1995 (3) TMI 93 - SC - Central Excise

Headings 44.08 covers block boards as 'plywood, veneered panels and similar laminated wood'; HSN overrides ISI Glossary

SC held that block boards fall within Heading 44.08's phrase 'plywood, veneered panels and similar laminated wood' as per the HSN, so they are not to be ... Similar laminated wood - classification under HSN - Heading No. 44.08 vs Heading No. 44.10 - residuary classification - preferential use of HSN over ISI Glossary - meaning of 'similar' in tariff headingsSimilar laminated wood - Heading No. 44.08 vs Heading No. 44.10 - classification under HSN - preferential use of HSN over ISI Glossary - meaning of 'similar' in tariff headings - Block boards for the period from 28-2-1986 to 19-3-1990 fall within Heading No. 44.08 as 'similar laminated wood' and not under Heading No. 44.10. - HELD THAT: - The Central Excise Tariff Act, 1985 is based on the internationally accepted HSN nomenclature and, in case of doubt, the meaning given in the HSN explanatory notes is a safe guide. The HSN explanatory note expressly includes block board within 'similar laminated wood' by reference to its core composed of blocks surfaced with outer plies. The word 'similar' is expansive and requires resemblance, not identity, with plywood or veneered panels. The ISI Glossary, framed for a different purpose, cannot override the HSN-based meaning adopted in the Indian Tariff. Hence the expression 'similar laminated wood' as used in Heading No. 44.08 from the beginning embraces block boards of all kinds and the Tribunal's contrary approach relying on ISI definitions was incorrect. [Paras 10, 13, 19, 20]The Tribunal decision for the first period is reversed and block boards are classifiable under Heading No. 44.08.Similar laminated wood - Chapter Note 5 amendment (w.e.f. 19-3-1990) - classification under HSN - residuary classification - For the period from 20-3-1990 to 28-2-1992 block boards are to be classified under Heading No. 44.08 as 'similar laminated wood' and not under Heading No. 44.10. - HELD THAT: - Although Chapter Note 5 was amended w.e.f. 19-3-1990 to make explicit that block board is included, that amendment merely clarified what was already implicit because the Indian Tariff follows HSN, whose explanatory note already included block boards. The High Court's reliance on the absence of the words 'or otherwise joined' in the 19-3-1990 note and on ISI definitions produced an unduly narrow construction. A liberal construction of the identical heading with reference to HSN shows block boards fall within Heading No. 44.08 for the second period as well. [Paras 10, 19, 20]The High Court decision for the second period is reversed and block boards are classifiable under Heading No. 44.08.Chapter Note 5 amendment (w.e.f. 1-3-1992) - similar laminated wood - classification under HSN - For the period from 1-3-1992 onwards block boards fall within Heading No. 44.08 as 'similar laminated wood'; the High Court decision against the manufacturers is affirmed. - HELD THAT: - The further amendment to Chapter Note 5 w.e.f. 1-3-1992 enlarged the language to 'glued or otherwise joined together', removing any doubt and making it beyond controversy that block boards of all kinds are included within 'similar laminated wood'. The Court affirms the High Court's decision for this period, albeit for reasons consistent with the HSN-based construction and the clear amended note. [Paras 4, 9, 10, 20]The High Court's decision for the third period is affirmed and block boards are classifiable under Heading No. 44.08.Final Conclusion: The appeals of the revenue are allowed and the manufacturers' appeals/SLPs are dismissed: the Tribunal and High Court decisions for the first two periods are reversed while the High Court decision for the period from 1-3-1992 onwards is affirmed; block boards are classifiable under Heading No. 44.08 as 'similar laminated wood' in accordance with the HSN-based construction of the Central Excise Tariff. Issues Involved:1. Classification of 'block boards' under the Central Excise Tariff Act, 1985.2. Interpretation of Heading No. 44.08 and Heading No. 44.10.3. Applicability of amendments to Chapter Note 5 in Chapter 44.4. Reliance on ISI Glossary vs. Harmonized System of Nomenclature (HSN).Detailed Analysis:1. Classification of 'block boards' under the Central Excise Tariff Act, 1985:The primary issue in this case was whether 'block boards' should be classified under Heading No. 44.08, sub-heading No. 4408.90 as claimed by the revenue or under Heading No. 44.10, sub-heading No. 4410.90 as claimed by the manufacturers. The judgment addressed the classification for three different periods: from 28-2-1986 to 19-3-1990, from 20-3-1990 to 28-2-1992, and from 1-3-1992 onwards.2. Interpretation of Heading No. 44.08 and Heading No. 44.10:Heading No. 44.08 pertains to 'Plywood, veneered panels and similar laminated wood,' while Heading No. 44.10 pertains to 'Articles of wood not elsewhere specified.' The revenue argued that 'block board' falls under the expression 'similar laminated wood' in Heading No. 44.08, sub-heading No. 4408.90. Conversely, the manufacturers contended that 'block board' is an 'article of wood' and should fall under Heading No. 44.10, sub-heading No. 4410.90.3. Applicability of amendments to Chapter Note 5 in Chapter 44:The amendments to Chapter Note 5, effective from 19-3-1990 and 1-3-1992, were crucial in determining the classification. The first amendment clarified that 'similar laminated wood' includes block board, laminated board, and batten board. The second amendment expanded the definition to include block boards 'glued or otherwise joined together.' The court emphasized that these amendments were intended to clarify the existing classification rather than change it.4. Reliance on ISI Glossary vs. Harmonized System of Nomenclature (HSN):The manufacturers relied on the ISI Glossary of Terms to argue that block boards do not fall under 'similar laminated wood.' However, the revenue contended that the Central Excise Tariff is based on the HSN, which includes block boards within the expression 'similar laminated wood.' The court agreed with the revenue, stating that the HSN should be the guiding framework for classification under the Central Excise Tariff Act, 1985.Judgment Analysis:First Period (28-2-1986 to 19-3-1990):The Tribunal initially held that block boards fall under Heading No. 44.10, sub-heading No. 4410.90. The Supreme Court reversed this decision, stating that block boards should be classified under Heading No. 44.08, sub-heading No. 4408.90, as they fall within the expression 'similar laminated wood' according to the HSN.Second Period (20-3-1990 to 28-2-1992):For this period, the High Court had relied on the ISI Glossary and held that block boards fall under Heading No. 44.10 unless they are 'glued together.' The Supreme Court reversed this decision as well, emphasizing that the amendments to Chapter Note 5 were meant to clarify that all block boards fall under Heading No. 44.08, sub-heading No. 4408.90.Third Period (1-3-1992 onwards):The High Court had dismissed the manufacturers' writ petitions, holding that block boards fall under Heading No. 44.08, sub-heading No. 4408.90. The Supreme Court affirmed this decision, noting that the explicit wording of the amended Chapter Note 5 made it clear that block boards of all kinds fall within 'similar laminated wood.'Conclusion:The Supreme Court concluded that block boards should be classified under Heading No. 44.08, sub-heading No. 4408.90 for all three periods. The court emphasized that the amendments to Chapter Note 5 were clarificatory and that the HSN should be the guiding framework for classification under the Central Excise Tariff Act, 1985. Consequently, the appeals of the revenue were allowed, and the appeals and SLPs of the manufacturers were dismissed.