1998(06)LCX0102
IN THE CEGAT, COURT NO. III, NEW DELHI
Shri S.K. Bhatnagar, Vice President and Ms. Jyoti Balasundaram, Member (J)
TAPEX CORPORATION
Versus
COLLECTOR OF CENTRAL EXCISE, BELGAUM
Final Order No. 367/98-C, dated 5-6-1998 in Appeal No. E/1235/91-C
Cases Quoted
Chetna Polycoats (P) Ltd. v. Collector — 1988(07)LCX0042 Eq 1988 (037) ELT 0253 (Tribunal) — Followed [Paras 3, 5]
Intek Tapes Pvt. Ltd. v. Collector — 1991(08)LCX0009 Eq 1992 (059) ELT 0097 (Tribunal) — Followed [Paras 3, 5]
Tapex Corporation — SB/S/Order No. 64/91 [Para 5]
Advocated By : None, for the Appellants.
Shri S.R. Hassan, SDR, for the Respondents.
[Order per : S.K. Bhatnagar, Vice President]. - This is an appeal filed with reference to the order of Collector of Central Excise (Appeals), Bangalore dated 22-11-1990.
2. The appellants have sent a letter dated 11-3-1997 requesting for a decision on merits. Accordingly, we have perused the papers and heard learned DR.
3. The appellants have stated in their written submissions that they are manufacturer of self-adhesive electrical insulating tapes of plastics. The department during the material period has contended that it is classifiable under Chapter sub-heading 3919.00 as against their contention that it falls under Chapter Heading 8546.00. In support of their contention, they relied on the decision of the Tribunal in the case of Chetna Polycoats (P) Ltd. reported in 1988 (037) ELT 253 and in the case of Intek Tapes Pvt. Ltd. reported in 1991(08)LCX0009 Eq 1992 (059) ELT 0097 (Tribunal). The Collector of Central Excise, Belgaum issued Trade Notice No. 78/91, dated 5-9-1991 wherein it is clarified that self-adhesive electrical insulating tapes of plastics are appropriately classifiable under Chapter Heading 8546.00 and the same is strictly followed. During the material period and afterwards, there is no change in the tariff description of the Chapter Heading 8546.00 and there is no change in the process of manufacture of the said goods. They would therefore pray that the goods be classified under Chapter Heading 8546.00.
4. Learned DR stated that the appellants are manufacturing electrical insulation tapes for which the base materials are plastics (PVC), cotton fabrics and hessain. Some of the electrical insulation tapes are self-adhesive and some are not. The electrical insulation tapes are marketed in the form of rolls. The appellants had filed a classification list effective from 1-3-1998 classifying the electrical insulation tapes both self-adhesive and non self-adhesive under sub-heading No. 8546.00 irrespective of the base materials used for such tapes. The classification list was duly approved by the A.C. However, the Collector had issued a Trade Notice No. 79/88, dated 23-5-1988 to the effect that self-adhesive insulation tapes of plastics would be classifiable under sub-heading No. 3919.00 and the appellants were asked to file a revised classification list. Consequent upon the approval of the revised classification list, the Supdt. issued a show cause notice to the appellants on 22-7-1988. The appellants replied that the self-adhesive electrical insulation tapes merit classification only under sub-heading No. 8546.00 since this sub-heading covers electrical insulators of any material, that the main property of the said tape is electrical insulation and the self-adhesiveness property is only incidental and as such, it cannot be classified under sub-heading No. 3919.00 The A.C. rejected the contention of the appellants on the ground that self-adhesive electrical insulation tapes do not have a special shape or construction or size for use as insulators and hence, such tapes are classifiable only under sub-heading No. 3919.00 The Collector (Appeals) rejected the appeal on the main ground that self-adhesive electrical insulation tapes of PVC do not have a special shape or construction or size for use as insulators to merit classification under sub-heading No. 8546.00.
5. We have considered the above submissions. We observe that it is a common knowledge that a variety of tapes of different types are available in the market and these include self-adhesive tapes of plastics. In the present case, the appellants had submitted before the authorities below that the type of tapes being manufactured by them are electrical insulating tapes which are being marketed in the form of rolls and that their self-adhesive property is only incidental. The departmental authorities had, however, not accepted their contention on the ground that they do not have any special shapes or size for use in insulators. But, the basis of such a finding has not been indicated in the order-in-original. In the order-in-appeal, learned Collector (Appeals) has referred to Heading 3919.00 which covers self-adhesive tapes of plastics and held that electrical insulation tapes would also appear to be covered under this heading. He has also drawn attention to Chapter Note 2(n) of Chapter 39 which excludes articles of Section XVI and further mentioned that Heading 8546.00 covers electrical insulators of any material and that HSN indicates the types of insulators which would merit classification under that heading. On the basis of illustrations given in the HSN, the learned Collector (Appeals) had come to the conclusion that all such insulators have some special shape or construction or size for use as insulators and the self-adhesive electrical insulation tapes of plastics which are generally in roll form would not appear to be of the type covered by [Heading] 8546.00. A reading of the Heading 85.46 of HSN and the explanatory notes indicated thereunder go to show that the learned Collector has rightly taken note thereof and his reasoning would prima facie appear to have some force. However, insofar as Central Excise Tariff is concerned, Heading 39.19 which includes self-adhesive tapes and 85.46 covers electrical insulators of any material and therefore, where we have got an item which could be classified under any of the two headings, the rules of interpretation come into force and it is the later in the serial order which is required to be given preference. Furthermore, it is not denied by the department that in the instant case, the tapes in question were of a variety which had electrical insulating properties. In the cases referred to by the appellants, the Tribunal has laid greater emphasis on this aspect and in the case of Chetna Polycoats (P) Ltd. reported in 1988 (037) ELT 253 noted that such tapes were not treated commercially as self- adhesive tapes but, as electrical insulating tapes and they are used as such. This order of the Tribunal has since been followed in a series of cases including Intek Tapes Pvt. Ltd. v. Collector of Central Excise reported in 1991(08)LCX0009 Eq 1992 (059) ELT 0097 (Tribunal) and M/s Tapex Corporation vide SB/S/Order No. 64/1991. The Board itself has also since come round to the trade view that self-adhesive electrical insulating tapes of plastics were classifiable under Heading 8546.00 as apparent from the Trade Notice No. 78/91 issued by Belgaum Collectorate. Therefore, the controversy appears to have ceased and we are required to follow the case law cited before us. Hence, the impugned orders are set aside and the appeal accepted, as already announced in the open Court.
_______
Equivalent 1998 (103) ELT 580 (Tribunal)