1. This appeal is against Order-in-Appeal No. 67-CE/JPR/88 dated 14-6-1988 passed by Collector of Central Excise (Appeals), New Delhi.
By order dated 19-5-1987, the Assistant Collector of Central Excise, Jaipur, classified the following goods, manufactured by the appellants, under the headings/sub-headings of the Schedule to the Central Excise Tariff Act, 1985 (the Schedule is referred to hereinafter as the New Tariff) - (1) paper based unclad industrial laminates (2) paper based copper clad industrial laminates (3) glass fabric based unclad industrial laminates and (4) glass fabric based clad industrial laminates as shown against each:-(1) Paper based unclad industrial laminates 3920.31(2) Paper based copper clad industrial laminates 3920.31(3) Glass fabrics based unclad industrial laminates. 7014.00(4) Glass fabric based clad industrial laminates 7014.00 He ordered levy of duty and revision of the classification already ordered accordingly. He also confirmed the demand for duty raised by show cause notice dated 1-9-1986 for Rs. 10,82,699.54 and finalisation of assessments made on provisional basis. The appeal against this order was dismissed by the Collector (Appeals) by order dated 14-6-1988 which is now under challenge in the present appeal.
2. By interim order No. 17/89-C, dated 28-2-1989, the Tribunal directed that, during the pendency of the appeal, assessment should be made as follows :-"Copper clad laminates (both paper based and glass epoxy 74.10based)Copper unclad laminates and glass epoxy unclad 85.46"laminates.
It was further ordered that future clearances should be allowed on execution of bonds without insistence on bank guarantees and that the bank guarantees already executed should not be encashed, till the disposal of the appeal.
3. The hearing of the appeal was spread over several sittings. Shri V.Sridharan, Advocate, represented the appellants and Shri A.S. Sunder Rajan, DR, the respondent.
3A. The appellants' claim on classification of the goods is as follows :- Heading/sub-heading Copper clad laminates whether glass fabric based or paper 74.06 based Unclad laminates 85.46 In the alternative, paper based unclad laminate 48.18 or 39.22 (upto 10-2-1987) and 39.26 (after 10-2-1987) 4. In support of the claim regarding copper clad laminates, whether glass based or epoxy based, under heading No. 74.06, reliance was placed by the learned Counsel for the appellants on this Tribunal's decision in 1989 (43) E.L.T. 660 (Tri.) C.C.E., Ahmedabad and Ors. v.Metro Wood Engineering Works and Ors. Order No. 52-54/89-C, dated 16-2-1989. In that case, the Revenue had contended that industrial laminates with copper cladding would be classifiable under Heading 7413.90 as "other articles of copper" and not 74.06. Relying on Chapter Note l(viii) to Chapter 74 of the New Tariff and the position that the copper sheet or foil gave the laminate its essential character of conduction of electric current, the Tribunal held that the product was classifiable as copper foil under Heading 74.06 and not as an article of copper under Heading 7413.90.
5. Shri Sridharan also drew support from the CBEC's Circular F.No.93/105/86-CX. 3, dated 31-12-1986 which inter alia opined that copper clad glass fabric reinforced laminates would appropriately be classifiable under Chapter 74 of the New Tariff along with copper plates, sheets, coils, as the case might be. Therefore, copper clad laminates, paper or glass based, would fall under Heading 74.06.
6. In support of the claim regarding unclad laminates, the appellants' contention, relying, inter alia, on certain decisions of the Tribunal [though in relation to the erstwhile First Schedule to the Central Excises & Salt Act, 1944 (hereinafter referred to as the old Tariff) which ceased to be in force on 27-2-1986], was that industrial laminates were electrical insulators. Those decisions held good even for the new Tariff. The correct heading was, therefore, 85.46. In coming to its conclusion, the Tribunal relied, inter alia, on its earlier decision in the case of Bakelite Hylam Ltd. v. Collector of Central Excise [1985 (22) E.L.T. 879]. The Tariff under consideration in that case was the old Tariff but the basic question was whether industrial laminates were raw materials for electrical insulators and not finished insulators (as contended by the Revenue) or electrical insulators. The Tribunal considered the question with reference to the definition of 'insulators' in technical books, dictionaries and Indian Standards Institution's publication "Electro Technical Vocabulary - Fundamental Definitions" and held that industrial laminates were insulators excluded from the scope of Item 15A(2) of the old Tariff. It was further held that some minor fabrication such as punching or drilling of wholes to be undertaken on the laminates would not detract from the position that the sheets were insulators. Paras 18 to 25 of the said order contained the detailed analysis leading to the above conclusion.
