S.D. Mohile, Member (T)

1. Brief facts of the case are as under :

M/s. Purity Flex Pvt. Ltd., Ready Money Terrace, Worli Naka, Dr. A.B. Road, Bombay filed B/E No. F-001398 dated 13-3-1990 for clearance of one extrusion lamination plant and accessories imported by them from Korea. They claimed the classification under Heading 8477.20.

A query was raised by the department so as to know how they had claimed the classification of the machines under Heading 8477.20. They were also asked to explain as to why the machines should not be classified under Heading 8479.89.

In reply to query raised by the Deptt. the importer vide their letter dated 4-5-1990 stated that the machine fell under Heading 8477.20. They were also asked to explain as to why the machines should not be classified under Heading 8479.89. In reply to the query the importer replied that the machine fell under 8477.20 and not under 8479.89 as the machine is a coater/extruder. They gave the detailed process description to justify their claim. They further added that since the machine is basically used for the purpose of coating and extruding and since lamination cannot be achieved without coating and extrusion the plant has to be classified under Heading No. 8477.20 and not under 8479.89. He enclosed the copy of machine specifications received from the manufacturer. The importer vide his letter dated 9-5-1990 again insisted for classification under Heading No. 8477.20 as machinery for working rubber or plastics or for the manufacture of products from these materials as these are not specified or included elsewhere in the chapter. They also enclosed definition of Aseptic Packaging and other data.

Again vide their letter dated 17-5-1990 they emphasised that machine which they had imported is essentially for manufacture of Aseptic Packaging materials for food industries. The process involved is of coating and extrusion. It was stated that under Notification 250/88-Cus., dated 16-9-1988 multilayer Coater/Extruder Machine is also to be covered under Notification No. 355/85, dated 6-12-1985. Further vide their letter dated 31-5-1990 the importer informed that the machine manufactured by the same supplier was cleared by Bombay Customs House under Heading No. 8422.40 at a concessional rate of duty @ 35% + 5% and under OGL vide Appendix No. 1 Part B, Section No. 17(i) as an Aseptic Packaging Machine. The B/E cleared by Bombay Customs House as informed by him was 8501 /21-2-1990.

2. The findings of the learned adjudicating authority are as follows :

"I have gone through the facts of the case and submissions made by the importer, Custom Tariff Heading 8477.20 under which the classification is claimed by the importer reads as 'Extruder'. But Catalogue of the manufacturer describes the goods as 'model KEL1200' as Extrusion Laminator Coating Machine. Also from the write-up it has been observed that in the inter-mediatory stage of the manufacturing process (after web passes through the anchor ceater unit and drying unit) molten LDPE or other laminate is extruded on the web in the form of sheet from the T. Die of the extruder unit. Therefore the extrusion is only an ancillary function in this lamination machine. The essential character of the machine is lamination and not that of extruder. Therefore party's claim for classification under Chapter 8477.20 is not tenable. Therefore the machine would fall under Heading 8479.89 of CTA, 1975.

The party's claim for exemption under Notification No. 125/86-Cus. which was wrongly being mentioned as Notification 355/85 is also not admissible because, inter alia, the lamination machine is not mentioned in Column (2) of the Table of the Notification 125/86 at Sr. No. 23 covers Asceptic Packaging Machinery only. As evident from the importer's explanation and Manufacturer's Catalogue the Machine imported does not perform any of the function of Asceptic packaging. In fact the machine only produces material for Asceptic packaging viz. Plastic laminated fil