ORDER
P.C. Jain, Member (T)
1. Since common issues of classification are involved in all the appeals under consideration, a common order is being passed.
2. Main appeal is the one given the No. 2097/84-C which decides the question of classification of a product known as composite containers. The appellant seeks to classify the said product under T.I. 17(4)/17(3) after 1983 Budget and thus avail the benefit of Notification 66/82 dated 28-2-1982 as amended by Notification 151/83 dated 13-5-1983. On the other hand, the department has classified the said product under T.I. 68 of Central Excise Tariff as it then stood. The other appeals pertain to the refund claims of duty paid by the appellant in terms of the department’s classification under Tariff Item 68.
3. Learned advocate for the appellant Shri P.A.S. Rao has conceded at the outset that there is a decision of the Tribunal in the case of Indian Textile Paper Tube Co. v. Collector of Central Excise – 1984 (18) E.L.T. 35 which is against the appellant. The goods under classification in the said decision of the Tribunal are identical to the goods under consideration in these appeals. He has also pointed out that the said decision of the Tribunal has been confirmed by the Supreme Court at the admission stage itself in the Civil appeal No. 3650 of 1984 filed by the said M/s. Indian Textile Paper Tube Co. Ltd. against the aforesaid decision of the Tribunal.
Despite the above decisions, the learned advocate for the appellant-company herein has urged that the decision of the Supreme Court has merely confirmed the decision of the Tribunal referred to above which does not take into account certain important tests of classification of a product under taxation tariffs laid down by the Supreme Court itself in other well-known decisions. Learned advocate in support of this proposition has stated that when a product is not defined in a Tariff its classification has to be determined in accordance with what is known as commercial parlance test. In other words, classification of a product depends upon what trading and consuming community understands by that product as mentioned in the Tariff. He relies for this enunciation on the Supreme Court’s decision in the case of Delhi Cloth and General Mills v. State of Rajasthan [1980 (6) E.L.T. 383]. This decision of the Supreme Court holds that rayon tyre cord/fabric is a textile fabric and not rayon cord as held by the departmental authorities earlier even though the rayon cord constituted the bulk of the material in the tyre cord fabric. The learned advocate submits that the Tribunal in the aforesaid decision 1984 (18) E.L.T. 35 has misdirected itself by stipulating that the articles of paper mentioned in Tariff Item 17(4)/17(3) as the case may be should be made 100% of paper or paper board.
4. The learned advocate further submits that the expression used in the Tariff is “other packing containers” in sub-item 17(4)/17(3). The composite containers satisfy this description and should, therefore, be classified under 17(4)/17(3) as the case may be. He relies on another judgment of the Supreme Court in the case of Indian Aluminium Ltd. v. Union of India, 1985 (21) E.L.T. 3 (S.C.). It has been observed by the Hon’ble Supreme Court in this case that “what is important is whether the broad description of the article fits in with the expression used in the Tariff. The aluminium wire rods, whether obtained by the extrusion process, the conventional process or by Properzi process are still aluminium rods. The process of manufacture is bound to undergo transformation with the advancement in science and technology. The name of the end-product may, by reason of the new technological processes, change, but the basic nature and quality of the article may answer the same description. On the basis of the material before us, it is not possible to record a positive finding that Properzi rods are treated as distinct product in commercial parlance.” It has also been observed in the said decision that wire rod is a genus and Properzi rod is a species of that genus and therefore, the latter product would be covered by the former description mentioned in the Tariff. Taking the analogy from the above observations of the Supreme Court, the learned advocate for the appellant submits that “other packing containers” is the genus and the composite container is one of the species of that genus. Therefore, the argument of the lower appellate authority, according to the learned advocate, that the product is known commercially as composite container and not as paper container or other packing container is untenable.
