1993(03)LCX0074
IN THE CEGAT, SPECIAL BENCH `C, NEW DELHI
S/Shri K.S. Venkataramani, Member (T) and G.A. Brahma Deva, Member (J)
COLLECTOR OF CUSTOMS, CALCUTTA-I
Versus
UNION CARBIDE INDIA LTD.
Final Order No. 81/93-C, dated 16-3-1993 in C/Appeal No. 2357/91-C
Cases Quoted
Union Carbide India Ltd. v. Collector 1983(07)LCX0050 Eq 1983 (014) ELT 2443 (Tribunal) [Paras 2, 3]
Amit Polymers & Compositors v. Collector 1988(11)LCX0053 Eq 1989 (039) ELT 0674 (Tribunal) [Paras 3, 4]
Meghdoot Laminart v. Collector 1990 (049) ELT 75 [Paras 3, 4]
Union Carbide India Ltd. v. Collector 1988(02)LCX0019 Eq 1989 (043) ELT 0091 (Tribunal) [Paras 3, 4]
Advocated By : Shri L.N. Murthy, JDR, for the Appellants.
Shri V. Sridharan, Advocate, for the Respondents.
[Order per : K.S. Venkataramani, Member (T)]. - The facts, briefly, relating to this appeal against the order dated 7-5-1991 passed by the Collector of Customs (Appeals), Calcutta, which has been preferred by the Collector of Customs, Calcutta, are as follows :-
The importer, namely, M/s. Union Carbide India Ltd., 2, Reiney Park, Calcutta-19, has imported Paste Coated Paper, Ex. s.s. Hooghly Pioneer, Rot. No. 272/86, Line No. 29, bill of entry No. DI 1095 dated 28-5-1986. The goods were assessed under Heading 4811.39/186/86-Cus., @ 100% + 40% ad valorem + CET 4811.39 @ CV 10% + Rs. 2,200/- per M.T. + 1/8% Cess on L/C totalling to duty of Rs. 58,908.68. The sample of said goods was drawn on 4-6-1986 by S.A. and sent to Custom House for chemical testing. The chemical test report signed by Chemical Examiner dated 16-6-1986 was examined by concerned Appraising Group 2. In the test report, it was mentioned that the one surface of paste coated paper was of light yellow colour and other surface was white one. The coloured surface was coated with cellulose derivative (Methyl Cellulose). The percentage of paper found in the sample was 66.4 by weight. A show cause notice was issued on 14-7-1986 in which it was mentioned that the goods are assessable under Heading 3912.39/R/W 150/86 as @ 100% + 40% ad valorem and CET 3912.39/R/W 132/86 CE CV @ 40% amounting to total amount of duty of Rs. 83,352.20 but the goods actually assessed under Heading 4811.39/ 186/86-Cus., totalling to duty of Rs. 58,908.68. So there has been short levy of duty for Rs. 24,443.52. A confirmed demand notice for amount of Rs. 24,443.52 was issued on 31-12-1986. A reminder for confirmed demand was also issued on 10-8-1987. When the importer failed to pay the sum of Rs. 24,443.52 demanded as short levy amount under this office Memo No. S 43-510/86 Ap. Gr. II, dated 9-2-1987, then only a notice under Section 142 of Customs Act, 1962 was issued to recover the short levied amount. A reminder dated 23-1-1991 was issued to the importer to submit the amount of Rs. 24,443.52 which has been short levied as explained above. Then the importer preferred an appeal against Order-in-Original No. S43-510/86A Gr. II (C/D)
S43-461/86A Gr. II
dated 9-2-1987 before the Collector of Customs (Appeals) dated February 1, 1991. Meanwhile, party also submitted a letter dated 5-2-1991 mentioning that above-mentioned case is pending with the Appellate Collector enclosing a copy of letter dated 1-2-1991, file reference No. A24 written to the Collector of Customs (Appeals). So, the appeals were filed by M/s. Union Carbide Ltd. against the orders passed by the Assistant Collector of Customs, Appraising Group 2, under F. No. S43-461/86A (Gr. II) C/D dated 9-2-1987 and S43-510/86A (Gr. II) (C/D) dated 9-2-1987 confirming the demand for payment of Rs. 1,05,181.84 and Rs. 24,443.52 respectively. On the grounds of short levy of duty in respect of the goods cleared under the bills of entry No. DI 406, dated 12-5-1986 and DI 1095 dated 28-5-1986 the Collector of Customs (Appeals) passed an Order-in-Appeal No. Cal. Cus. 280 & 281/91 dated 7-5-1991 and issued on 15-5-1991 setting aside the orders both dated 9-2-1987 passed by the Assistant Collector of Customs, Appraising Group 2 and confirmed the classification of the impugned goods under Tariff Heading 4811.39 both of the Customs Tariff Act, and CET and allowed the appeals
2. Shri Narasimha Murthy, ld. D.R. appearing for the Department, contended that the Collector (Appeals) had erred in holding that the film laminates are classifiable under Chapter 49 CTA because in coming to this conclusion, he had relied upon a Tribunal decision in the case of the same respondents reported in 1983(07)LCX0050 Eq 1983 (014) ELT 2443 which was not pari materia with the present case. That decision was given under BTN-based Customs Tariff and considered whether film laminates could be classified as chemicals under Chapter 38 CTA whereas here the question is of classification of the goods under present HSN-based Tariff. The Chapter Note 1(f) to Chapter 48 which would exclude paper coated with layer of plastics where plastics constituted more than half the total thickness, from classification under that Chapter, had not been considered by the Collector (Appeals). The ld. D.R. referred to the Test Report on the material showing less of paper content and hence it was urged that the goods will be correctly classifiable under Chapter 39 CTA. The ld. D.R., further, reiterated the grounds of appeal in this context. The ld. D.R., further, cited in this connection, the decisions of the Tribunal in the case of Amit Polymers & Compositors v. Collector of C. Ex. - 1988(11)LCX0053 Eq 1989 (039) ELT 0674 (Tri.) = 1989 (020) ECR 454 and Meghdoot Laminart v. Collector of C. Excise - 1990 (049) ELT 75 where the Tribunal had considered the various parameters for classification under Chapter 48 CTA.
