1. The four appeals under consideration were earlier subject matter of proceedings before the Government of India, in one case by way of revision application and in other three cases by way of review proceedings under Section 36(2) of the Central Excises and Salt Act as applicable at the relevant time. These now stand transferred as if these were appeals before the Tribunal.
2. The issues involved in these appeals are common and relate to the classification of goods, namely (i) cotton fabric; (ii) paper; and (iii) glass fabric, each impregnated with phenol formaldehyde and described as 'Prepreg' 'C' or 'P' or 'G' respectively. These are intended for making laminated sheets, tubes etc.
3. For the sake of easy reference relevant particulars in regard to these appeals are listed as under :--------------------------------------------------------------------------------S.Appeal No. Description Classification Classification ClassificationNo. of goods as held by as upheld by as claimed original au- Appellate in procecd---------------------------------------------------------------------------------(1) (2) (3) (4) (5) (6)--------------------------------------------------------------------------------1. ED/293/78-C Prepreg 'C' 19-III 19-III 15(A) (1) M/s. Bakelite impregnated2. ED/388/79-D Prepreg'P 17(2) 15(A)(1) 17(2) CCE :Hydera- Paper impreg-3. ED/403/79-D Prepreg 'C' 19-III 15(A)(1) 19-III CCE:Hydera- impregnated4. ED/1114/81-D Prepreg 'G' 22B 15(A)(1) 22B CCE: Hydera- epoxy resin In the three appeals allowed by the Appellate Collector, Central Excise and against which the appeal of Revenue is before us, the Appellate Collector took note of the three thermosetting stages of resin during the process of setting and definition of the same as given in the book "Dictionary of Plastics" by JA Wordingham and P. Reboul : 1964 Edition and reproduced below for reference :"A-Stage"- An early stage in the reaction of a thermosetting resin of the phenol formaldehyde type in which the material is still fusible and wholly soluble in alcohol and acetone. Such resins are used for impregnating papers and fabrics for laminating."B-Stage"- An intermediate stage through which a thermosetting synthe- tic resin of the phenol formaldehyde type passes during the process of cure, and in which the material softens when heated and will swell when immersed in liquids such as acetone or alcohol, but yet will not entirely melt or dissolve. The resins in thermosetting moulding compounds are usually in this stage."C-Stage"- The final stage in the reaction of a thermosetting synthetic resin of the phenol formaldehyde type. At this stage the resin is said to be fully cured, and is insoluble in acetone or alcohol, infusible.
He has also referred to the following abstract from the book titled "Plastics Laminate Materials" by Norman E. Beach : 1967 Edition : "The phenolics are capable of being partly cured (B-Stage) so that they be used in the industrially convenient 'Prepreg' form of resin/reinforcement. These Prepregs are cured by heat and pressure without the need for further catalytic additives." Based on the above and also for the reason that cotton fabrics etc., are used for imparting certain properties to the resin, he held that impregnated paper or impregnated fabrics constitute nothing except other forms of phenol resin with reinforcement of the resin by other materials only added to reduce mechnical shortcomings of plastics. In conclusion, he held that impregnated material should be classified as merely form of resin and the impregnated products therefrom did not constitute articles of plastics.
4. In the case where M/s. Bakelite Hylam have come up in appeal, the Appellate Collector has held that the cotton fabrics impregnated with phenol formaldehyde fell within the scope of Item 19-111 of Central Excise Tariff as this item is specific for cotton fabric impregnated or coated with cellulose derivatives or other materials of plastics. He has further observed that Tariff Item 19-III does not make any distinction between thermosetting and thermo-plastics. The Appellate orders under which appeals of M/s. Bakelite Hylam were allowed were taken up for review by the Government of India under Section 36(2) of the Central Excises and Salt Act as it then existed and in the Review Show Cause Notice, issued by the Government of India, reliance has been placed on the following definition of synthetic resin as given in the Condensed Chemical Dictionary : Ninth Edition Revised by Gessner G.Hawley : "A man-made high polymer resulting from chemical reaction between two or more substances usually with heat or catalyst." Keeping this definition in view among other reasons given in the Show Cause Notice, the Government of India have opined that the orders of the Appellate Collector are not proper and legal.
5. The Government of India in the review notices while calling upon the party to show cause have also required it to state as to why the order of the Appellate Collector be not set aside and the order of the original authority passed by the Assistant Collector be restored or any other order which is deemed fit should not be passed.