Next plea of the learned advocate in elaborating his argument as to how this product is known in commercial circles is based upon I.S. No. 11357-1985. He points out that this Indian Standard is “Specification for Composite Container for Dry Products”. This has been finalised, as apparent from foreword of the said specification, by the Committee on Paper and Flexible Packaging Sectional Committee. (Emphasis supplied by the learned advocate). He also points out that under para 4.1.3 of the said specification for the composite containers, it is stated that ends of such containers shall be of “paper board, tinplate, black plate aluminium or plastics.”
Learned advocate for the appellant further points out, on the commercial parlance test itself that under the Schedule of industries notified under the Industries (Development and Regulation) Act, 1951, the product ‘composite container’ is under the heading of industries pertaining to paper products. In view of these evidences, the learned advocate submits that there is no doubt that the ‘composite container’ is understood to be as a paper container and is, therefore, covered by 17(4)/17(3) of the Central Excise Tariff. He also relies on Trade Notice 578/E/Ch. 48 dated 22-9-1987 with reference to the present Tariff pertaining to Chapter 48 dated 22-9-1987 with reference to the present Tariff pertaining to Chapter 48 under Tariff sub-Heading 4818.13 – “other printed cartons, boxes and cases”.
He has also urged that the Tribunal’s decision has mainly relied upon the fact that bottom and lid portions of the composite containers under consideration are made of metals and since bottom and lid portions are essential parts of a container, this cannot be said that the entire container is made of paper. This test for the purpose of classification, according to the learned advocate, is not correct. The Tribunal ought to have gone strictly by the commercial parlance test as has been elaborated by him above.
5. Learned J.D.R. on the other hand, relies upon the Tribunal’s decision mentioned supra which he emphasizes has been confirmed by the Supreme Court in Civil Appeal No. 3650 of 1984. The question of classification, according to the learned J.D.R., is no longer res integra in view of the Supreme Court’s decision.
6. We have carefully considered the pleas advanced on both sides. From a reading of the Tribunal’s decision [1984 (18) E.L.T. 35] we observe that the learned advocate for the appellant is correct to the extent that the commercial parlance test was not applied in determining the classification of the product known as composite containers but the fact remains that the classification of the product has been settled by the Supreme Court by confirming the decision of the Tribunal. It is not, therefore, appropriate in the first instance to reopen that settled question merely because a different argument is advanced by another appellant assuming that argument to be correct.
7. However, we further observe that on the basis of material brought on record by the learned advocate for the appellant, we are doubtful whether the product ‘composite container’ can be held to be known commercially as an article of paper or paper board pertaining to the genus – “other packing containers”. ISS relied upon by the learned advocate cannot be taken as a certain guide for the commercial parlance test of the product. The Supreme Court in the case of Indian Aluminium Cables Ltd. [1985 (21) E.L.T. 3] relied upon by the learned advocate for the appellant himself observes as follows:-
“9. The specifications issued by the Indian Standard Institutions are for ensuring quality control and have nothing to do with the class to which the goods belong in a Tariff Schedule”.
Similarly the notification under the Industries (Development and Regulation) Act, 1951 also cannot be taken as a guide for determining the fact how the product ‘composite container’ are known in the market by the trading and consuming community. In fact, if we go by the Indian Standard Specification relied upon by the learned advocate the composite containers appear to be a class by themselves, and cannot be taken strictly in the class of paper containers. Trade Notice pertaining to Chapter 48 and Tariff sub-heading 4818.13 relied upon by the learned advocate pertains to the existing tariff and cannot be taken as a guide to the tariff entries as they stood at the relevant time i.e. 1982 and 1983. The learned J.D.R. during the course of arguments had pointed out that the said Trade Notice does not cover the product under consideration here. The said Trade Notice refers to containers fitted with reinforcing circular bands of other materials …”. It does not mean that the end-portions of the container, namely bottom and lid made of metals of the container are also covered by this expression. We are not called upon in the instant cases to interpret the Tariff sub-heading 4818.13 and the Trade Notice referred to by the learned advocate.
8. Having regard to the foregoing discussion, we do not agree that the composite containers are covered by the Tariff Entry 17(4)/17(3) and by the Notification 66/82 (as amended). Hence the appeals are rejected.