ORDER
G. Sankaran, Member (T)
1. The captioned appeal was initially filed before the Central Government as a revision application which, Under Section 35-P of the Central Excises and Salt Act, 1944, has come as transferred proceedings to this Tribunal for disposal as if it were an appeal filed before it.
2. The issue falling for determination in the present appeal is the correct classification under the First Schedule to the Central Excises and Salt Act, 1944 (CET, for short) of rigid plastic laminated sheets and boards manufactured by the appellants under the trade names “Hylam” industrial laminates and “Hyglas” electrical grade sheets in various thicknesses, sizes and colours. The appellants claimed classification of the goods under the residual heading- item 68, CET-which was rejected by the lower authorities who classified them as “articles of plastics” under item 15A(2), CET.
3. Item No. 15A, CET, as it stood at the material time, read as follows :
“15A. Artificial or synthetic resins and plastic materials and cellulose esters and ethers, and articles thereof:-
(1) The following artificial or synthetic resins and plastic materials, and cellulose esters and ethers, in any form, whether solid, liquid or pasty, or as powder, granules or flakes, or in the form of moulding powders, namely :
(i) * * * * (ii) * * * * (iii) * * * * (2) Articles made of plastics, all sorts, including tubes, rods, sheets, foils, sticks, other rectangular or profile shapes, whether laminated or not, and whether rigid or flexible, including layflat tubings and polyvinyl chloride sheets, not otherwise specified. (3) * * * * * (4) * * * * * Explanation I.-For the purpose of sub-item (2), "plastics" means the various artificial or synthetic resins or plastic material or cellulose esters and ethers included in sub-item (1). Explanation II.-This item does not include- (a) Polyester films; (b) electrical insulators or electrical insulating fittings or parts of such insulators or insulating fittings."
4. The Assistant Collector had, pending finalisation of the classification dispute, permitted the goods to be cleared under item 68, CET on a provisional basis. The appellants’ contention was that the subject goods were electrical insulators or electrical insulation fittings and so were excluded from the scope of item 15A, CET by Explanation II to the said item. Apparently, thefinalisation of the dispute was taking time. At the request of the appellants, the Assistant Collector permitted them to clear the goods on payment of duty under item 15A(2) on provisional basis pending finalisation of the assessment. After holding adjudication proceedings, the Assistant Collector passed an order dated 5-6-1981 holding 26 grades of rigid plastic laminated sheets manufactured by the appellants as classifiable under item 15A(2) since they were not, in his view, electrical insulators or insulating fittings or parts thereof. The matter was pursued in appeal. While not disputing the capability of the subject goods as insulator fittings, the Appellate Collector, by his order dated 4-8-1981, held that the subject goods were only raw material and could become insulators or fittings only after they were given proper shape by drilling, threading, filing, grooving, etc. He confirmed the classification under item 15A(2), CET. It is against this order that the appellants are now before us.
5. At the outset, Shri J.R. Gagrat, learned Counsel for the Appellants, submitted that item 15A, CET had been interpreted by the Supreme Court in its judgment dated 10-8-1984 on Special Leave Petition No. 654/81-1984 (2) SCAL 380 by which the Court confirmed the Allahabad High Court judgment in Geep Flashlight Industries Ltd. v. Union of India and Ors. -1985 (19) E.L.T. 68. The ratio of the decision was that an article of plastics to fall under item 15A(2), CET, must be made wholly of the materials specified in item 15A(1) and that the end-use of the article was immaterial. Therefore, in so far as the present case was concerned, the controversy regarding Explanation II to item 15A had ceased to be relevant.
6. If, however, it was held that item 15A applied, Shri Gagrat argued with reference to Explanation II(b) to item 15A, in any event, the term “insulators” was wide enough to cover material having electrical insulation properties ; the material need not necessarily be of designated shapes or sizes. Glass, plastics, etc. were insulating materials but what the appellants manufactured were insulators out of these insulating materials. Indian Standards Specification I.S.: 1885/I/1961 defined “insulating materials” and “insulators”. These definitions supported the appellants’ contention. The goods were cleared not in running lengths but in the required thicknesses and sizes. They did not require any further processing. They were sold as laminates and not as articles of plastics.
7. Continuing, Shri Gagrat referred to Board’s Tariff Advice No. 282/81 which clearly said that laminated plastic sheets having electrical insulating properties would be out of the scope of item 15A and would fall under item 68.
8. In the alternative, Shri Gagrat pleaded, the subject goods were composite goods. The Tribunal had held in Atul Glass Industries (I) Ltd. v. Collector of Central Excise, Delhi-1984 (17) E.L.T. 585, Indian Textile Paper Tube Co. Ltd. v. Collector of Central Excise, Madras-1984 E.L.T. 1509, and Kasturi and Sons Ltd., Madras v. Collector of Customs, Madras-1985 (19) E.L.T. 183, that composite articles would be classifiable under item 68, CET. Applying the ratio of these decisions, the present goods would also fall under item 68.