7. Replying to the above contentions, the learned DR, for the respondent, submitted that the basis for the Tribunal's order in the Metro Wood Engineering Works case (supra) was the previous decision in the Bokelite Hylam case. The latter case related to the old Tariff and was not relevant for the New Tariff which had to be interpretad on the basis of its headings, Section and Chapter Notes and interpretation rules.
8. We are unable to accept the DR's contention. It is true that the Tribunal's order in the Metro Wood Engineering Works case (supra) referred inter alia to the Bakelite Hylam decision (supra). But, in para 11 of the former order, the Tribunal has stated that though the Tariff had changed, the nature of the goods had not. The goods had been identified to be electrical insulators and had to be classified with reference to the wordings of the new Tariff and it was held that the specific sub-heading 8546.00 for electrical insulators was to be preferred to the general sub-heading 3920.31 for rigid plastic sheets, films, foil and strips of "other plastics".
9. We may now proceed to look at the issue a little more closely. In 1979, Item No. 15A of the old Tariff was amended. A second Explanation was added on the following lines :- "This item does not include electrical insulators or electrical insulating fittings or parts of such insulators or electrical fittings." The words "insulators" and "insulating fittings" were not defined. In the Bakelite Hylam case (supra), the Tribunal had to construe these words and consider whether industrial laminates would or .would not be "insulators". Relying on a host of authorities, including the Indian Standards Institution "Electro Technical Vocabulary - Fundamental Definitions", it was held that rigid plastic laminated sheets made out of electrically insulating material, viz., plastics, paper, glass etc.
were "insulators". By virtue of the above-referred-to explanation, they were excluded from item No. 15A and would fall under the residuary Item No. 68 of the old Tariff. In the revised Item No. 15A of the old Tariff, as inserted on 1-3-1982, Explanation II did not find place. We are, however, not concerned with this item for the present purposes.
Then came the New Tariff on 28-2-1986. Statutory Chapter Note 2(n) to Chapter 39 therein read as follows :- (n) Articles of Section XVI (machines and mechanical or electrical appliances)." It will thus be seen that electrical insulators and electrical insulating fittings which stood excluded from Item No. 15A of the old Tariff, stood excluded from Chapter 39 of the new Tariff also by virtue of Chapter Note 2(n). Therefore, the principle of the Bakelite Hylam decision viz. - that rigid laminated plastic sheets, identified as electrical insulators, did not fall under Item No. 15A of the old Tariff as plastic sheets equally applies to the new Tariff where they do not fall under Chapter 39 because the goods are still insulators (notwithstanding the change in the Tariff) which fall under Heading 85.46 in Chapter 85 of Section XVI and so, are excluded from Chapter 39. The Tariff changed but insulators still stood excluded from being classified as plastic sheets - earlier, because of Explanation H to Item 15A of the old Tariff and now, because of Chapter Note 2(n) to Chapter 39 of the new Tariff. Thus, the learned DR's submission in this behalf is not tenable.
10. Shri Sunder Rajan has referred to the Bombay High Court's judgment in Chemicals and Fibres of India Ltd. v. Union of India and Ors. 1982 (10) E.L.T. 917 in support of his contention that the expressions used in Item 15A of the old Tariff (and, by parity of reasoning, Chapter 39 of the new Tariff), being of a highly technical and scientific nature, should be construed not in their popular sense but in their scientific and technical sense. The High Court was referring to terms such as condensation, polycondensation, addition, polyaddition, polymerisation, co-polymerisation etc. occurring in sub-item (1) of Item 15A. What we are concerned with in the present case is not such scientific or technical terms but the term "electrical insulators", "rigid laminated sheets" etc. In construing these terms, we have relied on works of reference and the Indian Standard Institution's definitions. We do not see how the High Court's judgment advances the case of the Revenue.