6. In the preliminary submissions made by both the sides before us, it has been pleaded that what they were interested in is correct classification of the goods and submitted that the examination of the issues need not be confined to the pleadings on record and the pleas made before the lower authorities. Both the sides have stated that they undertake not to ask for any payment in excess of what has already been claimed in the proceedings before the lower authorities by way of refund or demand as the case may be in case the decision given by the Tribunal is in the light of their this plea.
7. M/s. Bakelite Hylam Limited filed some additional evidence by way of affidavits for admission. Their request in this regard was turned down by the Bench and a separate order (Annexure I) has been recorded in this regard. M/s. Bakelite Hylam Limited were informed that they were free to file any evidence which was in the nature of published record or standard literature during the course of the hearing, if they so desired.
8. Shri Gagrat, the learned advocate for M/s. Bakelite Hylam who are appellants in case of one appeal and respondents in the other appeals, then opened his arguments in relation to the appeal filed by M/s Bakelite Hylam Limited in respect of impregnated cotton fabrics otherwise described as Prepreg 'C'. He pleaded during the course of his arguments that he would also make his plea in regard to other two items, i.e., impregnated paper and impregnated glass fabrics. At the outset, he stated that he is not pressing the claim for assessment of goods under Item 15(A)(1) and mentioned that so far as he is concerned, the competing items are 19-III CET as has been held by the Department or Item 68 CET which according to him, is the proper item under which the goods should fall. He stated that he is aware that another Bench of the CEGAT in the case of Formica judgment : Reported in 1984 (17) E.L.T. 590 has given decision on the very same items holding Prepregs 'C' and 'P' as assessable under Items 19-III and 17(2) respectively and left the choice of assessment in respect of Prepreg'C' as between Items 22F and 68, CET. He has, however, pleaded that a number of other relevant decisions given by the Tribunal and by some Hon'ble High Courts were not taken note of in the case of Formica judgment. He has pleaded that he will show how these decisions support his contention for assessment of goods otherwise than as held by the Bench of the Tribunal in formica case or as sought to be assessed by the Revenue.
9. The learned advocate, Shri Gagrat stated that for the goods to fall under Item 19-III CET, the following three criteria should be satisfied : (i) cotton fabrics after impregnation should continue to have characteristics of cotton fabrics ; (ii) product should be known in the trade as cotton fabrics and should be so used ; and (iii) the cotton fabrics should be such as are impregnated with cellulose derivatives or artificial plastic materials.
10. Regarding the first criterion he has not furnished any specific material to show as to how impregnated cotton fabrics do not have the characteristics of the cotton fabrics. Samples were earlier called for by the Bench and these have been produced after due certification thereof by the Central Excise authorities as being representative of the goods under dispute. These have been admitted in evidence and there is no objection from either side in this regard. We find from the samples produced that the impregnated cotton fabrics are flexible and can be bent without any tear.
11. Regarding the second criterion Shri Garget has pleaded that the goods are not known in the trade as cotton fabrics and these are in the nature of intermediate products for a specific end-use, namely for manufacture of laminated sheet, tubes etc. He has pleaded, no doubt, the Bench of CEGAT in case of Formica : 1984 (17) ELT 590 has held impregnated cotton fabrics of the same type as assessable under 19-III, but has pointed out that the Bench of the Tribunal has placed reliance on the ratio of only two earlier decisions of the Bench namely those in the case of Golden Paper Udyog Private Limited v. Collector of Central Excise, Delhi : 1983 ELT 1123 and Uma Laminated Products v. Collector of Central Excise, Hyderabad : 1984 (17) ELT 187. He has stated that there are a number of other decisions of CEGAT which support his contention that applying the criterion as to how the goods are known in the trade based on the end-use of the product under reference these cannot be held to be falling under 19-III. Various judgments of the CEGAT having bearing on this issue were given in the form of a chart by him and this chart is appended as Annexure II. It is seen from these judgments that except in the case of Formica judgment at serial No. 5 wherein impregnated fabrics have been covered, all other judgments are in the context of paper which has been subjected to various processes of coating with chemicals or otherwise or lamination with films or of varnishing ec. He pleaded that so far as judgments at serial numbers 1 and 4, relied upon in the case of Formica, are concerned, these were given in the context as to whether the goods which continue to fall under the same tariff entry on conversion from paper, would be again chargeable to duty under the tariff entry for paper, i.e., in the context of double levy. He has pleaded that there are a number of decisions as referred to at serial numbers 2, 3, 6, 7, 8 and 9 of the Chart where going by the criterion as to how the goods are known in the trade, the various Benches of the Tribunal have held that polyester/polythene coated/laminated paper, varnished paper etc., which were dealt with in these cases, as not classifiable under tariff Item 17 for the purpose of Central excise/countervailing duty and have held these to be assessable under Items 68, CET. He has pleaded that applying the ratio of these judgments to the goods under reference, these should be assessed under Item 68. His plea is that the goods in this case are for a specified use for making laminations and are known as Prepreg 'C', a recognised nomenclature in technical literature and also that these are not known in the trade as cotton fabrics.