9. Smt. Vijay Zutshi, learned Senior Departmental Representative, on behalf of the Respondent, opened her arguments by submitting that the Supreme Court decision in the Geep Flashlight case (supra) was on a particular product-torch bodies. The goods in the present case were different. As laid down by the Supreme Court in the Dunlop case-1983 E.L.T. 1566-one had to go by the commercial parlance test. The appellants themselves called the goods laminated plastic sheets. The certificates produced by the appellants did not describe the goods as insulators or insulating fittings but as laminated sheets. The certificates also said the sheets required to be further fabricated before use. This position was admitted by the appellants in their reply to the show cause notice. It was not correct, therefore, to say that they could be put to direct use. It was true that the sheets had insulating properties but that alone would not justify them to be called “insulators” or “insulating fittings”. It is well settled law that the Board’s Tariff Advices had no binding effect.
10. The very wording of item 15A clearly spelt out sheets, whether laminated or not. The goods, therefore, squarely fell under that item.
11. Smt. Vijay Zutshi then referred to a prodigous amount of technical literature in support of her contention that electrical grades of plastic sheets were recognised as laminated plastic sheets. Such sheets were described in books on plastics. “Insulators” were not bare sheets but sheets subjected to certain machining operations such as punching and drilling.
12. Thus, from the point of view of commercial parlance, specific tariff description and technical understanding, plastic laminated sheets fell under item 15A, according to Smt. Zutshi. Item 15A was a technically and scientifically worded item and should be construed according to the scientific and technical sense of the words employed therein. This was the ratio of the Bombay High Court decision in Chemicals and Fibres of India case-1982 E.L.T. 917.
13. Adverting to the Allahabad High Court decision in the Geep Flashlight case-1985 (19) E.L.T. 68-Smt. Zutshi said that torch body could not be and was not spoken of as a plastic tube. Torch body had an identity of its own. Besides, item 15A(2) articles were not wholly made out of the materials described in item 15A(1): besides resins, plasticisers, fillers, etc. were a must.
14. The Tribunal decision in the Kasturi and Sons case (supra) had no application here. In that case, one of the layers comprising the printing plate was made of photosensitive nylon resin itself. Printing plates, again, had an identity of their own.
15. Similarly, said Smt. Zutshi, windscreens had a definite identity as motor vehicle parts. So, the Tribunal decision in the Atul Glass case (supra) had no application here. The same was the case with the Tribunal decision in the Indian Textile Paper Tube Co. case (supra).
16. According to the I.S.I, definition, insulating material would need to be fabricated to make it into an insulator. The present goods were, therefore, not insulators. They were merely insulating material.
17. Shri Gagrat, in reply, reiterated that in the Geep Flashlight case (supra), the Supreme Court, besides deciding on the classification of torch bodies, laid down a principle of general application. It was that an article, to fall under item 15A(2), must be made wholly of the materials specified in item 15A(1). Apart from this, the Tribunal decisions relied on by him supported his contention that, as composite articles, the present goods fell under item 68.
18. We have carefully considered the submissions of both sides. There is no dispute on certain basic features of the goods. First, they are composite goods comprised of plastic material falling under item 15A(1) and other materials such as glass, paper. Second, the laminated sheets have electrical insulating properties. The Respondent’s contention is that the goods are plastic laminated sheets falling under item 15A(2) while the appellants’ contention is that they do not fall under item 15A(2) because they are not wholly made of the materials specified in item 15A(1) and further they, being insulators or insulating fittings, are excluded from the item by virtue of Explanation II(b).
19. In the Geep Flashlight case before Allahabad High Court and later the Supreme Court, the goods under consideration were torch bodies which, following the commercial parlance test and the test that articles made of plastics meant articles made wholly of the commodity commercially known as plastics and not articles made from plastics along with other materials, the Court ruled was not an article of plastics. The goods in the case before us are plastic laminated sheets and boards according to the Department and insulators or insulating fittings according to the appellants. While the former has urged that the ratio of the Supreme Court decision does not apply to the present goods, the latter urges that it does. We, however, think the present dispute can be resolved without going into this debate. If the goods are insulators or insulator fittings, as contended by the appellants, they will be out of the scope of item 15A by virtue of the Explanation II(b). We shall, therefore, discuss this aspect of the dispute.