11. The learned DR also referred to the Madras High Court judgment in Secretary, Ministry of Finance, Government of India v. W.S. Insulators of India, Madras 1983 (14) E.L.T. 2184 wherein it was held that porcelain insulators would not fall under Item No. 23B of the old Tariff. It was, therefore, that Items 23A, 23B and 15A of the old Tariff were amended so as to exclude insulators and insulating fittings from the scope of these items. This, of course, is the DR's submission because, on being questioned by the Bench, he could not produce any authority for this statement such as the Finance Minister's speech in introducing the amendment. Be that as it may, it is not clear how the judgment supports the case of the Revenue. In fact, the judgment goes against the Revenue. In that case, the goods were porcelain shells used in the manufacture of lightening arresters and the question was whether they were liable to duty under Item No. 23B of the old Tariff as Porcelainware, not otherwise specified. The Court referred to its earlier decision in English Electric Co. of India Ltd. v.Superintendent, Central Excise and Ors. 1979 (4) E.L.T. (J. 36) holding that High Rupturing Capacity Fuselinks were not porcelainware not elsewhere specified, merely because one of its components was made of porcelain. It was not porcelainware as commonly understood. Explanation II to Item 23B, introduced by the 1979 Finance Act, to the effect that the item did not include electrical insulators and insulating fittings also came in for mention but the Court held that the porcelain shells in question were not porcelainware without considering the explanation.
Perhaps, the point sought to be made is that but for the amendment, insulators and insulating fittings would have fallen under Item No. 15A of the old Tariff. But that was precisely the dispute in the Bakelite Hylam case (supra) and the Tribunal held that industrial laminates of plastics having electrical insulating properties would fall under Item No. 68 of the old Tariff. In the new Tariff, of course, Heading Nos.
85.46 and 85.47 are specific for insulators and insulating fittings.
12. According to Shri Sunder Rajan, the Tribunal has not, in the Bakelite Hylam case 1985 (22) E.L.T. 879 (para 19), followed the Supreme Court's judgment in Geep Flashlight Industries Ltd. v. Union of India and Ors. 1985 (22) E.L.T. 3 (SC) whereas it has been followed in its decision in C.C.E., Ahmedabad v. Melamine Fibre Board Ltd. and Ors.
1988 (36) E.L.T. 139 and Amit Polymers & Composites Ltd. v. C.C.E. 1989 (39) E.L.T. 674. Thus, according to Shri Sunder Rajan, there is a contradiction and the present appeal should be placed before a Larger Bench.
13. In para 19 of the Tribunal's decision in the Bakelite Hylam case (supra), it is clearly stated that the dispute therein could be resolved without going into the debate whether the ratio of the Supreme Court judgment in the Geep Flashlight case applied (according to the Department) or not (according to the appellants) because of the explanation II to Item 15A of the old Tariff. In the Melamine Fibre Board case (supra), the goods were laminated sheets paper-based made from paper (over 70% by weight) and a resin-foaming solution. The Tribunal, in coming to the conclusion that the said laminated sheets could not be construed as plastic sheets falling under Item No. 15A(2) of the old Tariff, relied inter alia on the observation in the Supreme Court's judgment in the Geep Flashlight case that articles made of plastics must be made wholly of the commodity commercially known as plastics and not from plastics along with other materials.
14. In the case of Amit Polymers & Composites Ltd. (supra), the goods were laminated paper or paper board formed by lamination of a core of resin impregnated paper with resin impregnated design-printed paper.
The finished product consisted of 30-40% resin (by weight and thickness) and the balance of paper. Though the S.C.'s judgment in the Geep Flashlight case was relied on by the appellants, it is seen that the Tribunal's conclusion was based on statutory Chapter Note 1(0 to Chapter 48 of the new Tariff according to which plastics should constitute more than half the total thickness.
15. In the light of what is stated above, we do not consider that there is any contradiction in the matter of application of the Supreme Court's judgment in the Geep Flashlight case and so no case for reference of the present appeal to a Larger Bench.
16. Another submission of Shri Sunder Rajan is that the Tribunal's decisions so far on industrial laminates would amount to rendering Heading 85.46 or 85.47 of the new Tariff nugatory. We do not see how this would be so. The two expressions "insulators" and "insulating fittings" could not have been used synonymously. In fact, Heading 85.47 relating to the latter contains a meaning of the term which would show that the heading covers ready-to-fit articles (fittings) for electrical machines, appliances or equipment.