12. He has further pleaded that in the case of Formica referred to supra, the Bench first discussed the issue relating to paper and then applied the rationale of the same in the case of impregnated cotton fabrics. This, according to him, was not a correct approach inasmuch as the wording of the traiff Items 17 and 19 are totally different. He highlighted the fact that in Item 17 there is no mention about the impregnating materials or solution while in Item 19 impregnating materials have been specified. He has further slated that the Bench in case of Formica judgment did not take note of the earlier judgments in the context of paper coated with polyester film (judgments at Serial Nos. 2 and 3 of the annexed Chart refer) and has pleaded that after the delivery of the Formica judgment, different Benches of the Tribunal have taken a consistent view that goods like electrical insulating paper, varnished paper and steel re-inforced paper, coated tissue paper for stencils (dealt with in the judgments at Serial Nos. 6, 7, 8 and 9 of the chart) could not be classified under Tariff Item No. 17 for the reason that these were intended for specific end-use and were known in the market otherwise than as paper because of their end-use. The thrust of his argument was that we should not be guided by the decision given in the case of Formica but should take a view based on the criteria laid in other judgments. He drew our attention pointedly to the judgment delivered in the case of Multiple Fabrics Private Limited v.Collector of Central Excise, Calcutta reported in 1984 (16) ELT 301 and referred to para 24 of this judgment which is reproduced below : "A point which was sought to be made by the learned Departmental Representative was that sub-item (3) of item 22, which has been reproduced in para 19 above refers to fabrics impregnated, coated or laminated with (plastic material). In fact his argument was to the effect that if a fabric once came into existence and was thereafter impregnated, coated or laminated with a plastic material, it should be deemed to fall within this sub-item, irrespective of the proportion of the plastic material or the nature of the final product. We do not find it possible to accept this argument. The wording of sub-item (3) as well as of the main item under which it appears, refers to "fabrics". The fabrics may have been impregnated, coated or laminated with plastic material, but they must still be capable of being called "fabrics". Impregnation, coating or lamination are all processes which upto a stage would leave the finished product still capable of being called a fabric. But when the proportion of plastic material reaches such a level that the final product does not retain the characteristics of a fabric, it would not, in our view, be proper or correct to treat this final product as an impregnated, coated or laminated fabric, merely because there is a fabric embedded inside it." He canvassed the point that by impregnating the fabric with phenol formaldehyde the resulting product has gone beyond the stage of the fabric. He also cited a number of other judgments to support his plea that trade criterion for assessment of goods has been adopted in the decisions dealing with other items of tariff also. He drew our attention to the decision in the case of Indian Tools Manufacturers, Bombay v. Collector of Central Excise, Poona: 1984(18) ELT 527 and the Hon'ble Supreme Court judgments given on the Special Leave Petition (Civil) 6254 of 1983 in the case of Geep Flash Light Industries Limited, Allahabad v. Union of India, 1985 (22) E.L.T. 3 (S.C.) and in the case of Indo-International Industries v. Commissioner of Sales Tax : 1981 ELT 325 (SC). The advocate of M/s. Bakelite Hylam after the hearing submitted a recent judgment of the Hon'ble Sureme Court in the case of Macneitt and Barry Limited : 1986 (23) E.L.T. 5 (SC).