20. The appellants have strenuously argued that the laminated plastic sheets manufactured by them are insulators or insulating fittings since they require only minor fabrication such as drilling of holes to make them fit into the electrical equipment. The Department, on the other hand, strenuously argues that these are nothing but sheets in length and not insulators cut to the required shapes and sizes. The Department has further tried to argue that the subject goods are only insulating material.
21. The word “insulator” has been explained at page 563 of Hawley’s Condensed Chemical Dictionary as follows :
“Any substance or mixture that has an extremely low dielectric constant, low thermal conductivity, or both. Electrical insulators are either solid or liquid, the latter being used in transformers (askarel, mineral oils, silicone oils). A wide variety of solid types includes porcelains, glass, mica, alumina, various high polymers (epoxies, polyethylene, polystyrene, phenolics), cellulosic materials, nylon and silicone resins. All these may be used alone or combined with other insulators as composites. See alsa dielectric ; transformer oil.
Thermal insulators comprise an equally broad range of materials. Such inorganics as mineral fibres, magnesia, aluminium silicate, cellulose and glass fibres are widely used for steam and hot-water pipes, furnaces, and blown-in home insulation. Organic products that are effective include plastic foams (polyurethane, polyvinyl chloride, polystyrene) and cellular rubber. There are a number of materials that may be called double insulators, since they have both electrical and thermal insulating properties, e.g., polystyrene, PVC, cellulose, glass, magnesia and aluminium silicate,”
The following is extracted from pages 397-398 of the Materials Handbook, 11th edition, by George S. Brady and Henry R. Clauser :
“Any materials that retard the flow of electricity, used to prevent the passage or escape of electric current from conductors. No materials are absolute nonconductors ; those rating lowest on the scale of conductivity are therefore the best insulators. An important requirement of a good insulator is that it not absorbs moisture which would lower its resistivity. Glass and porcelain are the most common line insulators because of low cost. Pure silica glass has an average dielectric strength of 500 volts per mil, and glass-bonded mica about 450 volts per mil, while ordinary porcelain may be as low as 200 volts per mil, and steatite about 240 volts per mil. Slate, steatite, and stone slabs are still used for panel-boards, but there is now a great variety of insulating boards made by compressing glass fibres, quartz, or minerals with binders, or standard laminated plastics of good dielectric strength may be used…Synthetic rubbers and plastics have now replaced natural rubber for wire insulation, but some aluminium conductors are insulated only with an anodized coating of aluminium oxide. Wires to be coated with an organic insulator may first be treated with hydrogen fluoride, giving a coating of copper fluoride on copper wire and aluminium fluoride on aluminum wire. The thin film of fluoride has high dielectric strength and heat resistance.”…
22. It follows from the above definitions that an article made from materials which have electrically insulating properties can be appropriately described as an insulator. There is no dispute about the fact that the laminated plastic sheets under consideration in the present appeal are such that can be used for their insulating property in electrical equipment. There does not seem to be any good reason why these sheets cannot be said to be insulators. The fact that some minor fabrication such as punching or drilling of holes has to be undertaken on the sheets would not detract from this position. As such, these sheets should qualify to be called insulators and, therefore, would go out of the purview of item 15A by virtue of the Explanation II(b).
23. That this is the Board’s understanding also is shown by its Tariff Advice No. 123/81, dated 23-11-1981 (copy at page 46 of the appellants’ paper book) which says that industrial laminated sheets which have electrical properties only are covered by Explanation II(b) to item 15A.
24. IS : 1885 (Part I)-1961 (Second re-print 1980) (“Electrotechnical Vocabulary-Fundamental Definitions”) defines “insulating material” and “insulator” thus :
“7.33 Insulating Material-I-nsulant-A substance or body, the conductivity of which is zero, or, in practice, very small.”
“16.10 Insulator-An element used to insulate a conductor or apparatus and generally as a support.”
“Plastics Dictionary” by Thomas A. Dickinson says:-
“Insulator-a material or substance that interrupts the communication of heat or electricity to surrounding objects,”
We do not see anything in the above definitions which militates against the view we have expressed earlier.
25. The extracts from technical literature produced by Smt. Zutshi do not, in our view, advance the case of the Respondent. They describe the process of lamination, different types of laminated sheets, etc. But they do not contain anything which would help us to distinguish between “insulators” and “insulating fittings”. Perhaps, it may be possible to say in the light of the above-cited definitions that insulating fittings should be ready-to-fit articles. That, however, does not seem to be the case with insulators. Both could not have been used synonymously. We do not see why rigid plastic laminated sheets made out of electrically insulating material, viz. plastics, paper, glass, etc., should not be said to be “insulators”, if not “insulating fittings”.
26. In the above view of the matter, we do not think it necessary to consider and discuss the other contentions raised before us.
27. In the result, the impugned order is set aside with consequential relief to the appellants.
