I.J. Rao, Member (T)

1. The appellants manufacture, among other things, sutures for medical use. For this purpose, they imported aluminium foil of two varieties. One variety was 'aluminium foil laminated to paper and heat-seal coated' and the other variety was 'aluminium foil heat-seal coated'. At the time of importation, the goods were classified under H. 76.03/0(2), C.T.A., and paid duty accordingly. In this appeal before us, there is no dispute about the classification. The appellants, subsequent to importation and payment of duty, claimed refund of a part of the duty paid by them. In respect of 6,600 sheets of aluminium foil, the appellants claimed the benefit of Notification No. 173-Cus/77 and Notification No. 67-Cus/79. In respect of 256 kg. of aluminium foil (only heat-seal coated), they claimed the benefit of Notification No. 173-Cus/77. The Assistant Collector rejected the claim recording, inter alia, as follows :-

"The party has elaborately argued that the contents of aluminium in respect of the foil imported by them. While it is not defined that the purity is of definitely 97% but the point for consideration is whether the foil is laminated and coated or plain. This Notification, against which concessional assessment is only extended for aluminium foil which is plain. Assessment already made is in order and the claim is rejected."

2. Aggrieved, the. appellants filed an appeal before the Appellate Collector. He rejected the appeal by an order, which is reproduced below :-

"I have carefully gone through the appeal petition as well as copy of order impugned therein.

The appellant had sought concessional rate of duty under 173/77-Cus., notification, under which aluminium manufacturers containing more than 97% aluminium are liable to basic customs duty 27.5% instead of at 100% + 20% AD and CVD.

Their claim was rejected by lower authority on the ground that the notification applies only to plain aluminium foil whereas the goods imported are coated and not plain.

Heard representative of appellants. He produced sample and a photo-copy of specification. He further added that in the impugned item aluminium is 60 to 65% and rest is paper, resin and adhesive.

It has therefore been stated by the appellants that the percentage of aluminium in the product imported is only 60 - 65% and the balance is paper, resin and adhesive. It is observed therefore that the wording of notification 173/77 is such that it allows concessional rate of duty to those ''Aluminium Manufacturers which contain more than 97% aluminium. The issue is, therefore, not the purity of Aluminium in the manufactured article but it's content in the composite product. Judged by this criteria, it is 'seen that the item imported has only 60-65% of Aluminium as stated by the appellants and therefore has less than the stipulated 97% and hence the original assessment is in order and appeal is accordingly rejected as untenable."

3. Aggrieved by this, the appellants filed a revision application before the Government of India and this application, on statutory transfer to the Tribunal, is now an appeal before us. Shri D.B. Engineer, the learned Counsel for the appellants, argued that the goods were assessed as 'foils of unalloyed aluminium' [the words as they appear in H. 76.03/04(2)]. He submitted that this classification was totally correct, and invited our attention to Notification No. 173-Cus/77. He submitted that, according to this Notification, aluminium manufactures containing more than 97% of aluminium, other than etched aluminium foil but including foil in any form or size ordinarily used as parts and fittings of tea chests, and failing under H. 76.03/04, were exempt from payment of duty exceeding 27.5%. Shri Engineer submitted that the imported goods were aluminium manufactures; they contained more than 97% of aluminium; and that they were foils. Thus, they satisfied all the conditions of the Notification.

4. Elaborating on his arguments, Shri Engineer submitted that t