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whether laminated panels of particle and medium density fiber board should be classified under sub- heading no. 4406.90 and 4407.90 or under sub- heading no. 4408.90. The appellant alleged that the product manufactured by the respondent herein was classifiable under sub heading 4408.90. For this purpose the appellant relied on Chapter Note 5 of Chapter 44 of the Central Excise Tariff Act, 1985 (hereinafter referred to as `the Act’) which reads as under:- “For the purposes of heading No. 44.08, the expression “similar laminated wood” includes blockboard, laminboard and battenboard, in which the core is thick and composed of blocks, laths or battens of wood glued or otherwise joined together and surfaced with the outer plies and also panels in which the wooden core is replaced by other materials such as a layer or layers of particle board, fiberboard, wood waste glued or otherwise joined together, asbestos or cork”.

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 1

 REPORTABLE 

 IN THE SUPREME COURT OF INDIA

 CIVIL APPELLATE JURISDICTION

 CIVIL APPEAL NO.4462 OF 2003 

COMMNR. OF CENTRAL EXCISE, NOIDA .....Appellant.

 Versus

M/S. KITPLY INDUSTRIES LTD. .....Respondent

WITH

CIVIL APPEAL NO.9736 OF 2003

 J U D G M E N T

ANIL R. DAVE, J.

1. The present appeals arise out of the judgments and orders passed on 

23.9.2002 and 6.6.2003 by the Customs, Excise & Gold (Control) Appellate 

Tribunal, New Delhi and the Customs, Excise & Service Tax Appellate 

Tribunal, dismissing the appeals filed by the appellant- Revenue 

 2

Department. By this judgment, we dispose of Civil Appeal Nos. 4462/2003 

and 9736/2003 as they involve similar questions of law. 

2. The issue which falls for consideration in the present appeals is 

whether laminated panels of particle and medium density fiber board should 

be classified under sub- heading no. 4406.90 and 4407.90 or under sub-

heading no. 4408.90. The appellant alleged that the product manufactured 

by the respondent herein was classifiable under sub heading 4408.90. For 

this purpose the appellant relied on Chapter Note 5 of Chapter 44 of the 

Central Excise Tariff Act, 1985 (hereinafter referred to as `the Act') which 

reads as under:-

 "For the purposes of heading No. 44.08, the expression 

 "similar laminated wood" includes blockboard, laminboard 

 and battenboard, in which the core is thick and composed of 

 blocks, laths or battens of wood glued or otherwise joined 

 together and surfaced with the outer plies and also panels in 

 which the wooden core is replaced by other materials such 

 as a layer or layers of particle board, fiberboard, wood 

 waste glued or otherwise joined together, asbestos or cork".

For the sake of convenience, the relevant headings are also extracted below:

"44.06 - Particle board and similar board of wood or other ligneous 

materials, whether or not agglomerated with resins or other organic 

binding substances.

 3

4406.10- Plain particle boards. 

4406.20- Insulation board and hardboard

4406.30- Veneered particle board, not having decorative veneers on any 

face

4406.90-Other. 

44.07 - Fiber board of wood or other ligneous materials, whether or not 

bonded with resins or other organic substances.

4407.10-Insulation board and hardboard

4407.90- Other. 

44.08-Pplywood, veneered panels and similar laminated wood. 

4408.10 - Marine plywood and aircraft plywood.

4408.30- Decorative plywood

4408.40- Cuttings and trimmings of plywood of width not exceeding 5 

centimeters

4408.90 - Other". 

3. In order to decide the issue arising in the present case in its proper 

perspective, basic facts leading to filing of the present appeals are being 

recapitulated hereunder: 

 4

The respondent asessee, who is engaged in the manufacture of wood and 

articles of wood falling under Chapter 44, was issued show cause notices 

dated 16.2.2000 and 27.12.2000 by the appellant authorities, inter alia, 

calling upon it to show cause as to why classification of its products (1) 

Laminated Particle Board and (2) Laminated Medium Density Fibre Board 

should not be changed to chapter Sub-heading no 4408.90 The respondent 

replied to the said notices refuting the allegations on merits as well as on 

limitation. The said show cause notices were adjudicated and the demand 

proposed therein was dropped by the Commissioner of Central Excise, 

Meerut-II vide Orders dated 20.4.2001 and 31.10.2001 respectively. The 

Commissioner, ultimately found that the pre requisites of Chapter Note 5 of 

Chapter 44 were not satisfied and, therefore, no further action was taken so 

far as the aforestated classification was concerned. 

4. Aggrieved by the orders, the Revenue filed appeals before the 

Tribunal. The Tribunal dismissed the said appeals vide orders dated 

23.9.2002 and 6.6.2003, upholding the findings of the Commissioner. 

5. Aggrieved by the orders of the Tribunal, the Reveue has filed the 

present appeals. 