17. Yet another submission of Shri Sunder Rajan is that the proper classification of the subject laminated plastic sheets is under Heading 39.20 of the new Tariff because that heading covers laminated sheets.
The words used are: "Other plates, sheets,..., of plastics, non-cellular, whether lacquered ... or laminated, supported or similarly combined with other materials or not." "Laminate", according to the Concise Oxford dictionary means "manufacture by placing layer on layer" and, according to the Chambers' dictionary "to make by putting layers together". It follows, in our view that first there must be a plastic sheet as it is generally known.
Then it may be laminated with a layer of other materials. In the present instance, the process of manufacture, as set out by the appellants and not controverted by Revenue, is that the base - paper or glass fabric - is passed through a resin bath which results in resin-impregnated paper or glass fabric. It is then passed through a drying chamber or oven. The treated material is cut according to sizes which are then placed one over the other in a parallel arrangement.
Heat and pressure are then applied consolidating the several layers into one mass which is finished by edge trimming as required. It may thus be seen that a plastic sheet, as such, does not come into existence in the process. Even in their reply dated 10-2-1987 to the show cause notice, the appellants had taken this stand. The Department has not negatived it. As the Counsel for the appellants has pointed out, this Tribunal in Hatim Dielectrics Pvt. Ltd. v. C.C.E., Calcutta 1985 (19) E.L.T. 621 has, after noting that glass fabric was treated with epoxy resin, observed that since plastic sheet, as it is generally known, did not seem to emerge as such in the process of manufacture, the question of placing the goods under Item No. 15A(2) (of the old Tariff) would not arise. The logic applies equally to the present case where, from the process of manufacture, it would be seen that it is not a plastic sheet which is getting laminated with other material but layers of resin-impregnated paper are getting laminated together. It is also relevant to note that the Tribunal in the case of Melamine Fibre Board Ltd. (supra), noted that there was no evidence to show that paper based laminated sheets, though products of the plastics industry, were known or traded as plastic sheets.
18. In this context, reference may usefully be made to the following passage from page 121, Vol. 8 of the "Encyclopaedia of Polymer Science and Technology" (page 231-274 of the Respondent's compilation) - "Laminates, as then- name suggests, consist of layers, or laminae, held together by a suitable binder. The laminae are usually materials such as paper or woven fabrics that are readily available in continuous sheet form. The binders are synthetic resins, frequently phenolic resins, that are solvent-coated onto the base laminae. After drying, several laminae are placed upon one another and the entire mass is consolidated under heat and pressure to form a rigid, infusible sheet or panel which may be used for its mechanical, electrical, chemical or esthetic qualities." "Three essential steps are necessary in the laminating process, although many auxiliary steps are desirable. The first operation consists of bringing the base into contact with the resin solution; this is called impregnation or coating. The next step is taken immediately, consisting of removing the solvent from the impregnated web; quite logically it is called drying. The combined operations of impregnation and drying are called treating. Following these operations, the treated material is cut into appropriate sheets which are generally placed upon each other in a parallel arrangement, whereupon heat and pressure are applied to consolidate them into a permanently bonded and infusible unitary mass. This final essential operation is called pressing or molding. Various auxiliary finishing operations are conducted as necessary." This shows that resin is a binder and it binds layers of materials such as paper or fabrics in sheet form. Therefore, the question of a plastic sheet, as such, being laminated with layers of other materials does not seem to arise. We have noted the process of manufacture of the subject goods. It also does not suggest the emergence of a plastic sheet which is then laminated with layers of other materials.
19. Reliance is placed by Shri Sunder Rajan, also on the Explanatory Notes under Chapter 39 of the C.C.C.N. (Customs Co-operative Council Nomenclature) and the Explanatory Notes under Chapter 39 of the H.S.N.(Harmonised System of Nomenclature). The new Tariff is essentially based on the latter nomenclature. The C.C.C.N. Notes under Chapter 39 state that Headings 39.01 to 39.06 include plates, sheets etc., provided they retain the essential character of products of artificial plastic material. Among the goods listed are products consisting of glass fibres or of layers of paper, impregnated with artificial resins and compressed together, provided they have a hard, rigid character.
