TMI Blog1994 (11) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, the second Member expressed the view that the matter needed to be referred to a larger Bench since in the case of NDDB the Tribunal had not considered the effect of definition of `Foil' given in Note 1(viii) to Chapter 76 of the Central Excise Tariff Act, 1985. The point of difference between the two Members was referred by the Hon'ble President to a third Member. Thereafter, having regard to the majority opinion this Larger Bench was constituted by the Hon'ble President. 2.On behalf of the appellants Shri D.A. Dave, ld. advocate with Shri V.H. Shah, Consultant appeared before us. Shri Dave stated that in the case of NDDB the Tribunal had noted that the corstituents of the product being Base paper 265 gms. per sq. mtrs, Aluminium Foil 18 gms. per sq. mtr. and Polyethylene (LD) 103 gms per sq. mtr., its classification under Chapter 48 was not ruled out by notes I(f) and I(m) of Chapter 48 since Note (f) deals with composition of paper and plastic with predominance of plastic and Note (m) applies only when metal foil is backed with paper or paper-board. He added that in that case the Tribunal had observed that in order to decide the question whether the goods were covered by C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not applicable in the present case since in the order recorded by Member (Judicial) he had not taken into account the effect of Note 1(viii) to Chapter 76 of the relevant Central Excise Tariff. He submitted that in manufacturing the product in question the first step involves the printing of paper roll and lamination of the printed side with polymer. Thereafter the other side of the paper is laminated with an aluminium foil coated with polyethylene. He contended that in the manufacture of the product aluminium foil backed with polyethylene comes separately into existence. In this regard he referred to the report of the Chemical Examiner at page 181 of the paper book according to which the tested product was found to be aluminium foil backed on one side with paper and on the other side with polyethylene film. He contended that the product thus clearly fits into the definition of aluminium foil as occurring in the relevant Note to Chapter 76 of the Tariff. He stated that classification of the product in question under Chapter 39 was ruled out in terms of Note 1(f) to Chapter 48. He added that in terms of Note 1(f) to Chapter 48 of the Central Excise Tariff which corresponds Note 1(m) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants' case is that the question of classification of the product in question had been settled by the Tribunal's decision in the case of NDDB v. Collector of Customs (supra) in which imported `Tetra Pack Asceptic packaging material' having composition similar to the appellants' product was held as classifiable under sub-heading 4811.29. In that case having regard to the composition of the material in question, the purpose served by each of the constituents, the relevant Notes to Chapter 48 of the Customs Tariff, the Tribunal had held that the most appropriate heading applicable to the goods was determinable in terms of Rule 3(a) of the Rules for the Interpretation of the Customs Tariff Schedule and paper being by far the major constituent in terms of weight it had to be deemed as providing the essential character to the goods. For proper appreciation of the considerations which weighed with the Tribunal in arriving at the finding that the product in question was classifiable under sub-heading 4911.29 we refer to paras 6 to 12A of the said decision which are reproduced below :- ****** 6.It is seen that there is no dispute that the product in question being a composite article ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Heading 76.06. In order to appreciate the point made on behalf of the Department we refer to Note 1(f) of the Chapter 48, Note 1(viii) of Chapter 76 and Heading 76.06 of the Central Excise Tariff which are reproduced below :- "Chapter 48 Paper and Paper Board; Articles of Paper Pulp, of Paper and or of Paper Board. This Chapter does not conver 1. Notes : ............... ............... ....................... ....................... Metal foil backed with paper or paper board (Section (1) XV);" "Chapter 76 Aluminium and Articles thereof : Notes In this Chapter, the following expressions have the meanings 1. thereby assigned to them :- ............. ............ ............ ........... (viii) Foil : A flat product of rectangular section of thickness excluding any backing not exceeding 0.15 millimetre, whether or not embossed, cut to shape, perforated, coated, printed or backed with paper, paper board, plastics or other reinforcing materials:" Heading No. Sub-heading No. Description of goods 1 2 3 76.06 7606.00 Aluminium foil 9.It is seen that the production of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Item No. 27(c) once again in respect of the process of backing of duty paid aluminium foils with plain or printed paper, held that backing of aluminium foil with printed paper is carried out only to make it more attractive for packing and does not result in any distinct or different article. 12.It has been held by the Tribunal in the case of Rajasthan Synthetic Industries Ltd. v. Collector of Central Excise reported in 1989 (42) E.L.T. 24 that in terms of the Rules of Interpretation of the Excise Tariff Schedule classification has to be determined according to the terms of the headings and relative Section or Chapter Notes and the Rules of interpretation can come into play and can be invoked if only the classification cannot be determined according to the terms of the headings and any relative Section or Chapter Notes and provided such headings or Notes do not otherwise require. Para 19 of the said order being relevant is reproduced below : - According to Rule 1 of the Rules for the Interpretation of"19. the Excise Tariff Schedule, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd and aluminium foil it can be looked upon in two ways : (1) an article of paper/paper board laminated with polythene and aluminium foil or (ii) an article made of aluminium foil laminated with polythene and paper board. 16.Under the circumstances we are required to refer to the chapter notes and headings as well as interpretative rules. The headings and relative section or chapter notes are of course required to be considered in the first instance but where a problem of interpretation arises the rules of interpretation can, my opinion, be simultaneously invoked. It is noteworthy that these rules are called general rules for the interpretation of this Schedule - and the Schedule includes sections, chapters, headings and sub-headings. In fact there is no alternative but to invoke them particularly in case where goods are prima facie classifiable under two or more headings. 17.However, it is nobody's case that these rules of the interpretation cannot be or should not be invoked or applied in this case (and apart from referring to the headings and the relevant notes) the contending parties have mainly argued for or against the applicability of Rule 1 vis-a-vis Rule 3. 18.In my ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the paper board contribute to some quality or property of the product. As rightly observed in the case of NDDB and reiterated before us "the aluminium foil laminate is used to achieve : (a) A gas barrier towards oxygen and water vapour; (b) High light barrier; (c) Use of induction heading for transversal sealing. The foil is laminated to the paper and coated with polyethylene." 23.At the same time technical literature further discloses that polythelene is applied for any of the following reasons :- to protect paper and alufoil from outside moisture and(i) product to bond alufoil and paper/paper board(ii) to produce a liquid tight seal for example longitudinal or(iii) transfer seal on a pack. to act as a barrier against bacteria and on the basis of the(iv) technical literature the appellants have contended there the goods were asceptic packaging material. 24.The fact that paper/paper board provided the bulk support is also not in doubt or dispute. The department has not produced any technical or other literature to show that of the three materials of which the article is com- posed of, the aluminium is the most important/or provides the essential character although Ld. D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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