N.K. Bajpai, Member (T)

1. This is an appeal against the orders of the Collector of Customs (Appeals), Bombay, by which he has upheld the order of the Assistant Collector of Customs, Special Investigation and Intelligence Branch, Customs House, Bombay, deciding that "POLYESTER FILM - PLAIN (MELINEX-226)" should be classified under sub-heading 3920.69 as against the claim of the appellants for classification as "Electrical Insulators - Other" under sub-heading No. 8546.90. The appellants have stated that upon classification under sub-heading 8546.90 the goods should be given the benefit of Notification 60/87-Cas., dated 1-3-1987 under Serial No. 14 of the Table annexed as "Insulators designed for use in electrical circuits of 400 volts or above".

2. In respect of their appeal, the appellants have referred to the Import Licensing Policy in which the description under 85.46, sub-heading 8546.20 is "electrical insulating material except impregnating varnishes and enamels". The appellants have also submitted that the insulating properties of the Polyester Film imported by them have not been denied by the authorities. They have also placed reliance on the decision of the Tribunal in the case of Collector of Central Excise v. Metro Wood Engineering Works, MANU/CE/0315/1989 : 1989 (43) E.L.T. 660 (Tri.) in which it was decided that industrial laminates having insulation properties were electrical insulators falling under sub-heading 8546.00. In the case of Chetna Polycoats (P) Etd. v. Collector of Central Excise 1988 (17) ECC 225 the Tribunal has held that electrical insulation tapes are classifiable under Heading 85.46. The Department's appeal to the Supreme Court against this decision was dismissed at the admission stage itself.

3. It is claimed by the appellants that the main characteristics of MELINEX POLYESTER FILM, imported by them, is that of Insulator with high dielectric strength and in support of their claim they have referred to technical literature of M/s. I.C.I. according to which, for a thickness of 250 microns insulation upto 1300 volts and for 350 microns for still higher voltages, insulation is provided by the subject goods as against the requirement of Notification 60/87 that it should be more than 400 volts. The appellants have also submitted a specification of electric motor for SR-1622 compressor wherein the voltage is 415 volts in which, according to the appellants, the Melinex Polyester Film is used for insulation purposes. In view of the two judgments cited by them and in view of the Import Licensing Policy, the appellants have claimed that the subject goods should be classified as electrical insulators. What has been imported is Polyester Film intended for and used as an insulator in the manufacture of electric motors.

4. We have heard Shri Lakshmikumaran, the learned counsel for the appellants and Shri Ram Prakash, the learned SDR for the Department. Apart from reading the judgment of the Tribunal in Chetna Polycoats case (supra), Shri Lakshmikumaran also read out from the decision of the Tribunal in the case of Bakelite Hylam Ltd., Hyderabad v. Collector of Central Excise, Hyderabad MANU/CE/0174/1985 : 1985 (22) E.L.T. 879 (Tri.), in which it was held that rigid plastic laminated sheets (Hylam) having insulation properties were insulators classifiable under Item 68 and not Item 15A(2) of the erstwhile Central Excise Tariff. While reading these judgments, Shri Lakshmikumaran laid emphasis on that part of the description of the Polyester Film which referred to it as Melinex-226 and submitted that since the essential character of the product is its insulation properties, the goods were classifiable as electrical insulators.

5. While referring to the conclusion of Collector (Appeals) that the entry in the OGL against which the import of the subject goods was made related to Plain Polyester Film, the learned Counsel referred to sub-heading 8546.20 and submitted that as long as impregnating varnishes and enamels w