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The Western India Plywoods Ltd. Vs. Collector of Central Excise - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1985)(19)ELT590TriDel
AppellantThe Western India Plywoods Ltd.
RespondentCollector of Central Excise
Excerpt:
1. this is a revision application (hereinafter called "appeal") filed before the central government which under section 35p of the central excises and salt act, 1944, stands transferred to this tribunal to be disposed of as if it were an appeal presented before the tribunal.2. the issue in this case is as regards the correct central excise classification of the products manufactured by the appellants and marketed under the name of "wipchek compressed floor board", "wipchek floor board" and "wiptread floor board". while the central excise authorities have classified them under item 16b of the central excise tariff (covering plywood, block board, etc.), the appellants contend that the correct classification should be under item 68 as "all other goods, not elsewhere specified".3. the.....
Judgment:
1. This is a revision application (hereinafter called "appeal") filed before the Central Government which under Section 35P of the Central Excises and Salt Act, 1944, stands transferred to this Tribunal to be disposed of as if it were an appeal presented before the Tribunal.

2. The issue in this case is as regards the correct Central Excise classification of the products manufactured by the appellants and marketed under the name of "Wipchek compressed floor board", "Wipchek floor board" and "Wiptread floor board". While the Central Excise authorities have classified them under Item 16B of the Central Excise Tariff (covering plywood, block board, etc.), the appellants contend that the correct classification should be under Item 68 as "All other goods, not elsewhere specified".

3. The subject matter of the appeal was covered by two orders of the Assistant Collector, against which they went up to the Appellate Collector of Central Excise, Madras. The latter authority remanded the two cases to the Assistant Collector for taking a decision afresh after complying with the principles of natural justice. Thereafter, the Assistant Collector passed a further Order-in-Original dated 16-6-79, in which he held the goods to be classifiable under Item 16B. This order was upheld by the Appellate Collector of Customs and Central Excise, Madras, in his order dated 17-11-80. Although during the hearing, Shri S. Venkataraman, the learned consultant for the appellants, referred to the contents of the earlier orders of the Assistant Collector (which were set aside in appeal), we are concerned only with the contents of the above mentioned Order-in-Original dated 16-6-79 and Order-in-Appeal dated 17-11-80.

3A. The description of Item No. 16B, as it stood at the relevant time (it was amended subsequently, with effect from 1-3-1982), read as follows :- "16B. Plywood, blockboard, Laminboard, batten board, hard or soft wall boards or Insulating Board and Veneered Panels, whether or not containing any material other than wood; cellular wood panels; building boards of wood pulp or of vegetable fibre, whether or not bonded with natural or artificial resins or with similar binders; and artificial resins or 'with similar binders or reconstituted wood being wood shavings, wood chips, saw dust, wood flour or other ligneous waste agglomerated with natural or artificial resins or other organic binding substances, in sheets, blocks, boards or the like- (i) Plywood for Tea-chests when cut to size in panels or shocks and packed in sets.

It was the contention of Shri Venkataraman that the goods in question were not plywood classifiable under the above Item, and that, as they were not covered by the above Item or any other specific item of the Central Excise Tariff, they should have been classified under Item 68.

4. Shri Venkataraman argued exhaustively on the difference between plywood and the products under consideration. According to him, these came under the category of "Compreg", which was a "portmanteau word" signifying a product which was both compressed and impregnated.

5. Shri Venkataraman filed a statement showing "comparative characteristics of plywood and compressed floor board (Compreg)". This statement lists 21 characteristics and against each of them shows how those characteristics are applicable to plywood and to Compreg. (We shall have more to say about this statement later).

6. Apart from this statement, Shri Venkataraman relied heavily on the Indian Standard Specification for plywood for general purposes (IS : 303-1975) and the Indian Standard Specification for high and medium density wood-based laminates (Compreg) Part III General Purposes [IS: 3513 (Part III)-1966]. He also filed the Indian Standard Specification for medium strength aircraft plywood (IS : 709-1974) and the Indian Standard Specification for marine plywood (IS : 710-1976). He relied on the specification for "Compreg" to show that "Compreg" was a specific commodity which was known by that name and was distinct from plywood.