But, the notes add, such products, if having more the character of paper or of articles of glass fibres, they are classified in Chapter 48 or 70, as the case may be. Notes to similar effect are found in the H.S.N, also. Two things have to be noted in this regard. First, it has been held repeatedly by this Tribunal that these Explanatory Notes are only an aid to understanding the scope of the headings but do not have binding force since they are not statutory. Second, even going by the Explanatory Notes, the industrial laminates we are concerned with have not been shown to have the essential character of articles of plastics.
It also appears to us that the learned Counsel for the appellants is right when he submits that the processes of lacquering, metallisation or lamination specified in Heading No. 39.20 are surface-working processes. In the instant case, as we have noted, the laminate is comprised of layers of resin-impregnated paper. Impregnation with resin is not the same thing as lamination with a layer of plastic.
20. Shri Sunder Rajan has also assailed the observation of the Tribunal in para 18 of its order in the Bakelite Hylam case (supra) to the effect that laminates are composite goods comprised of plastic material and other materials such as glass, paper. He contends that these are homogenous goods but does not cite any authority for the contention.
We, however, find from "The Condensed Chemical Dictionary'', 10th Edition, revised by Gessener G. Howley, that "laminate" is defined as "A composite made of any one of several types of thermosetting plastic (phenolic, polyester, epoxy, or silicone) bonded to paper, cloth, asbestos, wood or glass fibre. He also attacked this order for preferring the residual Item No. 68 to the more specific item of 15A.He cites the Supreme Court's judgment in the case of C.C.E. v. Jayant Oil Mills Pvt. Ltd. 1989 (40) E.L.T. 287 (SC) hi support of the submission that the specific item should be preferred to the general.
There cannot be any dispute about this cardinal principle of classification. In the Bakelite Hylam case, Explanation II (b) had, in the Tribunal's view, the effect of ruling out Item 15A of the old Tariff. In so far as the new Tariff is concerned, there is a specific heading for electrical insulators.
21. Shri Sunder Rajan has also referred to the Tribunal's decision in C. C, Bombay v. Wash Udyog Sawantwadi 1987 (31) E.L.T. 73 in support of his plea for classification of the unclad laminates under Heading 39.20. In that case, the goods were presspahn paper based laminated with polyester film. Though the plastic portion was the minor compartment in the laminate, the Tribunal found that the essential character of temperature resistance and higher degree of dielectric strength was due to the plastic component and, applying Interpretation Rule 3(b), classified the laminate under heading 39.01/06 of the Customs Tariff Schedule. In the present case, it has not been shown as to which component imparts to the laminate its essential character. In any event, we have found that the more specific heading is electrical insulators. The cited decision is of no assistance to the Revenue.
22. Though it does not seem necessary to dilate any further on the dispute, we would be doing injustice to the learned Departmental Representative and the Revenue if we do not advert to the submissions based on technical material filed before us.
23. The 'Technical Data sheet" of the appellants (pages 26-33 of the compilation submitted by the respondent), according to the DR, show that the goods are described by the process of manufacture and the material content rather than their insulating properties. The applications are shown as cross-bar switches, fan regulator, pulley, automobile equipment, structural part etc. In some cases, the mechanical properties are described. We note that some of these data sheets (pages 27 to 32) are in respect of copper-clad laminates or cotton fabric based laminates about which the Revenue has made no submissions. As for the rest, some of the sheets show the applications as for insulation purpose in electrical equipment. Some others show the applications as in distribution boards, transformer covers etc.
electrical equipments. The parameters with reference to electrical properties including insulation resistance are shown. These data sheets, if anything, go to show that the laminates are used for their electrical insulation properties.
24. Shri Sunder Rajan referred to Indian Standard IS: 2046-1969 (pages 35-50 of the compilation) and submits that the character of the laminate is more due to its, plastic than paper content. But, as Shri Sridharan points out, this standard is in respect of "Decorative Laminated sheets" - not in dispute in the instant case.
25. With respect to I.S.: 8765-1978 (pages 51-63 of the compilation), the DR submits that it brings out that ceramic bushings are insulators.
