Customs, Excise and Gold Tribunal - Delhi
Crompton Greaves Ltd. vs Collector Of Customs on 18 February, 1981
Equivalent citations: 1989(43)ELT788(TRI-DEL)
ORDER Harish Chander, Member (J)
1. M/s Crompton Greaves Ltd. Bombay had filed a Revision Application to the Joint Secretary, Government of India, Ministry of Finance, Department of Revenue, New Delhi being aggrieved from Order No. S/49/2023/81R dated 18-12-1981 passed by the Appellate Collector of Customs, Bombay. After coming into existence of the Tribunal the said revision application stands transferred to the Tribunal under Section 131B of the Customs Act, 1962 to be disposed of as an appeal.
2. Briefly the facts of the case are that the Appellant had imported 'grey Presspan + MIL Polyester Film insulating material and had claimed that the same was assessable under Item 48.01/21(1) of the CTA 1975 for the purpose of basic duty and under Item 17(2) of Central Excise Tariff for the purpose of c.v. duty. The Appellant's contention was rejected. The Appellant had also contested the levy of additional duty of Customs under Item 15A(2) of the Central Excise Tariff on the grounds that the polyester film has been introduced as Item 15BB in the Central Excise Tariff; in the Finance Bill of 1981. The effective rate of duty on polyester film being 30% vide Notification No. 26/81-C.E., dated 1-3-1981, polyester film is excluded from the scope of Item 15A(2) of C.E. Tariff. The learned Assistant Collector of Customs, did not accept the contention of the Appellant's and had held that the imported goods fall within the definition of Item 15A(2) of the Central Excise Tariff viz. Articles made of plastic all sorts including tubes, rods, sheets, foils, sticks, other rectangular or profile shapes, whether laminated or not whether rigid or flexible etc. The laminated sheets, foils etc. of the plastics etc. thus continue to fall under Item 15A(2) of the Central Excise Tariff. He had further held that only Polyester film if imported separately and without any laminating component would fall under Item 15BB. He had held that the imported goods were to be assessed under Item 39.01/06 of CTA 75 and the additional duty of customs be charged under Item 15A(2) of Central Excise Tariff. Being aggrieved from the aforesaid Order the Appellant had filed an Appeal to the Learned Appellate Collector of Customs, Bombay. The learned Appellate Collector of Customs had confirmed the findings of the lower authority and had rejected the Appeal. Being aggrieved from the aforesaid Order the Appellant has come in Appeal before this Court.
3. Shri D.T. Marfatia, Secretary of the Appellant's Company has appeared. He has reiterated the facts and has pleaded that the Appellant is the manufacturer of fans and the imported paper is used as insulator. He has further pleaded that imported paper contain 10 Mil paper and 1 Mil of plastic. He has referred to a judgment of the CEGAT in the case of Mahakali Plastic Weave Pvt. Ltd., Bombay v. Collector of Central Excise, Bombay reported in 1983 (14) E.L.T. 2064 (CEGAT) wherein the Tribunal had held that "paper board" and all other kinds of paper cannot be held to include a product in which as much as 2/3rd of total weight is made up of material other than paper. He has pleaded in view of the judgment of the CEGAT cited by him, classification will tilt in favour of the material which is more (weight wise) he has pleaded that the dielectric strength of polyester is much higher than the pure press papers and hence gives better insulation properties to combination. He has pleaded that the imported item falls in Tariff Item 48.01/21(1) of CTA 1975 and not in Tariff Item 39.01/06 of CTA, 75. He has pleaded that the imported item is a composite paper and has referred to another judgment of CEGAT in the case of Sunrise Electric Corporation, Bombay v. The Collector of Customs, Bombay reported in 1983 (14) E.L.T. 2465 (CEGAT) . He has further stated that the Tribunal had held in the said case that the scope of expression "composite paper or paper board" is limited to articles composed of different/or varieties of layers paper and paper board it does not apply to composite articles containing only paper or paper board. He has also referred to Rule 3(b) of the rules for interpretation of Schedule I of the Customs Tariff Act, 1975. He has pleaded that the mixtures composite goods which consists of different materials or made up of different components whch cannot be classified by reference to Sub-rule (a) of Rule 3 shall be classified as if they consisted of the material or component which gives the goods their essential character in so far as this criterion is applicable. He has pleaded for the acceptance of the appeal.
4. In reply Shri A. Sundara Rajan, JDR has placed that the Revenue Authorities had correctly classified the imported item. He has referred to a judgement of the CEGAT in the case of Collector of Customs v. Wash Udyog Sawantwadi, Bombay reported in 1987(31) E.L.T.73 (Tribunal) wherein it was held by the Tribunal that Class 'E' and other high temperature insulating paper imported by the Appellant was assessable under Headings 39.01/06 CTA read with TI/17(2) CET. It was further held that the essential characteristic just came from the plastic portion and as such it was classifiable as Headings 39.01/06. He has further referred to the judgement of the CEGAT in the case of 1984 (17) ELT 187 in the case of Collector of Central Excise, Hyderabad v. Uma Laminated Products Pvt. Ltd. wherein it was held that Polyethylene coated sandwitched paper were liable to duty under tariff item 17(2). He has further pleaded that all the judgments of the CEGAT have been accepted and the other party has not gone in appeal. He has pleaded for the dismissal of the appeal. In reply Shri D.T. Marfatia has again requested for the acceptance of the appeal.
5. After hearing both the sides and going through the facts and circumstances of the case we hold that the Appellants case is fully covered by the judgement of the CEGAT in the case of Sunrise Electrical Corporation, Bombay v. Collector of Customs, Bombay reported in 1983 (14) E.L.T. 2465 (CEGAT) = 1983 1762D. The Appellants had imported paper and it contains 10 mil of paper and 1 mil of plastic. Thus the content of paper is much more and the contents of plastic is negligible in the case of Sunrise Electrical Corporation v. Collector of Customs, Bombay reported in 1983 (14) E.L.T. 2465 (CEGAT) .
6. In para No. 23 of the said judgement it was observed by the Tribunal that "the complete article may, as in this case, be made up of two materials both of which have like functions, but one of which possesses essential quality in a much higher degree than the other. Interpretative Rule 3(b) plainly means that in such a case it is the second material which gives to the composite article its essential character. In the instant case the plastic coating on paper possesses the essential quality of insulation in a much higher degree and as such it is classifiable under heading No. 39.01706 CTA 75 for the levy of basic customs duty.
7. Regarding the countervailing duty we would like to observe that in para No. (d) of the main grounds of appeal mentioned in the memorandum of the Appeal (Revision Application) the Appellant had contended that for the classification of the goods for the purpose of CV duty the same falls under the Tariff Item 68. In the earlier judgement of the CEGAT in the case of Sunrise Electric Corporation, Bombay v. The Collector of Customs, Bombay reported in 1983 (14) E.L.T. 2465 (CEGAT) = 1983 ECT 1762 and Solar Electric Company, Bombay v. Collector of Customs, Bombay in Appeal No. CD(SB)/T/274/81C vide Order No. 371/85 dated 18.5.85 it was held that Tariff Item 68 is the appropriate heading in the Central Excise Tariff Schedule. Accordingly we hold that the imported item for the countervailing duty falls under tariff item 68 of the Central Excise Tariff. We would also like to observe that the Appellate Court of Customs was not correct in considering the arguments of the Appellant that for the countervailing duty purpose the same was classifiable under tariff item 68 as the Appellant had not raised this issue earlier. In the result the Appeal is partly allowed, the lower authorities are directed to give the consequential relief.