13. The next leg of argument of Shri Gagrat is that the Prepreg C' even if it is held to be a cotton fabric would still not fall under 19-III, CET inasmuch as the goods have neither been coated with cellulose derivatives nor with artificial plastic materials as the impregnation has been done with phenol formaldehyde resin. According to him the resin and plastic materials are two different categories of goods and these are considered so in chemical technology. For this he relied upon the judgment of the Hon'ble High Court of Bombay in the case of Industrial Plastics Corporation Private Limited and Ors. v. Union of India : 1983 E.L.T 425 (Bombay) and judgment of the same High Court in the case of Chemicals and Fibres of India Limited v. Union of India : 1982 E.L.T. 917 (Bom). He stated that the Hon'ble High Court in the former case has held that phenol formaldehyde is a resin only and not a plastic material and in the latter that artificial synthetic resin is not the same as plastic materials. He has pleaded that even the Deputy Chief Chemist who was cross-examined in the proceedings before the Hon'ble High Court in the case of Industrial Plastics supra-has admitted that phenol formaldehyde is a resin and not a plastic material. He drew our attention to definition of resin as given separately in Condensed Chemical Dictionary : Ninth Edition Revised by Gessner G. Hawley, given as under : "Resin, synthetic : A man-made high polymer resulting from a chemical reaction between two (or more) substances, usually with heat or a catalyst. This definition includes synthetic rubbers, siloxanes and silicones, but excludes modified, water-soluble polymers (often called resins). Distinction should be made between a synthetic resin and a plastic (q.v.) the former is the polymer itself, whereas the latter is the polymer plus such additives as filters, colorant, plasticizers etc." 14. On behalf of the Revenue, the learned counsel, Shri V.Lakshmikumaran, has made the following points : (i) The impregnated cotton fabrics under reference answer to the description of the term cotton fabrics as set out in tariff Item 19 of the Central Excise Tariff. He has pleaded that the wording used in the tariff item should be given widest meaning so as to cover the species of the goods described in the tariff entry and that the entry should be read as the layman would road it. He has pleaded that as held in the case of Bolani Ores v. State of Orissa 1975 (2) SCR 138, the entry should be interpreted not with dictionary in one hand and the Tariff in the other hand. According to him, cotton predominates by weight in the case of the assessee's goods and these are also flexible and answer to the description of term cotton fabrics; tariff Item 19 covers all varieties of cotton fabrics and we should go by the intrinsic qualities of the material. He further stated that the concept of textiles is not a static one and should take into account various scientific advances made in this field. The fabrics may be for industrial use and so long as the people in particular trade treat these goods as fabrics, the same should be assessed under tariff Item 19. He has pleaded that the goods dealt with in the case of Multiple Fabrics : 1984 (16) E.L.T. 301 were quite different from those in the instant case. In that case the PVC resin was the predominant constituent being 56.3% and similarly in the case of International Conveyors cited by the appellants : 1983 E.L.T. 1216, PVC resin constituted 60% of the material of the goods and, therefore, the reliance of M/s. Bakelite Hylam on these judgments was misplaced.
(ii) Shri Lakshmikumaran further stated that the way the entry 19-III, CET was worded, the term plastic material used therein would encompass phenol formaldehyde also. He stated that no doubt resin and plastic as understood in chemical technology are two separate items but plastics is a generic term whereas the term resin represents the species. Term plastics, according to him, as set out in various books on plastics also covers resin. He cited the definitions of plastics etc., as given in ASTM; Hach's Chemical Dictionary; Modern Plastics Technology : Chapter 1; Encyclopaedia of Chemical Technelogy and Plastic Materials by J.A. Brydson p. 587. He further stated the appellants themselves have stated before the lower authority and in the appeal memorandum filed that the fabrics are coated with plastic material and having used the term plastic material with reference to the phenol formaldehyde all along consistently and that it does not now lie in the mouth of M/s.
Bakelite Hylam to say that the impregnating material is not plastic but resin. He has pleaded that the term plastics as understood by the layman and in the trade should be made applicable to the entry under 19-III, CBT. He has further pleaded that in the case of Industrial Plastics Corporation : 1983 E.L.T. 425, the Bombay High Court judgment cited by the appellants, the issues were in the context of the interpretation of tariff Item 15A and inasmuch as both the terms resin and plastics have been used in that entry in the technical sense, the terms had to be interpreted in that light in juxtaposition with each other. In the case of tariff item 19-III, the choice is not between the resin and plastics and the entry should be interpreted as the layman would understand it. He further pleaded since items 19-III and 15A are differently worded, the interpretation given in the context of tariff Item 15A should not be made applicable in the context of Item No. 19-III, CET.15. The points that arise for our consideration out of M/s. Bakelite Hylam's appeal are : (i) whether the impregnated cotton fabrics described as Prepreg 'C' are covered by the item cotton fabrics and whether these have such characteristics as would preclude these from the description of the item cotton fabrics as set out under tariff Item 19, CET; (ii) whether the term artificial plastic materials as used in tariff item 19-III, CET would cover within its amplitude the resins and in this case, phenol formaldehyde; (iii) whether the goods could be considered to be impregnated cotton fabrics taking into consideration the trade criterion in the light of the various case laws cited.
