2005(05)LCX0103

IN THE CESTAT, SOUTH ZONAL BENCH, BANGALORE

Dr. S.L. Peeran, Member (J) and Shri T.K. Jayaraman, Member (T)

Digital Prints & Impressions Pvt. Ltd.

Versus

Commissioner of Customs, Bangalore

Final Order No. 786/2005, dated 17-5-2005 in Appeal No. C/20/2003

Cases Quoted -

Bharat Electronics Ltd. v. Collector - 1998(06)LCX0139 Eq 1998 (102) ELT 0717 (Tribunal) - Relied on [Paras 5, 6]
Hindustan Packaging Co. Ltd. v. Collector - 1994(11)LCX0059 Eq 1995 (075) ELT 0313 (Tribunal) - Relied on [Paras 5, 6]
L.E. Industries v. Commissioner-2004(12)LCX0003 Eq 2005 (180) ELT 0409 (Tribunal) - Relied on [Paras 5, 6]
New India Industries Ltd. v. Collector -1994(08)LCX0082 Eq 1994 (073) ELT 0723 (Tribunal) - Relied on [Paras 5, 6]
PMT Machine Tool Automatics Ltd. v. Collector -1997(01)LCX0016 Eq 1997 (092) ELT 0226 (Tribunal) - Relied on [Paras 5, 6]

Advocated By -

Shri G. Shivadass, Advocate, for the Appellant.
Shri R.N. Vishwanath, SDR, for the Respondent.

[Order per: T.K. Jayaraman, Member (T)]. -

This appeal has been filed against O-I-A No. 80/2002, dated 6-11-2002, passed by the Commissioner of Central Excise (Appeals), Bangalore.
2. The appellants imported laminated paper PVC plates. The DC, lCD, classified the item under CTH 3919.30. Since the product consists of a layer of paper and a layer of plastic sheet and the thickness of paper is more than half the total thickness of the products, the appellants contended that the item could be classified under Chapter 48. The duty under Chapter 48 is Nil. The Commissioner (Appeals), upheld the classification arrived at by the Original authority on the following grounds:
3. The function of the paper is only to protect a self-adhesive nature of the plastic sheets and simply because the thickness of the paper is more, it certainly cannot be classified under CH 48. It is only stratified paper with plastics that merit classification under CH 48, provided paper constitutes more than half the total thickness. In the instant case, the product imported is stratified paper with plastics but is self-adhesive plastic sheets correctly classified under CH 39.
The appellants has strongly challenged the impugned order of the Commissioner (A).
4. Shri G. Shivadass, the learned Advocate appeared for the appellant and Shri R.N. Vishwanath, the learned SDR appeared for Revenue.
5. The learned Advocate urged the following points :
(i) The fact that the weight of the paper exceeds the weight of the plastic is not disputed by the Revenue. The Commissioner(A) acknowledges this fact in Para 2 of the impugned order.
(ii) An imported product should be classified in the condition in which it is imported. The following case laws were relied on.
- New India Industries Ltd. v. CC - 1994 (073) ELT 723
- PMT Machine Tool Automatics Ltd. v. CC -1997 (092) ELT 226
- Bharat Electronics Ltd. v. CC - 1998 (102) ELT 717
- LE Industries v. CC - 2005 (180) ELT 409
(iii) The Larger Bench of the Tribunal, in the case of Hindustan Packaging Co. Ltd. v. CCE, Vadodara - 1994(11)LCX0059 Eq 1995 (075) ELT 0313 (Tribunal), has held that classification has to be first determined according to the terms of heading and relative section and chapter notes.
(iv) In terms of Note 1(g) of Chapter 48, a product that has a layer of paper or paperboard which is coated or covered with a layer of plastics and where plastic constitutes more than half of the total thickness would not be classifiable under Chapter 48. In the present case, the weight of paper exceeds plastics by more than half the total thickness, hence, the product will remain under Chapter 48.
(v) The only ground on which both the authorities have classified the product under Chapter 39 is that the product is likely to be used in the advertisement industry and, therefore, would be classifiable under Chapter 39. The end-use of the product is irrelevant for classification, as the same has to be done on the basis of the condition of the goods at the time of import.
6. The learned SDR said that the decisions relied on by the learned Advocate are distinguishable. In all those cases, the paper was a part of the goods and was not removed before use unlike the present case. The impugned goods are finally used only as plastic films in advertisement industry. The paper is removed before use of the plastic portion. Hence, he supported the decision of the lower authorities and urged the Bench to uphold this.
7. We have gone through the records of the case carefully. We are of the view that goods should be classified in the condition in which they are imported. The case laws relied on by the learned Advocate are quite relevant. It is not disputed that in the impugned product, paper constitutes more than half the total thickness. Hence, the impugned product would not come under the exclusion in Chapter 48 Note 1(g), even though, ultimately, when the product is used, the paper is thrown away. The goods are classifiable under Chapter 48 only for reasons stated above. Hence, we set aside the OIA and allow the appeal with consequential relief.
(Pronounced in open Court on 17-5-2005)

Equivalent 2005 (188) ELT 0118 (Tri. - Bang.)

Equivalent 2006 (072) RLT 0029 (CESTAT-Ban.)