1998(05)LCX0011

IN THE CEGAT, WEST ZONAL BENCH, MUMBAI

Justice U.L. Bhat, President and Shri Gowri Shankar, Member (T)

STP LIMITED

Versus

COMMISSIONER OF CUSTOMS, NHAVA SHEVA

Order No. 1017/98/WRB, dated 16-3-1998 in Appeal No. C/1039-R/97-Bom

Advocated By : Shri V.S. Nankani, Advocate, for the Appellant.

Shri S.V. Singh, JDR, for the Respondent.

[Order per : Gowri Shankar, Member (T)]. - The question for consideration in this appeal is the classification, for purposes of the import policy, of two products imported and described as “Torchseal 4 mm black and Glasseal 2.5 mm black”. The importer claimed that import of these goods did not require a licence on the basis that Torchseal was classifiable as non-woven under Heading 5803.99 and Glasseal as an article of glass fibre under Heading 7019.39, for the purpose of the Export-Import policy for 1992-97. The Custom House was of the view that the goods would fall under Heading 68.07 as article of bitumen.

2. Adjudicating upon the consequent issue of notice, Commissioner has confirmed this classification and ordered confiscation of the goods with option to redeem them on payment of fine and imposed a penalty on the importer. Hence this appeal.

3. The learned Advocate for the appellant contends as follows :-

Torchseal is essentially non woven polyester fabric coated with resin modified bitumen on both sides. Glasseal also is a combination of polypropylene thermoplastic polymers modified bitumen with glass fibre reinforcement. Each of the products is used for waterproofing application. Torchseal is a non woven fabric coated or covered with bitumen and Glasseal an article of glass fibre. The Explanatory Notes to the Harmonised System of Nomenclature (HSN) on which the Customs Tariff the relevant import policy are based explained (at page 583) that substrate for manufacturing bituminous roofing fabrics are covered by Heading 56.03. The notes to Heading 68.07, under which the Commissioner has classified the goods exclude (at page 987) textile fabrics coated and impregnated or covered with bitumen or as asphalt and fabrics or webs of glass fibre which are indicated to be classifiable under Chapter 56 or 59 and Heading 70.19 respectively. The Commissioner’s view that the goods are in the nature of roofing boards classifiable under Heading 68.07 is not acceptable because the goods are not articles which by themselves have sufficient strength, rigidity and other characteristics that would permit their use as roof by themselves. The goods in the present case are only used for water proofing.

4. The departmental representative emphasises that the goods are themselves ready for use without any processing and that the essential character they possess, namely imperviousness to water is conferred on them by the presence of the layers of bitumen. The layers of polypropylene and glass fibre serve the subsidiary function of being substrates and of rot proofing. The goods cannot be considered to be substrates for manufacturing bituminised fabrics but are themselves such fabrics and are thus correctly classifiable under Heading 6807. Even in the case of doubt the application of Rule 3(b) of the Interpretative rules of the Tariff would justify the classification under Heading 6807, as the bitumen gives the goods their essential character.

5. We have seen the samples of each of the products and the description in the package in which the samples are contained. Torchseal is described as “waterproofing membrane with a special multilayered design for superior pliability, tensile strength, workability and resistance to elements”. Its outstanding features are stated to be “total impermeability, excellent resistance to ageing and weathering, outstanding bondability and seam integrity, stability at high temperatures, very high resistance to impact and puncture; simple, single-layer installation reduces labour and error”. Glasseal is described as APP modified bitumen membranes produced from a blend of special polypropylene thermoplastic polymers and distilled bitumen. The outstanding features claimed are “dimensional stability, rot-proof and inert base layer for multi-layer specifications”.

6.  Heading 56.03 is for non wovens whether or not impregnated, coated, covered or laminated. The Explanatory Note to the heading (at page 853) indicates substrates for manufacturing bituminous roofing fabrics are covered by this heading. A non woven fabric which would be the basis for making bituminised roofing fabrics would be covered by this heading. However Torchseal is much more than just a substrate. It is described as a pre-fabricated waterproofing membrane. The presence of bitumen shows that it has already undergone the process required to make it a water proofing fabric. The features attributed to it by the manufacturer show that it provides water proofing and a degree of strength and resilence. It is not in dispute that it is to be used as a waterproofing fabric. Therefore it is not merely a non-woven classifiable under Heading 56.03. Once that heading is excluded, Heading 68.07 would appropriately apply to it. The contention that it is not a roofing board is questionable. The description of roofing boards in the Explanatory Notes to Heading 68.07 as “consisting of a substrate (e.g. of paper board of web or fabric of glass fibre, fabrics of man made fibre or jute, or of aluminium foil) completely enveloped in, or covered on both sides by, a layer of asphalt or similar material” would apply to Torchseal. The appellant was not able to substantiate the contention that roofing boards and building boards included in Heading 68.07 must necessarily be of such rigidity and strength so as to render them capable of being used as roofs by themselves. Even on the assumption that the products are not roofing boards, the heading would still apply. Roofing boards and building boards are only an instance of goods included in the Heading 68.07. The goods have been designed for use as, and sold as water proofing layers. The characteristic of waterproofing is imparted by the presence of bitumen.

7. These considerations would equally apply to Glasseal. The packaging of the material describes it as APP modified membrane with glass fabric reinforcement. The glass fibre is therefore present as reinforcement in a product which is designed as a layer of waterproofing fabrics. The product therefore will more appropriately be classifiable as an article of bitumen, and not as an article of glass fibre as claimed by the appellant.

8. The classification determined by the Collector is therefore confirmed. The confiscation of the goods for having been imported without a licence which, the policy requires is also confirmed as is the fine of Rs. 50,000/- against the value of the goods of Rs. 12 lakhs approximately. There is however nothing to show that the appellant had deliberately mis-declared the goods. We therefore set aside the penalty of Rs. 50,000/- imposed.

9. Appeal allowed in part.

Equivalent 1999 (113) ELT 125 (Tribunal)