3.The ld. Counsel, Shri Sridharan appearing for the respondents, contended that the goods imported cannot be classified under Heading 39.12 as they are not in primary form in terms of Chapter Note 6 to Chapter 39 which lays down what is primary form for purposes of Heading 39.12. The goods imported are in the form of sheets and not in lumps and blocks to be considered primary form. Further, the ld. Counsel pointed out that the criterion for exclusion from Chapter 48 under Chapter Note 1(f) is the thickness of plastic whereas the goods had not been tested for thickness, nor are they in layers. The ld. Counsel, further, submitted that the Tribunal had held in their own case earlier that film laminates are classified under Chapter 48 CTA vide its Order Nos. 126 & 127/1988-D, dated 15-2-1988 -1988(02)LCX0019 Eq 1989 (043) ELT 0091 (Tri.) where the 1983 decision relied upon by the Collector (Appeals) had also been considered.
4. The submissions made by both the parties have been carefully considered. The goods imported are described in the Bill of Entry as film laminate/paste coated paper. The Deptt. seeks to recover short-levied duty on classifying the goods under Heading 39.12 CTA which covers cellulose and its chemical derivatives not elsewhere specified in primary forms. The Deptt. had at the time of clearance assessed the goods under sub-heading 4811.39 which covered `Other Paper and paper board coated, impregnated, or covered with plastics (excluding adhesives). The Department issued the notice for short levy based on Chemical Test Result relevant to the appeal which read as follows :-
The sample is in the form of sheet of paper one surface of which is violet coloured and other surface is white. The coloured surface is coated with cellulose derivative (Methyl cellulose). Av. G.S.M. of the sample as such - 117.6 without tolerance percentage of paper in the sample as such - 40.9.
On examining the rival contentions, it is seen that the Tribunal decision in the case of the same respondent in its Order Nos. 126 & 127/1988-D, dated 15-2-1988 -1988(02)LCX0019 Eq 1989 (043) ELT 0091 (Tri.) dealt with the classification of the same product described as film laminate. The present goods film laminate has been described as a thin film made of electrolytic paste consisting in Zinc Chloride, Ammonium Chloride, Mercuric Chloride, on a special carrier paper for the purpose of maximum migration between the depolarizer mix and zinc electrode of the flat electrolytic cells and are meant for use in manufacture of layer built dry batteries. This is exactly the description and function of the goods considered vide para 3 of the above-cited Tribunal decision wherein Tribunal held that Heading 48.01/21(1) CTA covering impregnated or coated paper was specific for such paper which was, therefore, correctly classifiable thereunder. In that decision, the Tribunal had found as follows :-
The goods, as seen from the invoice, are described as film laminates. A laminate is nothing but a thin layer of a particular material on another layer of the same or another material. There is, therefore, little doubt that the subject film laminate is a kind of coated paper. A sample of the goods was produced before us and it is clear on an inspection of the same that the subject film laminate is composed of a paper as the base with a coating of chemicals on one side. We have, therefore, to proceed on the basis that it is but a coated paper. The goods involved in the present dispute are not laminates though they are called film laminates but the result of coating or deposition of three chemicals on the base paper.
In view of the above factual findings given by the Tribunal, the Department cannot draw any support from Chapter Note 1(f) to Chapter 48 CTA which reads as follows :-
1(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 half the total thickness, or articles of such materials, other than wall coverings of Heading No. 48.14 (Chapter 39).
This is because here the goods imported are not in layers at all, and hence predominance of constituent material in terms of THICKNESS does not arise, and the percentage of material constituent based on chemical test report as is being sought to be done by the Department will not be as per the criterion in the above-said chapter note. For the same reason, it can also be held that the change in the CTA from BTN/CCCN based Tariff (under which earlier Tribunal decision was given) to the present HSN based Tariff will not make any material difference. The ld. D.R. has also cited the Tribunal decisions in Amit Polymers & Compositors - 1988(11)LCX0053 Eq 1989 (039) ELT 0674 (Tri.) = 1989 (020) ECR 454 and Meghdoot Laminart - 1990 (049) ELT 75. But those were cases which dealt with laminated sheets produced by pressing together several layers of impregnated layers of paper, which, we have found, is not the case with the goods with which we are presently concerned. Further, in order to classify the goods under Heading 39.12, the Department should show that the imported goods are residuary type of cellulose and its chemical derivatives in primary form as spelt out in Chapter Note 6 of Chapter 39 CTA which term applied only to liquids and pastes including dispersions and solutions; blocks of irregular shape, lumps, powders, granule flakes and similar bulk forms. Here, admittedly, the imported goods do not answer to the above primary forms. In the result, it is held that the paste coated paper/film laminate has been correctly assessed to duty under Chapter 48 CTA and in this view of the matter, there is no reason to interfere with the impugned order of the Collector (Appeals). The appeal is, therefore, rejected.
Equivalent 1994 (071) ELT 0962 (Tribunal)