Classification of electrical insulating paper favours Chapter 48 because insulating use alone does not make it an insulator.

Electrical grade insulating paper was treated as paper, not as paper-based laminated sheets or insulators. The classification turned on the distinction between insulating material and insulators: mere insulating properties or use for electrical purposes did not convert the goods into insulators. Relying on the relevant IS specification and the tariff entry for insulating paper in Chapter 48, the goods were classified as special insulating paper under Chapter 48 rather than under Heading 85.46 as insulators, and the assessee succeeded.

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Issues: Whether electrical grade insulating paper is classifiable as special paper under Chapter 48 of the Central Excise Tariff Act, 1985 or as insulators under Heading 85.46 of the Central Excise Tariff Act, 1985.

Analysis: The goods were found to be paper itself and not paper-based laminated sheets or paper-based insulators. Decisions dealing with paper-based products were held inapplicable for that reason. The relevant IS specification described the product as special paper, and the distinction between insulating material and insulators was emphasised. It was held that mere insulating properties or use for electrical purposes does not make the goods insulators. Support was also drawn from prior notifications and the specific tariff entry for insulating paper under Chapter 48.

Conclusion: The goods are classifiable under Chapter 48 as special insulating paper and not under Heading 85.46 as insulators; the assessee succeeds.

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