16. At the outset, we would like to observe that both the sides have stressed the need for adopting the trade criterion, i.e., how goods are known in the trade by those dealing in the said product and the majority of the case laws cited has been in support of this contention.
It is necessary to examine the scope of Item No. 19, CET in the context in which the issues have been raised. The Item 19, CET as it existed at the relevant time reads as under : "Cotton Fabrics"-means all varieties of fabrics manufactured either wholly or partly from cotton and includes dhoties, sarees, chaddars, bed-sheets, bed-spreads, counter-panes, table-cloths, embroidery in the piece, in strips or in motifs and fabrics impregnated, coated or laminated with preparations of cellulose derivatives or other artificial plastic materials, if (i) in such fabrics contain more than 40 per cent by weight of cotton and 50 per cent or more by weight of non-cellulosic fibres or yarn or both: III. Cotton fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials." The first requirement, therefore, for a fabric to be covered by Item 19 CET is the content of the cotton by weight in it. The learned counsel for the Revenue has clearly mentioned that cotton predominates by weight in the instant case and there is no contradiction in this regard from M/s. Bakelite Hylam. In the cases of M/s. Multiple Fabrics reported in 1984 (16) E.L.T. 301 and International Conveyors-1983 E.L.T. 1216 cited supra in support of M/s. Bakelite Hylam's claim, the percentage of the material constituting the goods in those cases were, among other things, taken note of by the Bench of the Tribunal. It is seen that the cotton did not predominate by weight in those. In this respect these judgments are distinguishable from the facts of this case.
17. The learned counsel for M/s. Bakelite Hylam has not brought to our notice any other characteristics of the goods which would take these out of the purview of Item 19, CET. From the samples submitted in evidence as mentioned in the earlier paragraphs, it is seen that the impregnated fabrics under reference are flexible and they can be bent without tear. Impregnation of phenol formaldehyde by itself cannot take the fabrics out of the purview of Item 19, CET. Even the Bench of the Tribunal in the case of Multiple Fabrics has observed in paragraph 24 reproduced earlier that "impregnation", coating or lamination are all processes which up to a stage would leave the finished product still capable of being called a fabric. But when the proportion of plastic material reaches such a level that the final product does not retain the characteristics of a fabric, it would not, in our view, be proper or correct to treat this final product as an impregnated, coated or laminated fabric, merely because there is a fabric embedded inside it".
It has not been proved before us that the proportion of the plastic materials has reached such a level in the impregnated fabrics that the final product has ceased to retain the characteristics of fabric and taken it out of the purview of the scope of cotton fabrics as set out in entry 19-III, CET. As it is the term fabric covers a wide range and the Hon'ble Supreme Court in the case of Glass Manufacturers v. State of Rajasthan and Ors. reported in 1980 E.L.T. 383 (SC) nave held in the case of tyrecord fabrics that these fall within the scope of term fabrics. The issue in that case was under Item 22(3) CET; i.e., impregnated fabrics but it does not make any difference to the argument. The product in this background has to be held to be a fabric for the purpose of Item 19 CET.18. The next point for consideration is whether the fabric coated with phenol formaldehyde can be considered to have been impregnated with artificial plastic resins. M/s. Bakelite Hylam in this regard have placed reliance on the judgment of the Hon'ble Bombay High Court in the case of Industrial Plastic Corporation Private Limited wherein the Deputy Chief Chemist of the Department has admitted that phenol formaldehyde is not artificial plastic but resin and the Court had held it so. In short, what has been pleaded is that plastic and resin are two separate categories of goods and these should be given meanings as understood technically for the purpose of interpreting Item No. 19-111.
We would like to observe that unlike in the case of most of the tariff items, the wording of Item 15A, CET covering artificial plastic materials and resins, is a peculiar one and the items described under this entry are by their technical nomenclature.