It also brings out the insulating property of ceramic. We do not follow the relevance of this document. There could be insulators cut to shape, size etc. There could also be, as in the Bakelite Hylam case, sheets requiring only some minor operations like drilling of holes to be carried out before use as insulators. It goes without saying that any insulator, ceramic or otherwise, must be made of material which has good insulating properties.
26. IS : 1885 (Part VI) 1978 (pages 65-75) is "Electro Technical Vocabulary". This part deals with Printed circuits. The laminates in dispute before us are not for use in printed circuits. This standard is, therefore, not relevant.
27. At pages 76-83 is IS: 1885 (Part LIV) -1980 - "Electro Technical Vocabulary - Insulators". "Insulator" is defined here as "A device intended to give flexible or rigid support to electrical conductors or equipment and to insulate these conductors or equipment from earth or from other conductors or equipment. The contention is that the subject goods do not conform to the definition. It may be seen that in the Bakelite Hylam case (supra), the definition of the term, essentially on the same lines, was considered by the Tribunal in para 24 of that order.
28. With reference to pages 84-91,92-107 - I.S.: 2036-1976 "Specification for phenolic laminated sheets" and I.S: 1998-6962 "Methods of Test for Thermosetting Synthetic Resin Bonded Laminated sheets", the submission is that, according to these standards, industrial laminates have different grades and end-uses. End-uses are varied: eg: bearing and gear manufacture, radio, switchgear. Some are for mechanical applications where electrical properties are of secondary importance. Some have good machining and punching properties.
Some possess very good electrical properties. While this may be so, the case of the Revenue is not advanced unless it is shown that the subject laminates are used not so much for their insulating as for other properties. On the basis of the relevant data sheet, we think that the appellants have shown that the laminates are used in electrical application calling for insulation properties. But the two above standards show that resin is used as a bonding medium i.e. as a binder ("impregnated or coated with a thermosetting resin binder"). This tends to confirm what we said earlier: there is no plastic sheet formation in the manufacture of the subject laminates.
29. At pages 108-197 are invoices and gate passes showing that the goods are sold as industrial laminates and not as insulators. We note that a similar submission was made by the DR in the Bakelite Hylam case (supra) but it did not find favour with the Tribunal. We would like to say that the term "insulator" is of wide import and a mere description "insulator" may not serve to bring out the true nature of the goods when insulators could be of diverse materials.
(a) pages 231-274 - Excerpts from Vol. 8 of "Encyclopaedia of Polymer Science and Technology" and pages 277-282 (excerpts from Vol. 13 of Krik-Othmer's "Encyclopaedia of Chemical Technology").
It is stated that industrial laminates are used for their electrical insulating character, impact strength, wearing quality or chemical resistance. The applications are almost endless. The exact purpose of this document is not clear. Perhaps it is to show that not all industrial laminates are insulators. This, of course, would be so.
Only such industrial laminates as have applns. mainly or primarily owing to their electrical insulating properties would be classifiable as electrical insulators under Hdg. 85.46 of the new Tariff.
This shows that the final resin content may range from 26 to 70% of the weight of the laminate. It is, therefore, submitted that the resin content cannot be the basis for classification of laminates.
We may note that our view on the classification of the subject laminates is not based on their resin content but on other considerations discussed earlier.
(c) pages 283-290 ("Hand book of Industrial Material" - First Edition).
This shows that industrial laminates are known also as laminated plastics. The argument appears to be, therefore, that the subject laminates should fall under Chapter 39 relating to plastics. But, we have already noted, these laminates are not laminated plastic sheets - in fact, plastic sheets do not emerge in the manufacturing process. So, Chapter 39 would be inapt.
31. Some more documents have been placed in the compilation. We do not consider it necessary to touch upon all of them because they do not seem to throw any fresh tight on the dispute.
32. We now turn to copper-clad paper based laminates and copper-clad glass fabric based laminates. The lower authority has classified the goods under sub-heading Nos. 3920.31 and 7014.00 respectively. The appellants' contention before us is that these fall under heading No.74.06 which reads - These, according to them, are exclusively used for making Printed Circuit Boards and the copper foil gives the product its essential character.
