LexBAKELITE HYLAM LTD. ETC . versus COLLECTOR OF CENTRAL EXCISE, HYDERABAD
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.,._ BAKELITE HYLAM LTD. ETC . A ( 11. COLLECTOR OF CENTRAL EXCISE, HYDERABAD JULY 14, 1998 [S.C. AGRA WAL ANDS. SAGHIR AHMAD, JJ.] B Central Excises & Salt Act, 1944/Central Excise Tariff: Schedule II Items 19(IIJ),17 (2), 22-F and 68-Laminated sheets and boards-Prepared by resin impregnated cotton fabric sheets (Prepeg-F), paper sheets (Prepeg- P) and glass fibre sheets (Prepeg-G)-Classified under Items 19 (IIJ), 17(2) c and 22-F of the Tariff respectively-Classification challenged before the CEGAT-Held to be proper-Appeal preferred-Held-.Jn view of cotton fabric as defined in Item 19, Prepeg-F correctly classified under Item 19 (IJJ)-In view of Tariff Advice No. 2184 Prepeg-P correctly classified under Item 17(2)-As Prepeg-G manufactured from glass fabrics and not from mineral fibre or yarn, wrongly classified under 22-F-Should be classified D under Item 68. "- The appellants are manufacturers of laminated boards and sheets which are paper, cotton fabric and glass fabric based. Paper based laminated sheets are prepared by passing the paper sheet through or immersing it in a resin bath (phenol formaldehyde resin), as a result cf which the paper is impregnated E with resin. This resin impergnated paper is known as 'Prepeg-P' which after drying and being pressed in a hydraulic press with heat turns into a laminated sheet. The cotton fabric and glass fabric based laminated sheets are prepared in a similar manner and the impregnated sheets made from those are called 'Prepeg-F' or 'Prepeg-C' and 'Prepeg-G' respectively. The two sets of appeals Cl herein are directed against the two judgments dated 25-03-1986 and 03-06- F 1991 passed by CEGAT. The 1986 judgment classified 'Prepeg-F' under Tariff Item 19(111); 'Prepeg-P' under 17 (2) and 'Prepeg-G' under 22-F whereas majority of the three member Bench in 1991 judgment held Prepeg- F, P and G to be under Tariff Items 19 (Ilij, 17 (1) and 22-F(4) respectively. According to the dissenting member the aforesaid were assessable under G Item 68 of the Tariff. CEGAT rejected the contention that 'Prepeg-F', impregnated cotton ... fabric cannot be regarded as cotton fabric falling under item 19(111) of the ..., Tariff as it cannot be proved that the propoiiion of the impergnated materials has reached such a level that the final product has ceased to contain the characteristics of a fabric so as to take it out of the purview of the cotton H 631 632 SUPREME COURT REPORTS (1998] 3 S.C.R. A fabric set out in Item 19(111). CEGA T also held that phenol formaldehyde resin is covered by the term "artificial plastic materials" in item 19 (Ill). The issue involved in these appeals is regarding classification of the above three kinds of impregnated sheets for the purpose of levy of excise duty under the erstwhile Central Excise Tariff contained in the First Schedule to B the Central Excises and Salt Act, 1944. The appellant contended that as 'Prepeg-F' has not been defined, in common parlance it cannot be regarded as cotton fabric as a result of which it should be classified under the residual entry in Item 68. It was also C contended that as per Trade Advice No. 51/75 dated 31-10-1975, issued by the Central Board of Excise & Customs, treated paper claimed to be an intermediary product in the manufacture of decorative and laminated sheets falling under Tariff Item ISA of Central Excise Tariff is not classifiable under Tariff Item 17 of Central Excise Tariff. The appellant also differentiated impregnated paper from 'Prepeg-P' on the basis that impregnated paper does D not cease to remain paper while Prepeg-P cannot be regarded as paper. As regards 'Prepeg-G' it was contended that it would not fall under Item 22-F .. > as it is neither mineral fibre or yarn nor is it a product manufactured from _-4 E F G mineral fibres or yarn. Partly allowing the appeals, this Court HELD : I. In item 19 of the Central Excise Tariff contained in the First Schedule of the Central Excises and Salt Act, 1944 "cotton fabrics" has been defined to include "fabrics impregnated coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials". In view of the inclusive clause in the definition of"cotton fabrics" contained in Item 19 it cannot be said that 'Prepeg-F' which is impregnated cotton fabric cannot be regarded as cotton fabric for the purpose of Item 19(111) of the Tariff. [637-CI Collector of
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