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TMI Blog1995 (5) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... d other high temperature resisting material). They are composite goods comprising of either a sheet of temperature resisting paper (popularly known as Presspahn) which is coated on one side with a thin layer of polyester film or 2 layers of presspahn in which a polyester film is inserted for rigidity and added insulation. These goods are used to provide insulation against the high temperature generated in the coils of electric motors. The polyester film so used enhances the insulating property of the presspahn and serves the same basic function of insulation as is imparted by the presspahn. 2.The goods were subjected to duty under Heading 39.01/06 C.T.A. with countervailing duty under T.I. 17(2) CET. The appellant paid the duty. Subsequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erials the goods were to be treated as resin or plastic material covered by Entry 39. The Tribunal, however, while classifying the goods under Heading 39.01/06 held that so far the countervailing duty was concerned it was leviable under Item 68 of the Customs Tariff. The appellant is aggrieved by the classification of goods under Heading 39 whereas the Department is aggrieved by levy of countervailing duty under Item 68 instead of 17. 3.Taking up the appeals of the importer, the dispute is whether Class E and other high temperature resisting material could be subjected to duty under Chapter 39 or Chapter 48 of the Schedule of Customs Act. The controversy has been subject matter of three decisions by the Tribunal, two in Sunrise Electric Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey owed their essential characteristic of electrical insulation to the plastic portion than to the paper backing. Further, according to the Tribunal, E-Class insulating material must possess temperature resistance of 120 degree C plus higher degree of dielectric strength etc. Presspahn paper or board was not capable of giving insulation of such high degree. The Tribunal held that such high degree of insulation in `E' Class material came only from the plastic portion of the goods, therefore, the presspahn paper or board even though impregnated could not become insulating material in the notification. The Tribunal held : - "Thus, it is not the bulk but the property of giving the essential character which is the criterion applicable to the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ths as desired. The insulation of electric circuits is a necessary requirement for the successful operation of all electrical apparatus". The purpose of insulating material is to form a barrier between energized parts of an electrical circuit. Various types of materials are used as insulation. Paper is one of them. In the same Volume of Encyclopedia Britanica it is mentioned that, "paper is used to insulate the small wires of telephone cables and the conductors of high-voltage power cables; in the latter case the paper is impregnated with insulating oil to improve the quality of the insulation". In the material in dispute, paper is impregnated with plastic to provide it rigidity and toughness. Since it is used in high-voltage electric mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esins such as condensation, polycondensation, polyaddition, polymerisation and copolymerisation products; artificial plastic materials, silicones; natural resins modified by fusion or esterification such as runs gums or ester gums; regenerated cellulose; chemical derivatives of cellulose; vulcanised fibre; hardened proteins; chemical derivatives of natural rubber; other high polymers (including alginic acid, its salts and esters); linoxyn. 100% There is nothing either in the notes or in the heading of 39.01/06 to suggest that it applies to paper coated with plastic. In fact the word such as to amplify the words `artificial resin' in the heading has not been used before artificial plastic material. Read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were 10 mils as compared to the plastic which was 1 mils but held that the goods could not be classified on basis of predominant content but on the basis as to which of the component gave the essential character. It is not necessary to decide whether this reasoning is well founded or not as what was lost sight of by the Tribunal was that the notes to Chapter 48 mentioned that the Chapter did not cover certain items, one of them being mentioned at (e) read as under :- "paper-reinforced stratified artificial plastic sheeting, or vulcanised fibre or articles of such materials (Chapter 39)". The effect of note (e) was two-fold, one that it excluded such papers which were coated with plastic or laminated with polyester film from Heading 48 an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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