19. Adverting to the case law cited by the appellants, it is relevant to examine as to the context in which the particular judgments have been given. We find that the decisions quoted by the appellants in support of plea was given when a distinction was sought to be drawn between resin and plastic in terms of the entry under tariff Item 15A.This entry as it stood at the relevant time read as : "Artificial or synthetic resins and plastic materials and cellulose esters and ethers, and articles thereof: (i) The following artificial or synthetic resins and plastics materials and cellulose esters and ethers, in any form, whether solid, liquid or as pasty, or as powder, granules or flakes, or in the form of moulding powders, namely; ...
It is seen that the context of this item requires interpretation of the items covered therein based on the technical nomenclature adopted in the description of the tariff Item. It is a well settled principle of law that unless a context requires interpretation of a tariff entry based on technical meaning, the entry should be interpreted as the layman would understand or those who are dealing with the items covered under a particular tariff entry in the trade would understand. The wording of tariff Item 15A clearly calls for an interpretation based on the chemical composition of the products covered therein and how the terms used therein are described in the technical books of polymer science. It is in this context that the Hon'ble Bombay High Court has interpreted the scope of term Resin vis-a-vis Plastics in the case of Chemical & Fibres India Limited. Therefore the distinction between the resin and the plastics given in the context of 15A, CET is peculiar to the words and terms used under this tariff entry and relevant only for interpreting this tariff entry. Terms and expression used in tariff entry 19-III, CET have to be interpreted as contended and conceded by both the parties as a layman or ordinary persons dealing with the goods covered under this entry would understand. Heavy reliance has been placed on the observations of the Hon'ble Bombay High Court in the case of Chemicals and Fibres of India Limited v. Union of India and Ors.
1982 E.L.T. 917 (Bombay). In that case the question was whether polymer chips would fall within. T.I. 15A. The Hon'ble High Court rejected the contention that for the purpose of sub-item (1) of that Item, synthetic resins must be construed as synonymous with plastic materials. With reference to the argument that the Explanation under that Item provided that for the purpose of sub-item (2), "plastics" meant the various artificial or synthetic resins or plastic material included in sub-item (1), the Hon'ble High Court, in para 46 of the judgment, pointed out that the Explanation was only for the purpose of sub-item (2), and that it would be wholly improper to decide the scope of sub-item (1) by applying that Explanation. It is seen from this that even as between two sub-items of the same Tariff Item, the Hon'ble High Court was not prepared to apply the Explanation relating to one sub-item to the interpretation of the other sub-item. Much less can it be contended that the scope of other Tariff items such as 19 or 22 B could be interpreted by applying the meaning given in one sub-item of Item 15 A.Therefore the interpretation given in the context of Item 15A CET in the judgment cited will not be relevant for interpreting Item 19-III, CET.20. We find that according to common understanding term artificial plastic embraces within its amplitude the resin also. The plastic is a generic name and as pointed out by the learned counsel for the Revenue, ASTM, has defined plastics as under : "Materials that contain as an essential ingredient organic substances of high molecular weight which are solid in the finished state but are shaped by flow at some stage of their manufacture or during processing into finished articles." Similar is the definition of the plastics as given in Chapter 34 : Plastic Industries : By George T. Austin Shreve's Chemical Process Industries as under : "A plastic may be defined as a material that contains a polymerized organic substance of large molecular weight as an essential ingredient, is solid in its finished state, and at some stage in its manufacture or its processing into finished articles can be shaped by flow." Kirk Othmer Encyclopaedia of Chemical Technology has also defined plastic as "a plastic is classified as a thermoplastic resin or a thermosetting resin depending upon how heat affects it. When heated, thermoplastic resins soften and flow as liquids; when cooled, they solidify." In the Condensed Chemical Dictionary : Tenth Edition : Revised by Gessner G. Hawley, Plastic is defined : "Plastics in general (including all forms) are sensitive to high temperatures, among the more resistant being fiuorocarbon resins, nylon, phenolics, polyamides, and silicones, though even these soften or melt above 260C".
21. We find that there is enough evidence to show that the term plastic as understood in the trade and technical books would cover resin also.
Resin we hold is covered under the generic term plastics. The appellants themselves, as pointed out by the learned counsel for the Revenue, have all along in the proceedings before lower authorities and in their appeal memorandum described the impregnating material as plastic material. In view of the above, we hold that the term plastic has to be interpreted as pleaded by the Revenue based on how the expression is understood popularly, that is to say, the artificial plastic materials cover artificial resins also. We, therefore, hold that the impregnated fabrics have been impregnated with artificial plastic materials.
