Classification of mica sheets: CESTAT leans towards appellant's argument, refers to Larger Bench

The Appellate Tribunal CESTAT, New Delhi considered the correct classification of mica sheets produced by the appellant. While the Revenue argued for classification under Heading 85.46 (electrical insulators), the appellant contended that the sheets should be classified under Chapter 68. The Tribunal leaned towards the appellant's argument but referred the matter to a Larger Bench due to a previous conflicting decision. The registry was instructed to present the case for constitution of a Larger Bench by the Hon'ble President. Member (T) C.N.B. Nair pronounced the decision in open court.

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Issues:
1. Correct classification of mica sheets produced by the appellant - whether under sub-heading 6807.00 (articles of mica) or Heading 85.46 (electrical insulators).

Analysis:
The appeal before the Appellate Tribunal CESTAT, New Delhi involved the issue of the correct classification of various sheets of mica produced by the appellant. The Deputy Commissioner and the Commissioner (Appeals) had classified the mica sheets under sub-heading 6807.00 (articles of mica), while the Revenue contended that the correct classification should be under Heading 85.46 (electrical insulators). During the hearing, the learned JDR referred to a previous decision of the Tribunal in the case of C.C.E., Aurangabad v. Isovolta (I) Pvt. Ltd., where it was held that mica strip should be classified under Heading 85.46. However, the counsel for the assessee argued that Heading 85.46 was inappropriate as per the relevant tariff headings and pointed to the HSN Note to Chapter 68, suggesting that mica in different forms should be classified under 68.01. The counsel further contended that the items cleared from the factory were only mica sheets, and additional manufacturing was required to turn them into insulators.

The Tribunal was inclined to agree with the assessee's contention regarding the classification of the mica sheets. However, due to a previous contradictory decision by a co-ordinate Bench [2001 (129) E.L.T. 642], the matter was deemed necessary to be referred to a Larger Bench for clarification. Consequently, the registry was directed to place the matter before the Hon'ble President for the constitution of a Larger Bench. The decision was dictated and pronounced in open court by the Member (T) C.N.B. Nair.

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