 5

6. The learned counsel for the appellant submitted that the Tribunal had 

erred in not appreciating that the manufacturing process, as stated by the 

factory manager clarified that "pre-laminated" meant already laminated and 

as a result of the process, the surface of the panels become water resistant as 

well as scratch resistant and due to melamine surface, it resisted cigarette 

burns and also got an attractive look. In spite of the above facts stated by the 

factory manager with regard to the process, the respondent-assessee never 

mentioned the word "Panel" in the manufacturing process submitted along 

with classification declared under Rule 173 B of the Act. 

7. Learned counsel for the appellant further argued that Chapter Note 

44.08 specifically speaks of plywood, veneered panels and `similar 

laminated wood'. He pointed out that in the instant case, it is an admitted 

fact that the goods in question, which are `wood products' are laminated 

and they are covered under chapter heading 44.08 and not under chapter 

heading 44.06 as there is no mention of lamination in the latter chapter sub 

heading. 

8. The learned counsel for the appellant also submitted that the Tribunal 

failed to appreciate that if a product is capable of being classified under two 

chapter headings, then Rule 3 (c) of the Rules for interpretation of the Act 

 6

envisages that classification under the heading, which occurs last in the 

numerical order. Therefore, chapter sub-heading 4408.90 would be the 

appropriate sub heading for classification of the products in question. 

9. To substantiate his claim, he relied on the cases of CCE, SHILLONG 

v. WOOD CRAFT PRODUCTS LTD. 1995 (77) ELT 23, M/S 

SAUSASHTRA CHEMICALS v. COLLECTOR OF CUSTOMS, 

BOMBAY 1986 (23) ELT 283, DECORATIVE LAMINATED (INDIA) 

PVT LTD v. COLLR. OF C. EX., BANGALORE 1996 (86) ELT 186 

(S.C.). 

10. On the other hand, the learned counsel for the respondent submitted 

that for Chapter Note 5 of Chapter 44 to apply, an essential pre-requisite is 

that the similar laminated wood must be surfaced with outer piles, which is 

conspicuously absent in the present case and hence the said chapter note 

would not apply. He also submitted that the impregnation is only an 

additional process, which is done on the particle board to increase its 

strength and, therefore, the goods would still continue to fall under heading 

4406. 

11. The learned counsel also submitted that the decision in the case of 

Wood Craft Products Ltd. (supra) would not be applicable to the instant 

 7

case as it was with respect to classification of block board. The respondent 

relied on the case of CCE, INDORE v. BOMBAY BURMAH TRADING 

CORPN. LTD. 2000(39) RLT 184 to substantiate its claim that pre-

laminated particle board is classifiable under heading 44.06 and not under 

heading 44.08. 

12. We have heard the learned counsel for the parties and perused the 

records. 

13. It is not in dispute that the product before the lamination is not 

classifiable under tariff heading 44.08. However, it is the case of the 

appellant that after the lamination, the panels so obtained become a distinct 

product falling outside the purview of 44.06. Hence, what needs to be 

determined by us is whether even after the lamination, the products falls 

under sub-heading 4406.90 and 4407.90 or would it fall under sub- heading 

4408.90. 

14. For this purpose, it is important to refer to the statement of the factory 

manager Shri B.V Rao, who stated that in the process of manufacture of the 

panels, plain panels of the mother boards (plain particle/MDF fiber) are 

used. Papers are passed through the impregnating unit wherein the resin and 

other required chemicals are spread on the paper and the paper gets 

 8

impregnated. The impregnated paper is further dried and cut into required 

length. These paper sheets are assembled with the mother boards in such a 

way that the impregnated paper is placed on the upper side and one layer of 

impregnated design paper is placed over one layer of impregnated tissue 

paper. This assembly is put for pressing under the required heat and 

pressure. The above assembly is taken out as pre-laminated boards and is 

ready for dispatch. 

15. From the above process, it is clear that the products are pre-laminated 

wood, most aptly falling under chapter heading 44.08 as the said chapter 

heading specifically speaks of plywood, veneered panels and similar 

laminated wood. The word "similar" discussed in the above para has been 

discussed by this court in the case of CCE, Shilling v M/S Wood Craft 

Products Ltd. (supra) wherein a similar issue with regard to "Block board" 

had arisen. For sound reasons recorded, this Court held that `Block board' 

should be classified under heading No. 44.08. The logic applied in the case 

of `Block board' can very well be applied in the instant case. In the said 

judgment, this Court observed as under in paras 5 and 6

 "5. It is significant that Heading No. 44.12 of the 

 HSN is the same as Heading No. 44.08 of the Indian 

 tariff and reads "Plywood, veneered panels and 

 similar laminated wood." The explanatory notes on 

 9

 the HSN indicate the meaning of the expression 

 "similar laminated wood" as under:-

 "similar laminated wood. This group can be divided 

 into two categories:

 Block board, lamin board and batten board, in which 

 the core is thick and composed of blocks, laths or 

 battens of wood glued together and surfaced with the 

 outer plies. Panels of this kind are very rigid and 

 strong and can be used without framing or backing."

