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TMI Blog1983 (8) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor was rejected for reasons which will be mentioned later. Against this order of rejection the appellants filed a revision application which now stands transferred to the Tribunal. 3. Appearing for the appellants, Shri Sogani argued the case in great detail. Before setting out his arguments, it would be useful to take note of two previous orders of the Tribunal. 4. In its order No. D171 to 178/83, dated 5-4-1983, a Bench of the Tribunal dealt with a batch of eight appeals from the present appellants. The goods in that case were described in the invoice and the relative Bills of Entry as Presspahn paper . The question in those cases was whether the goods should be considered as paper or paper-board . The lower authorities had held that it was paper-board and therefore not eligible for the concessional rate of duty under exemption Notification No. 37/78, dated 1-3-1978, which at the relevant time was applicable only to paper and not to paper-board. The Bench held that in the absence of any statutory demarcating line between paper and board either in the Tariff Schedule or in the relevant notification, they had to go by the understanding in the electrical trade and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be preferred to classification under Chapter 48. So far as the countervailing duty was concerned, it was held that in the absence of any Interpretative Rules in the Central Excise Tariff for the classification of composite articles, the classification of the goods under either Item 17 or Item 15A of the Central Excise Tariff would be inappropriate, and that for the purposes of countervailing duty they would fall under item 68 CET. 7. It has not been seriously disputed by Shri Sogani that the goods which are the subject-matter of the present proceedings are in all material respect similar to the goods imported by Messrs Yash Udyog. However, when it was pointed out to him that the Tribunal had already taken a decision on such goods in the case of Messrs Yash Udyog, Shri Sogani argued that certain relevant aspects of the matter had not been considered in that case. He submitted that if those aspects had been considered, the decision would have been in favour of the importers. He thereafter argued the present case at considerable length. 8. Since the Tribunal has had occasion to consider the classification of basically similar goods in the case of Messrs Yash Udyog, a number of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (vii) At page 570 of the Explanatory Notes, with reference to Heading Nos. 39.01 to 39.06, it has been stated that they also include plates, sheets, etc., consisting of textile fabric impregnated, coated, covered or laminated with artificial plastic materials, provided that (1) they cannot, without fracturing, be subjected to a specified process of bending, or (2) the textile fabric is completely embedded in, or coated or covered on both sides, with such material. It was Shri Sogani s contention that the goods in question would withstand the prescribed test for bending, and accordingly would be excluded from Headings 39.01 to 39.06; (viii) Shri Sogani referred to Chapter Note 1(e) to Chapter 48 of the CTA. This Note provides that the Chapter does not cover paper-reinforced stratified artificial plastic sheeting, or vulcanised fibre or articles of such materials (which are shown as falling within Chapter 39). According to him the goods in question were not hit by this provision, since the plastic material was in the form of film and not sheet; and (ix) Shri Sogani also submitted that Interpretative Rule 3(b) was applicable only in the case of composite goods where the differen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the basic duty classification ought to be under 48.01/21(1)......The dispute now is that the appellants claim benefit of Notification No. 37-Cus., dated 1-3-1978 . He has gone on to discuss the eligibility of the goods for the benefit of that notification, which on the relevant date covered only electrical grade insulation paper and not paper-board. Observing that the goods were undeniably paper-board, he held that it was not possible to give them the benefit of assessment under that notification. He concluded his order with the sentence The appeals are, therefore, rejected reluctantly. 13. We asked Shri Chandramouli whether he could elucidate the observation of the Appellate Collector to the effect that as of that day, the Custom House accepted the basic duty classification to be under Item 48.01/21(1). Shri Chandramouli was not in a position to do so. Shri Sogani, however, informed us that at that time there was a tariff advice, resulting from one of the conferences of Collectors of Customs, according to which the classification of these goods was to be under Heading 48.01/21. However, he very fairly added that this tariff advice had since been rescinded. 14. We have g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally covers the goods in question, without reference to the presence, importance and functions of the other material cannot, therefore, be accepted. 17. Since the goods are not covered by the expression composite paper or paperboard and no other tariff description has been brought to our notice which specifically covers them, it is clear that classification has to be done with reference to Interpretative Rule 3(b), relating to the classification of composite goods which consist of different materials or made up of different components. This is what was done in classifying the goods which were the subject matter of the case of Messrs. Yash Udyog, and the conclusion was that by the application of Interpretative Rule 3(b) they would be classifiable under Heading No. 39.01/06 of the CTA. It has already been observed that the goods covered by the present appeal are in all material respects similar to those in the case of Messrs Yash Udyog. 18. As regards Shri Sogani s contention that the plain meaning of the expression in the Tariff should be applied, without referring to the CCCN or the Explanatory Notes, this would no doubt have force if there was some tariff description which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d consequently its importance in the composite article, is not proportionate to its thickness in the composite article. This is precisely the position in the present case, where the composite article is meant for the specific purpose of electrical insulation, and with reference to this function the importance of the plastic material is very substantially higher than its thickness in relation to the paper/paperboard. And finally, it may be observed that the Explanatory Note incorporates a rule of thumb, which does not follow directly from the wording of the Heading. As against this, Interpretative Rule 3(b), which is a part of the Tariff, offers a clear and consistent criterion. If one has to choose between applying the relevant Interpretative Rule or relying on an Explanatory Note which has no specific basis, preference necessarily has to be given to the Interpretative Rule. 21. Shri Sogani also made reference to page 570 of the Explanatory Notes. We can only say that the application of the Note referred to by him not only appears far-feteched, but also assumes a factual position regarding the bending characteristics of the material in question, which is not on record. Further, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thing to this effect in the Order-in-Original of the Assistant Collector, which on the contrary held that the assessment under Heading No. 39.01/06 was in order. We also observed that the proceedings before the Appellate Collector were not in the nature of adversary proceedings, with a representative of the Department being present to argue the Department s case. The order shows that there was a personal hearing, at which, apart from the Appellate Collector, only the Consultant of the appellants Shri Abichandani, is recorded as having been present. While the arguments advanced by Shri Abichandani are referred to, there is no reference to any representative of the Department being present or to any arguments being advanced by him. From the record, therefore, it cannot be said that the Department had made a concession in this regard, to the effect that the classification of the goods should be under Heading No. 48.01/21(1). It appears that the Appellate Collector has introduced in the order his own knowledge of the view taken by the Custom House in some other case. Such an observation, which has no reasoning to support it, and which is not even set out as a conclusion reached by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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