Custom, Excise & Service Tax Tribunal
) M/S. Itc Ltd vs Commissioner Of Central Excise, ... on 21 May, 2009
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EAST ZONAL BENCH:KOLKATA
1) EXCISE APPEAL NO.ESM-310/05
AND
2) EXCISE APPEAL NO.EDM-384/05
(ARISING OUT OF ORDER-IN-APPEAL NO.60/KOL-IV/2005 DATED 26.04.05 PASSED BY COMMISSIONER OF CENTRAL EXCISE (APPEAL-I), KOLKATA)
FOR APPROVAL AND SIGNATURE
SHRI S.S.KANG, HONBLE VICE-PRESIDENT
DR. CHITTARANJAN SATAPATHY, HONBLE TECHNICAL MEMBER
1. Whether Press Reporters may be allowed to see
the Order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the
CESTAT(Procedure) Rules, 1982 for publication in any
Authorative report or not?
3. Whether Their Lordships wish to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
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1) M/S. ITC LTD.
PAPER BOARDS AND SPECIALITY PAPERS DIVISION APPELLANT ASSESSEE VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA-IV RESPONDENT COMMISSIONER AND
2) COMMISSIONER OF CENTRAL EXCISE, KOLKATA-IV APPELLANT COMMISSIONER VERSUS M/S. ITC LTD.
UNIT-TRIBENI P.O.CHANDRAHATI ...RESPONDENT ASSESSEE APPEARANCE:
SHRI J.P.KHAITAN, SR. ADVOCATE FOR THE APPLICANT ASSESSEE AND RESPONDENTS SHRI J.A.KHAN, S.D.R. FOR THE REVENUE CORAM:
SHRI S.S.KANG, HONBLE VICE PRESIDENT DR. CHITTARANJAN SATAPATHY, HONBLE TECHNICAL MEMBER DATE OF HEARING/DECISION: 21.05.09 ORDER NO Per Dr. Chittaranjan Satapathy Heard both sides.
2. These two Appeals have been filed by the Appellant Assessee and the Department against the same impugned Order and hence, both are taken together for hearing and decision.
3. The Appellant Assessee is seeking classification of the impugned goods as insulating paper falling under Sub-Heading No.4823.90, whereas the Department is seeking to classify the same as electrical insulators falling under Heading No.85.46 of Central Excise Tariff Act, 1985.
4. Shri J.P.Khaitan, learned Senior Advocate appearing for the Appellant Assessee argues :-
(i) that the impugned goods are nothing but special papers which are supplied in reels and are manufactured from cellulosic pulp. In the manufacture of such paper, the water used is deionized to ensure higher insulating property;
(ii) that the impugned goods satisfy the Indian Standard:9335 which prescribes specification for cellulosic paper for electrical purposes;
(iii) that under Government of India, Notification No.64/88-CE dated 01.03.88, the classification for electrical grade insulating paper was indicated under Chapter 48;
(iv) that the Government of India had also issued exemption Notification No.204/88-CE under Section 11C for electrical grade insulating paper for the period, 28.02.86 to 28.02.87, showing classification of the same under Sub-Heading No.4817.90;
(v) that under the 8-digit tariff introduced subsequently, insulating paper is specifically classified under Sub-Heading 48103910;
(vi) that in commercial parlance, the impugned goods are known as insulating paper as recorded in the Order-in-Original.
The learned Sr. Advocate states that from the above, it is clear that the classification of insulating paper has to be made under Chapter 48 and not under Heading 85.46 which includes insulators. He also states that Indian Standard prescribed for the impugned goods also describes such goods as a category of special paper.
5. The learned S.D.R., Shri J.A.Khan appearing for the Department argues that the impugned goods are used for insulation purposes and hence, they are required to be classified under Chapter 85 as insulators. To support the Departments case, he cites decision of the Honble Supreme Court in the case of CCE vs. Wood Polymers Ltd. 1998(97) ELT 193 (SC) and also Tribunals decision in the case of CCE, Aurangabad vs. Beico Electrical Insulators P. Ltd. 1998(104) ELT 523 (Tribunal). He states that similar goods have been ordered to be classified under Chapter 85 by both these decisions and hence, in the present case, the impugned goods should also be classified under Chapter 85 as insulators.
6. After hearing both sides and perusal of the relevant IS Specifications, cited case laws and the relevant tariff entries, we find that the impugned goods are a kind of special paper. The product which was dealt with by the Honble Supreme Court in the case of Wood Polymers (supra) was paper based laminated sheets and paper based insulators of electrical grade. In the present case, the impugned goods are not paper based product but paper itself. Hence, in our considered view, the Honble Supreme Courts decision in the case of Wood Polymers (supra) is not applicable to the present case. As regards the Tribunals decision in the case of Beico Electrical Insulators P. Ltd., we find that the said decision has been set aside by the Honble Supreme Court, vide 1999 (111) ELT A-197, as pointed out by the learned Senior Counsel. Moreover, in the said case, the product in question was film backed electrical grade insulating paper; but in the present case, as stated earlier, we are not dealing with any paper based product, but the paper itself. Further, we find that the decision of the Tribunal in Beico Electrical Insulators P. Ltd. (supra) relied upon the decision of the Honble Supreme Court in the case of Collector v. Bakelite Hylam Ltd. 1997(91) ELT 13(SC). In paragragh 3 of the said decision of the Honble Supreme Court, it was clearly pointed out that the product in the said case was industrial laminates which were paper based and in the manufacture of which, electrical grade kraft paper was used. Hence, we find that the cited decisions relate to paper based products, whereas we are dealing with the classification of the paper itself.
7. The fact that the relevant IS Specification describes the impugned goods as a kind of special paper, definitely has a bearing on its classification. No doubt, such special paper, because of its property may find use for electrical purposes including insulation. It has been clarified on behalf of the Appellant Assessee that the impugned paper in question is indeed used for insulation purposes and for making insulators. In our view, a distinction has to be made between insulating material and insulators. Just because special papers in question have insulating properties and are capable of being used as insulating material, these cannot be classified as insulators. We also find that only insulators are excluded from being classified under Chapter 48 as per the Explanatory Notes to the HSN but not insulating material. Moreover, the cited Notification No.64/88-CE dated 1.3.88 and Notification No.204/88-CE dated 13.12.88 - both issued by the Government of India earlier, have classified such paper under Chapter 48. As pointed out by the learned Senior Counsel, the subsequent 8-digit tariff also has a special entry under Sub-Heading 48103910 for such insulating paper under Chapter 48.
8. Hence, we have no doubt in our mind that the impugned insulating paper of electrical grade is a kind of special paper which merits classification under Chapter 48, as claimed by the Appellant Assessee and not as insulator under Chapter 85. Hence, the impugned Order is set aside and the Appeal of the Appellant Assessee is allowed with consequential benefit.
9. As we are allowing the Appeal of the Appellant Assessee classifying the impugned goods under Chapter 48, the Departments Appeal challenging the relief partly allowed by the Appellate Authority on the ground of limitation etc. does not survive and the same is dismissed.
Operative part of the Order pronounced in the court on 21.05.09.
Sd/- Sd/-22.05.09
(S.S.KANG) (CHITTARANJAN SATAPATHY)
VICE-PRESIDENT TECHNICAL MEMBER
DUTTA/
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EX.APPs.ESM-310/05 AND EDM-384/05