33. Reliance is placed by the learned Counsel for the appellants on Para 12 of the Tribunal's decision in the case of Metro Wood Engineering Works and Others (supra). Therein, the Tribunal after considering Statutory Note l(viii) to Chapter 74 and other authorities, concluded that copper clad laminates were classifiable as copper foil under sub-heading No. 7406.00. It appears from the Board's F.No.93/105/86-CX. 3, dated 31-12-1986 (copy filed by the appellants) that the Board's understanding is also the same: it says that copper clad glass fabrics reinforced laminates would appropriately be classifiable under Chapter 74 along with copper plates, sheets, coils, as the case may be.
34. The Revenue has not made before us any submissions against classification of copper clad laminates under heading No. 7406.00 of the new Tariff.
35. In the result, we follow the Tribunal's decision in the Metro Wood Engineering Works case and order classification of the copper clad laminates manufactured by the appellants under sub-heading No. 7406.00 of the new Tariff.
36. Shri Sridharan has also submitted that the Assistant Collector lacked jurisdiction to adjudicate the show cause notice dated 1-9-1986.
He drew our attention to the earlier notice dated 19-4-1986 issued by the Assistant Collector proposing classification of all types of laminates, clad or unclad, under sub-heading No. 3920.31. After hearing the appellants, the Assistant Collector had ordered classification under heading No. 85.46 and the classification list effective from 1-3-1986 was approved on 30-5-1986. The Collector could have, but did not exercise his powers under Section 35E(2) of the Central Excises and Salt Act and directed the Assistant Collector to file an application to the Collector (Appeals) against the earlier order of approval. This not having been done, the Assistant Collector's order of approval dated 30-5-1986 had acquired finality. The Assistant Collector had, therefore, no jurisdiction to issue the show cause notice dated 1-9-1986 seeking to modify the earlier order of approval. This notice is also assailed on another count. It alleges wilful-mis-statement and suppression of facts on the part of the appellants. The basis for the allegation is this. The appellants, in their attempt to classify copper clad and copper unclad paper based/glass fabric based laminates under sub-heading 8546.00, had tried to mis-represent the ratio of this Tribunal's decision in 1985 (22) E.L.T. 879 in the case of Bakelite Hylam (supra) as applicable to the present dispute which arose after the new Tariff came into force whereas the Bakellte Hylam decision had been rendered in the context of the old Tariff. The description of the goods in the classification list was incomplete : it was only "Electrical insulators paper/fabric/glass based" instead of using the words "Industrial laminates". Though the period for which demand was made was only six months preceding the date of the show cause notice, the Asstt. Collr. was incompetent to issue the notice since the Collector alone could have issued the notice alleging wilful mis-statement, suppression of facts etc.
37. The learned DR countered the above contentions by submitting that though the Assistant Collector, in his notice dated 1-9-1986, alleged suppression and mis-statement, he did not invoke the proviso to Section 11A(1) of the Central Excises and Salt Act. The period of demand was also not the extended period but the normal limitation of six months.
Hence, submitted the DR, the Assistant Collector was competent to adjudicate the notice.
38. We are unable to agree with the Revenue's contentions. Section 11A(1) makes a clear distinction between cases where short-levy has arisen by reason of fraud, collusion or any wilful mis-statement or suppression of facts, and cases where short-levy is due to other reasons. In the latter case, the notice may be issued by any Central Excise officer. In the former cases, however, with the amendment, effective from 15-11-80, by Section 21 of the Customs, Central Excises and Salt and Central Boards of Revenue (Amendment) Act, 1978, the notice has to be issued by the Collector. This statutory requirement does not get whittled down by the fact that the demand is made only for the normal period of 6 months and not the extended period. In this view, the show cause notice dated 1-9-86 is incompetent and without jurisdiction and the orders following the said notice are bad on that account and have to be, and are, struck down on that score.Copper clad laminates, whether glass fabric based or Heading 74.06 of thepaper based - new TariffUnclad laminates, whether glass fabric based or paper Heading 85.46 of thebased - new Tariff.
The above classification under Heading 85.46 will apply to only industrial laminates having applications primarily or mainly attributable to their electrical insulating properties. Thus, both on merits and jurisdiction, the appellants succeed. The appeal is allowed with consequential relief to the appellants.