 6. It is clear that if the expression "similar 

 laminated wood" in the Indian Tariff is understood as 

 it meant under the HSN on which pattern the Central 

 Excise Tariff Act is based, then block boards of all 

 kinds would fall within the expressionn "similar 

 laminated wood". This is how the amended Chapter 

 Note reads expressly. The question is whether it can 

 be so read even for the earlier periods particularly the 

 first period before amendment of Chapter Note 5 to 

 expressly include block board in the expression 

 "similar laminated wood".

16. Heading 44.08 in the instant case covers "plywood", "veneered 

panels" together with all kinds of "similar laminated wood". In other words, 

it is treating "plywood" or "veneered panels" as "laminated wood". 

Therefore, it covers all kinds of laminated wood bearing any resemblance to 

"plywood" or "veneered panels". The word used is "similar" and not "same". 

Thus, some resemblance to "plywood" or "veneered panels" is enough, 

 10

provided the article can be treated as "laminated wood". The sweep of the 

heading is, therefore, quite wide.

 17. Therefore, for the product to be classified under the above heading, it 

is enough if it is similar to laminated wood, which in the instant case is 

proved beyond reasonable doubt. Even factory manager, Shri B.V. Rao 

admitted the facts with regard to lamination. At this point we may again 

refer to the case of M/s. Wood Craft Products Ltd. (supra). It has been 

mentioned therein that "The meaning of the significant words and 

description of the wood products as intermediate materials meant for 

manufacture of final products clearly indicate that "laminated wood" means 

a wood product prepared by placing layer on layer and "block board" is a 

plywood board with a core of wood. Any plywood board with a core of 

wood in which there are layers, one above the other is, therefore, laminated 

wood similar to plywood or, veneered panels. It is "similar laminated wood" 

included in the heading "Plywood, veneered panels and similar laminated 

wood". Similarity with, and not identity with plywood or veneered panels is 

required".

18. From the above, it is clear that the product is similar to plywood and 

veneered panels and hence tariff heading 44.08 is squarely applicable. 

 11

Further, in the instant case, the core layer is made up of the particle board or 

MDF board (referred to as "mother boards" in the process mentioned above) 

and joined together with the help of resins and then laminated with 

plasticised paper (paper impregnated with melamine formaldehyde resin). 

Hence it is also clearly seen that the laminated panels manufactured by the 

respondent are covered under Chapter Note 5 to Chapter 44 of the schedule 

to the Act. The product need not be same as plywood or veneered panels but 

mere similarity with them is enough for chapter note 5 to apply. 

19. The Tribunal has erred in holding that as "particle board" is 

specifically covered under heading 44.06, laminated particle board will 

come under the scope of "similar board of wood" under the said heading. It 

is clear that the product after the lamination is a distinct marketable 

commodity different from the original one. This conclusion is further 

substantiated by the fact that Shri B.V. Rao said in his statement that the 

panels after lamination, become water resistant and look attractive due to 

printed paper and brings about a change in the name, usage etc. Therefore, 

the Tribunal's conclusion that the laminated board is similar to `particle 

board' is incorrect and cannot be accepted. 

 12

20. The respondent has placed reliance on the pari materia heading in the 

HSN 44.10 to contend that the product is classifiable under chapter heading 

44.06. We cannot accept this argument. In the proviso to the said heading, it 

has been mentioned that if the manufacturing process gives the product the 

essential character of articles of another heading, then chapter heading 

44.12 will not apply. In the instant case, going by the statement of the 

respondent's own officer, the product after lamination assumes a distinct 

marketability and brings about a change in the product. This change, after 

lamination makes the product fall outside the purview of chapter heading 

44.06 and that would place the product under chapter heading 44.08 as the 

word used under chapter heading 44.08 is "similar laminated wood" 

(emphasis supplied). Further recourse may also be taken to rule 3 (c) of the 

Rules for interpretation of the Act which envisages that if the products are 

capable of classification under two chapter headings, then as per the said 

rule, the classification must be under the heading which occurs last in the 

numerical order. Therefore, heading 4408.90 would be the appropriate sub 

heading for classification of the product in question. 

21. In terms of the above conclusions arrived at and on appreciation of the 

materials on record, we are of the view that the findings arrived at by the 

Tribunal are unjustified and cannot be accepted. The impugned judgments 

 13

and orders passed by the Tribunal in both the appeals are, therefore, set aside 

and it would be open to the appellant to assess the respondent as per the 

above findings. Accordingly, the appeals are allowed but leaving the parties 

to bear their own costs. 

 ...............

 ...................................J.

 (Dr. MUKUNDAKAM SHARMA)

 .....................................................J. 

 (ANIL R. DAVE)

New DelhiSeptember 7, 2011. 

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