22. Coming now to the third proposition, the learned counsel for the appellants laid a lot of stress on the point that the impregnated fabric as understood in the trade would not cover the goods under reference. He has pleaded that these are known as Prepreg 'C and not known in the trade as impregnated fabrics and are intended for a specific end-use, that is, for lamination etc. We find in the case of Formica this issue has been squarely dealt with by this Tribunal. But the learned counsel for the appellants has stated that all the material facts and the relevant case law has not been taken note of by the Hon'ble Bench who decided the issue in the case of Formica. The case law cited by him is in the context of 'paper'. According to these decisions polythene coated paper, varnished paper, presspahn paper, etc., and chemically-treated paper have been held to be not paper for the purposes of Item 17(2), CET for the reason that these were not known in the trade as paper and were intended for a specific end-use.
It has been pleaded that based on the end-use and trade criteria the goods were not held to be paper, although these were described as presspahn paper and stencil paper etc.,(emphasis supplied). We find that the goods described in all those cases were finished products with a distinct character of their own and intended for meeting a specific need of the consumer. These are also dealt with in the trade, depending upon the end-use for which these were intended. In this respect we observe that the rationale adopted in the cases cited is not applicable in the instant case. In the instant case goods are a semi-finished product. What has been done is that the fabric has been prepared by impregnation with phenol formaldehyde which is cured to a 'B' stage as mentioned in the earlier paragraphs and has to be subjected to further processing. So what we find is that the goods are a fabric which has been prepared for lamination purposes by impregnation of a semi-cured phenol formaldehyde. We are not persuaded that there is any trade criterion which takes the goods out of the purview of impregnated fabrics. The goods have not lost their character as fabrics. In view of the above, we hold that the impregnated fabrics under reference are assessable under 19-III, CET.23. The other two items for consideration before us are impregnated paper, i.e. Prepreg 'P' and impregnated glass fabric Prepreg 'G'. Both the sides agree that the arguments advanced by them in the case of impregnated cotton fabric would be generally applicable for the purpose of classification of these also.
24. The learned counsel for the Revenue who are appellants in the case where impregnated paper has been dealt with, has added that in the case of Kores India v. Collector of Central Excise, Thane in Order No.C-622/85 dated 28-8-85, the Bench of the Tribunal has examined the scope of the coverage under tariff entry 17 in the context of classification of carbon paper. The issue examined, he peaded, in that case was whether the carbon paper would fall in the category of paper which has been subjected to the treatment of coating. He has pleaded that the Tribunal while deciding the matter took note of the judgment of the Hon'ble Supreme Court in the case of the very same party in respect of the same goods given in the context of the assessment of goods under the Sales Tax Schedule entry 'Paper other than hand-made paper', where their Lordships have held that carbon paper is not covered by the said entry (Case of State of U.P. v. Kores India : AIR 1977 SC 132). The Tribunal has held that the decision given in the context of the Sales Tax entry "Paper, other than hand-made paper," would not be applicable while interpreting 17(2), CET inasmuch as the scope of this entry is wider and it covers specifically impregnated, coated and other paper also. It has been held by the Tribunal that since the tissue paper has been subjected to process of coating for the manufacture of carbon paper, the carbon paper is coated paper falling under 17(2), CET. He has pleaded that adopting the same rationale the paper, Prtpreg 'P', has been impregnated with phenol formaldehyde and the same should be treated as impregnated paper falling under tariff entry 17(2), CET. He has stated that the decision taken in the case of Formica referred to supra calls for no change. We find that tariff item 17, CET as it existed at relevant time read as follows : "Paper and paper board, all sorts (including paste-board, millboard, strawboard, cardboard and corrugated board) in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power- (i) Uncoated and coated printing and writing paper (other than poster paper).
(ii) Paper board and all other kinds of paper (including paper or paper boards which have been subjected to various treatments such as coating, impregnating, corrugation, creping and design printing).
