ORDER
I.J. Rao, Member (T)
1. The appellants manufacture and clear bakalised paper tubes for ring spinning. These arc also known as bobbins. The process of manufacture as recorded by the Assistant Collector is as follows :
“Paper purchased from the market is cut into required width and roiled on machine. This results into paper in the tube shape. These paper tubes there go through a chemical treatment which hardens the tube. These hardened tubes are then given a coating of resin or paint. Steel rings are then fixed oh one end or both the ends, depending on the requirements of the customers. The resultant product is known as bakalised paper tubes for ring spinning (bobbins).”
2. The use of the tubes (bobbins) is for ring spinning in textile spinning frames to draw and wind the yarn over it.
3. The appellants filed a classification list claiming classification of their goods under TI 17(3) CET with benefit of exemption Notification No. 66/82-CE. Show cause notices were issued to the appellants asking them to show cause why the goods should not be classified under TI-68 and the differentia’ duty demanded for the periods 1-7-1984 to 11-9-1984 (Appeal No. E/396/87-C), 12-9-1984 to 28-2-1975 (Appeal No. E/816/86-C) and 1-3-1085 to 19-8-1985 (E/817/86-C).
4. After considering the replies of the appellants and hearing them the impugned orders reclassifying the goods under TI-68 and demanding duty were passed by the authorities.
5. We heard Shri Chidambaram, the learned Consultant in the 3 appeals which were heard together. He submitted that the goods were to be classified under TI 17(3) only and gave the following reasons :
(i) IS-3625-83 refers to the goods as paper tubes. The learned Consultant submitted that this reference indicated the common parlance in relation to the goods;
(ii) While admitting that in some cases the bobbins were equipped with rings the learned Consultant argued that to qualify classification as articles of paper TI 17(3) it was not necessary that the goods should be exclusively of paper. The learned Consultant cited case law in support of his arguments. Shri Chidambaram, the learned Consultant relied on a letter dated 5-7-1983 from the Ministry of Finance to All India Paper Tubes and Cones Manufacturers’ Association.
6. Shri S. Chakraborty, the learned DR opposing the arguments submitted that in the first instance, that these proceedings related to bobbins with steel rings only. However, on further verification it was found that both varieties of bobbins i.e. with and without tin sheets, are involved in these proceedings.
7. The learned representative argued that the goods in question are composite articles consisting of paper and other materials and, therefore, do not come under TI 17(3) or (4) of CET. To support his arguments the learned representative relied on a judgment of the Tribunal in Fibre Foils (P) Ltd. v. Collector of Central Excise, Bombay [1988 (36) ELT 174 (Tribunal)]. Shri Chakraborty argued that the goods in question lose their identity as paper and were parts of accessories of a spinning machine. Therefore, according to him the basic nature of the goods was that of a part of the textile machinery and not that of an article of paper. Referring to Ministry’s letter dated 5-7-1983 Shri Chakraborty, DR, submitted that the letter did not refer to bobbins in question but only to paper cones and tubes used as packing containers. Shri Chakraborty further submitted that the IS specification relied on by the learned Consultant covered paper tubes and not bobbins which are the subject matter here.
8. We have considered the submissions of both sides. Notification No. 66/82-CE the benefit of which the appellants are seeking exempts articles of paper or paper board falling under TI 17(3) CET. Therefore, the question is whether the bobbins manufactured by the appellants can be considered as articles of paper or paper board classifiable under the said item.
9. We examined Tariff Advice 18/84, dated 21-4-1984, Trade Notice 97/84 (Madurai), Trade Notice 98/84 (Madurai dated 19-10-1984) and the Ministry’s letter to All India Paper Tubes and Cone Manufacturers’ Association, Bombay dated 5-7-1983 Copies of which were filed by the learned Advocate. All these relate to paper cones and paper tubes. The Ministry’s letter even specifies that these are packing containers of the type known as paper cones and tubes. The articles before us are bobbins made for textile machinery Therefore, as submitted by the learned DR, these documents do not support the appellants’ case in any manner.
10. The other part of Shri Chidambaram’s argument was that an article of paper need not necessarily be made only of paper. His reliance on Union of India v. TISCO (Judgment dated 17-12-1975) is relevant for the proposition. But the proposition is not relevant for the facts before us. This is so because everything made of paper cannot be termed as a paper product only. A watch or a cup-board made of stainless steel does not remain as an article of stainless, but is something else.
11. On common parlance test the learned Consultant relied on ISI specification 3625-83. This specification refers to paper tubes which are different from the bobbins manufactured by the appellants. Apart from this, in the facts of this matter and for the reasons which will be clear in the following paragraphs the ISI specification cannot serve as a guide to classification of the articles in question.
12. Taking up of the question of trade parlance first it has not been the case of the appellants that the articles in question are known as paper products. They are not sold by paper manufacturers and not purchased by users of paper manufactures. These are used for ring spinning and should be available only with dealers who deal with such goods and not with dealers who deal with paper in general.
13. More important is the basic character of the goods. They are exclusively in use in ring spinning units. They being made of paper is only incidental and subject to technological necessities, they can be made of any other substance. Going by their basic character they cannot fall under TI-17. The essential character of the article being that of machine parts and not of paper products, their classification must accordingly be made under TI-68 and not under any of the other items. This view would be strengthened to the relevant extent by the following judgments :
1. Indian Textile Paper Tube Company Ltd. v. Collector of Central Excise, Madurai -1984 (18) ELT 35 (Tribunal)
2. Fibre Foils (P) Ltd. v. Collector of Central Excise, Bombay – 1988 (36) ELT 174 (Tribunal)
The learned Consultant’s argument that Chapter 48 HSN (Paper) covers bobbins, spools mentioned is only to be dismissed because that entry is in a different tariff and cannot be brought in to interpret the tariff as it existed at the relevant time.
14. We dismiss the three appeals.
