TaxTMI 
TaxTMI 
1997 (3) TMI 598
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....of the Collector of Central Excise, raise common questions regarding the classification of laminated sheets. There varieties of laminated sheets are involved in these appeals: (1) Decorative laminated sheets; (2) Industrial laminated sheets which are paper based and; (3) Glass Epoxy laminated sheets. The manufacturing process of decorative laminated sheets has been described by the manufacturers. Paper is passed through or immersed in a resin bath (phenol formaldehyde resin) so that the paper is impregnated with resin. This paper is then dried. At this stage the paper which is impregnated with resin is known as 'Prepreg - P' ('P' stands for paper). Layers of Prepreg paper are then stacked. The top layer consists of paper which has a decorative design on it an which is impregnated with resin. The sheets of papers so stacked are then pressed together in a hydraulic press applying pressure and heat to make a laminated sheet. In the process, the resin passes through the pores of paper and acts as a binder. The end product is a hard rigid sheet which is impact resistent and is unaffected by hear or moisture. These decorative laminated sheets are sold in the market ....
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....oods, not elsewhere specified, Twelve per but excluding- cent ad valorem (a) Alcohol, all sorts, including alcoholic liquors for human consumption; (b) Opium, Indian hemp and other narcotic drugs and narcotics; and (c) dutiable goods as defined in section 2(c) of the Medical and Toilet Preparations (Excise Duties) Act, 1955 (16 of 1955). Explanation:- For the purpose of this item, goods which are referred to in any preceding item in this Schedule for the purpose of excluding such goods from the description of goods in that item (whether such exclusion is by means of an Explanation to such item or by words of exclusion in the description itself or in any other manner) shall be deemed to be goods not specified in that item." According to the Excise Authorities, all these laminated sheets which are manufactured by the respondents are sheets of plastic material falling under Tariff Entry 15A(2) of the Old Tariff. The manufacturers, on the other hand, contend that the laminated sheets cannot be considered as sheets of plastic material. The sheets are made up of composite material consisting of either paper or glass fabric as also resins. Hence these sheets are not covered....
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....y 15A(2) as applicable here, also refers to plastic material in different shapes and forms. This entry does not deal with a composite commodity which may consist of plastics or materials described in sub-item (1) of Entry 15A, combined with other material. Therefore, the ratio of this Court's decision in the case of Geep Flashlight Industries Ltd. (supra) applies directly to Entry 15A(2) as applicable here. A composite material such as we have to consider, will not be covered by Entry 15A(2). In the case of Wiltech India Ltd. v. C.C.E. (1996 [84] ELT p.5 SC), this Court held that a razor made of plastic with an iron rod would fall under Tariff Item 68. Razors which are not wholly made of plastic would not qualify for exemption under Notification No. 182/82-CE. As laminated sheets are not made wholly of material described in Entry 15A(1), the CEGAT has rightly held that under the Old Tariff, laminated sheets in question cannot be classified under Tariff Entry 15A(2). They are to be classified under the residuary Entry 68. NEW TARIFF: After the coming into force of the Central Excise TARIFF Act of 1985, however, the tariff entries have undergone substantial change. Accor....
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....ed basis of the structure of the Central Excise Tariff in the 1985 Act and the tariff classification made therein. In case of any doubt, the HSN is a safe guide for ascertaining the true meaning of any expression used in the Act. In addition the New Tariff Act has specifically laid down Rules of Interpretation which govern the interpretation of various entries in it. Each chapter in the New Tariff Act further contains its own Notes which are relevant for the interpretation of entries forming part of that chapter. Tariff Entry 3920.31 is in Chapter 39. Chapter 39 deals with "Plastics and Articles thereof". Note 1 to Chapter 39 is as follows:- "Note 1: Throughout his Schedule, the expression plastics means those materials of heading Nos. 39.01 to 39.14 which are or have been capable, either at the moment of polymerisation or at some subsequent stage, of being formed under external influence (usually heat and pressure, if necessary with a solvent or plasticiser) by moulding, casting, extruding, rolling or other process into shapes which are retained on the removal of the external influence. Throughout this Schedule, any reference to 'plastic' also includes vulcanised fi....
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....or of Paperboard". The relevant entries, according to the manufacturers, are 4818.90/4823.90. Note 1(f) to Chapter 48 is as follows: "Note (1): This chapter does not cover: (a)..... ........ (f); Paper reinforced stratified plastic sheeting, or one layer of paper or paperboard coated or covered with a layer of plastics, the latter constituting more than held the total thickness, or articles of such materials, other than wall coverings of heading No. 48 14(Chapter 39)." The manufacturers have placed emphasis on this note. This note, however, will not have any application in the present case. In the first place the note refers to paper- reinforced stratified plastic sheeting or one layer of paper coated or covered with a layer of plastics. the process of manufacture of laminated sheets which is described earlier is totally different. It requires impregnation of paper with resins, drying it to produce prepeg and then pressing layers of prepeg under a hydraulic press, Therefore, simply because paper content is higher than resin content, note 1(f) does not become applicable. Entry 4818 is as follows; Heading No. Sub-heading No Description of goods Rate of duty 4818 ....
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....ings providing a more general description... (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component of the material or component which gives them their essential character, insofar as this criterion is applicable. (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in the numerical order among those which equally merit consideration." [underlining ours] Rule 1 does not help to classify the goods in the present case because Note 1(f) in Chapter 48 is not applicable to these goods. The other relevant rule of interpretation is Rule 3(b) which provides that mixtures or composite goods consisting of different materials which cannot be classified with reference to Rule 3(a) as n the present case, are to be classified as if they consisted of the material or component which gives them their essential character. in the present case, the essential character of a decorative laminated sheet is its rigidity or strength and it....
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....electrical machinery and equipment and parts thereof. Entry 8546 deals with "electrical insulators of any material". There is, therefore, a specific entry in the New Tariff Act dealing with electrical insulator of any material. Under chapter 39 which deals with plastics and articles thereof, chapter Note 2 (n) which is set out earlier, provides that this chapter does not cover articles of Section XVI. Therefore, industrial laminates and glass epoxy laminates which are used for electrical insulation will not fall under Chapter 39 but will fall under Chapter 85 under Entry 8546.00 (Entry 7014 under the New Tariff Act prior to 1.3.1988). It is the contention of the Central Excise Department that industrial laminates and glass epoxy laminates cannot be considered as electrical insulators because these sheets are required to be cut in the requisite shape and holes may have to be punched in them before they could be fitted as insulators. However, mere cutting or punching holes does not amount to manufacture. These sheets have insulating properties and are used as electrical insulators. They cannot be taken out of the category of electrical insulators only because they have to be cut t....