Composite imported stencil tissue classified under residuary tariff entry, securing countervailing duty exemption and refund.

Imported special coated tissue for stencils was treated as a composite product of plastic film and paper backing, with both components performing a functional role. It was not regarded as an article of paper or an article of plastic for Central Excise Tariff purposes. The Customs Tariff interpretative rule applied in the proceedings was held not to govern classification under the Central Excise Tariff, which contained no corresponding provision. The goods therefore fell under the residuary Item 68 rather than Item 17(2), and that classification brought them within the exemption from countervailing duty, making refund of the duty admissible.

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Issues: Whether the imported goods described as special coated tissue for stencils were classifiable for countervailing duty purposes under Item 17(2) of the Central Excise Tariff or under the residuary Item 68, and whether refund of countervailing duty was admissible.

Analysis: The goods were found, on examination of the sample and test report, to be neither an article of paper nor an article of plastic, but a composite product consisting of plastic film and paper backing, both of which performed a functional role in the use of the goods. The Customs Tariff interpretative rule relied on in the proceedings was held to govern classification under the Customs Tariff, but not under the Central Excise Tariff, which contained no corresponding provision. As the goods were not specifically covered by any entry in the Central Excise Tariff, they were held to fall under the residuary Item 68. By reason of that classification, they were covered by the exemption from countervailing duty under Notification No. 364-Customs dated 2-8-1976.

Conclusion: The goods were classifiable under Item 68 of the Central Excise Tariff and not under Item 17(2), and the appellants were entitled to refund of countervailing duty.

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