clear that plastic predominates in the product. 70-80% of the product consists, of plastic. There is no denial of this fact. Tariff Entry 76.07 only deals with aluminium foils which are backed with paper, paperboard, plastic or similar other backing material. In this case, the product is not just backed. It is coated with other material on both sides. The term "backed" necessarily means that the coating can only be on one side. An aluminium foil which is covered on both sides, by different materials, cannot be said to be backed. The aluminium foil is in such cases sandwiched between other materials. It is clear that there can never be backing on both sides. Chapter Note (d) of Chapter 76 also makes it clear that Tariff Heading 76.07 will not apply to products which assume the character of articles or products of other headings. In this case, since plast ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this regard was delivered in the year 2005, it cannot be said that the appellants in 1996 could have presumed that the term 'backed' could include covering on both sides of the product. The decision merely reiterate the generic meaning of the word used in the tariff statute. It is difficult to accept the contention on behalf of the appellants that in 1996, the statement of the appellants that the product was backed by plastic could not be stated to have been mis-statement inspite of the fact that the product manufactured by the appellants was in the nature of coating of plastic on both sides of the product. Certainly to that extent, in our considered opinion, there was no clear description disclosed in the declaration filed by the appellants. 12. As regards the stock taking proceedings in February, 1997 are concerned, it is true that such a report dated 27-2-97 refers to various items which were found in stock as per RG I register in the premises of the appellants, and the same included the Aluminium Foil laminates (backed) with paper/plastic classifiable under sub-heading 7607.90 and about 1105.870 Kgs as closing balance. The contention of the learned advocate for the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any Ltd. had held that the said product was classifiable under chapter 76. However, while holding so, the Larger Bench of the Tribunal has clearly ruled that the production of disputed product involve printing to paper followed by coating of the printed side with polyethelene and laminating of the other side with a combination consisting of aluminium foil sandwiched between two layers of polyethylene. It was also held that product could also be described as consisting of Aluminium foil reinforced with plastic material and backed with paper or paper board. In other words, in order to claim the classification under Chapter 76, it was necessary that the product should have been sandwiched between the coatings on either side. Undoubtedly, the fact that product of the appellants was sandwiched by plastic coat on either side was not revealed in the declaration as already stated above. Being so, even assuming that there was decision which could have justified the classification under heading 7607, it required detailed description of sandwiching of product on both sides by coating of plastics, which fact was not revealed in the declaration. To what extent, such non-declaration of the corre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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