Not elsewhere specified." The entry 17(2), CET covers paper, which has been subjected to various treatments such as impregnation, coating etc. It is not denied that the product Prepreg 'P' is the result of impregnation of paper with phenol formaldehyde. In this entry we observe that the material with which the impregnation should be done for the purpose of this entry is not mentioned as is the case under Item 19-III, CET. To this extent this entry can be taken to be broader in scope covering paper which has been impregnated with any material. Following the ratio of the judgment of this Tribunal in the case of Kores India v. Collector of Central Excise, Thane, supra, we hold that the judgment of the Hon'ble Supreme Court cited by M/s Bakelite Hylam in the case of Macneill and Barry Limited : 1986 (23) E.L.T. 3 (SC) does not advance their case as this judgment has also been given in the context of the entry in the Sales Tax Schedule "Paper other than hand-made Paper" as was the case in case of State of U.P. v. Kores India : AIR 1977 (SC) 132 dealt with by the Tribunal in their judgment above. As mentioned earlier, the tariff entry 17(2), is wider in scope and specifically covers impregnated/ coated paper etc. In view of the foregoing we hold that the Prepreg 'P' is covered by the term impregnated/coated paper, as set out in Item No.17(2), CET.25. The learned counsel for M/s Bakelite Hylam Limited again stressed his argument that the Prepreg 'P' is not known as paper in the industry and as such it is not assessable under tariff tariff Item 17, CET. We observe that tariff entry covers all categories of impregnated paper.
The case law cited in support of adoption of criterion of trade parlance as referred to in earlier paragraphs in the case of presspahn paper, polythene coated paper, varnished paper etc., it may be mentioned again, related to finished products which answered to a particular need of the consumer and these were known in the trade as articles other than paper on account of the specific characteristics these had acquired for a specific consumer need. In the instant case the impregnated paper has been prepared as an intermediate product for use as lamination and the impregnating material phenol formaldehyde has been cured upto 'B' stage of curing only for final culing to 'C' stage later. We are not persuaded, as mentioned in the case of impregnated cotton fabrics, that there is any trade criterion which takes it out of the category of impregnated paper as covered under Item 17(2), CET.Therefore we hold that the Prepreg 'P' is nothing but an impregnated paper falling under Item 17(2), CET prepared for use for lamination.
26. The third item for consideration before us is glass fabric impregnated with phenol formaldehyde known as Prepreg 'G'. In this case also both the sides have stated that the arguments adduced in the case of fabrics will equally apply in this case. On behalf of the Revenue the learned counsel, Shri Lakshmikumaran, has pleaded that in the case of Formica the Bench of the CEGAT has ruled out the assessment for this under Item 22B and has held that the choice for purposes of assessment is between Items 68 and 22F, CET. He has stated with respect that this position was not acceptable. Our attention has been drawn by him to the wording of Item 22B, CET which Item read as under at the relevant time : "Textile fabrics impregnated or coated with preparations of cellulose derivatives or other artificial plastic materials not elsewhere specified. His plea is that glass fabrics are not specified anywhere in the Tariff and since Item 22B covers impregnated textile fabrics n.o.s. these should fall under this Item. He has pleaded that Item 22F covers mineral fibres and yarn and manufactures therefrom. The glass fabrics which are impregnated are not specifically covered under this description and these therefore should fall under Item 22B CET. According to him Item 22B, CET was more specific as against Item 22F, CET for the reason that it specifically cover all impregnated textile fabrics not otherwise specified. His plea is that a specific entry should take precedence over a general entry.
27. The learned counsel for the respondents, M/s. Bakelite Hylam, has, however, pleaded that the choice for the purpose of assessment of impregnated glass fabrics is between 68 and 22F CET.28. We observe that Item 22F covers a broad sweep of items and all manufactures of mineral fibres and yarn are covered therein. In this entry it is the material of the product which is the determining factor and for this specificity for assessment under this item has to be seen with reference to the material. Before Item 22F is ruled out we have to get the answer whether by criterion of the material, the goods fall within the ambit of Item 22F CET or not. In the matter before us it is nobody's case that the goods are not manufacture of mineral fibres and yarn. Item 22B in this context, will have to be considered residuary Item so far as the glass fabrics are concerned and 22F CET as more specific. We find that under Item 22F CET the glass fabrics by notification No. 87/76 as amended have been exempted from the payment of duty. We observe that going by the principle of contem-poranea expositia, this shows the framers of the tariff entry 22F CET clearly intended the glass fabrics to fall under this entry and on the same logic impregnated glass fabrics would also be covered under this entry.
We, therefore, hold that the impregnated glass fall under tariff Item 22F CET.29. Both the sides after their arguments had stated that they were not pressing any other issue which may have been raised in the proceedings before the lower authorities or before the Government of India. It is hence not necessary for us to discuss these issues.
30. In view of the reasons given above, we reject the appeal of M/s.
Bakelite Hylam Limited and allow the appeals of the Department and order classification of each of the subject goods as held in the foregoing paragraphs.