He drew our attention in particular to paragraphs 2.1, 2.2 and 2.3 in the Standard. Paragraph 2.1 reads as follows :- "2.1 Compreg-A wood-base laminated material made from thin wood veneers either impregnated under vacuum and/or pressure with synthetic resins or coated with synthetic resin or interlaid with synthetic impregnated paper and further bonded and densified under heat and pressure. The synthetic resins are usually phenol and cresol formaldehyde type." Paragraph 2.2 ibid defines high density "Compreg" as "materials with specific gravity varying from 1.25 to 1.45" and paragraph 2.3 defines medium density "Compreg" as "materials with specific gravity varying from .95 to below 1.25". Shri Venkataraman also referred to paragraph 3.1 ibid which reads as follows :- He stated that so far no Standards had been formulated by the I.S.I.for low density Compreg, that is, materials with specific gravity below 0.95, but that did not mean that such a commodity did not exist.

7. Shri Venkataraman also drew our attention to the report dated 24/26th February, 1977 of the Chemical Examiner, Custom House, Cochin.

The relevant part of this report reads as follows : - 1. This is well compressed. In BT.N., this falls under the heading 44.17 as "Improved wood". According to I.S. 3513. (Part I) 66, it will be known as "medium density compreg".

These are also like the above product but having a lower density and having a moisture content much less than 8.0%. In view of this, they cannot be considered as plywood in terms of I.S. : 303-1975, although their compression is less. They have undergone special treatment more than that is required to cement them-together due to which they have also lost their moisture content. According to B.T.N., these can be considered as "Improved wood" as they have been treated to increase their density or hardness and improve their mechanical strengths. These consist of several layers bonded together, the treatment applied being in excess of that required merely to produce a good bond between the layers." Shri Venkataraman argued from this that the report very clearly showed that Wipchek compressed floor board fully met the requirements of the ISI Specification for "Compreg". As regards the other two products, namely "Wipchek floor board" and "Wiptread floor board", the Chemical Examiner had not reported them as satisfying the requirements of the Specification for "Compreg" apparently because their density was lower than 0.95, which was the minimum for "medium density Compreg". Shri Venkataraman however pointed out that even so, the Chemical Examiner had reported that these goods could not be considered as plywood in terms of IS : 303-1975. Therefore, according to him, the Chemical Examiner's report clearly showed that all the three products fell outside the scope of Item 16B and were classifiable only under Item 68.

8. Shri Venkataraman also drew our attention to exemption Notification No. 16/68-C.E., dated 1-2-1968 issued by the Ministry of Finance Originally under this Notification "marine plywood, aircraft plywood and compreg" were exempted from duty in excess of 7/1/2% ad valorem.

Subsequently, through amending Notification No. 204/73-C.E., dated 8-12-1973, "Compreg" was deleted from this entry. Shri Venkataraman submitted that in a letter dated 3-12-73 (which is not before us), the Central Board of Excise and Customs had informed the Collectors that it had been advised that "Compreg" was a type of improved wood covered by IS : 3513-66 and was not covered under Item 16B and was therefore not excisable and that the reference to Compreg in Notification No.16/68-C.E., dated 1-2-1968 was redundant. Shri Venkataraman argued that this clearly showed the recognition by the Board that 'Compreg" fell under Item 68 and not under Item 16B.9. Shri Venkataraman had also filed extracts from various dictionaries and other works of reference to illustrate the popular and technical understanding of the term "plywood". There is not much difference between the definitions or descriptions given by the various authors, apart from what is natural when different persons write independently on the same topic. We are reproducing below an extract from "Plywood of the World" by Andrew Dick Wood (1963 Edition) :- "In both Europe and America the word "plywood" is used by manufacturers and wood workers alike to describe one of the several forms of board built up with rotary-cut or sliced-cut veneers of wood. Such boards, which may be flat or shaped, are generally classified into four main groups :- (1) Three-ply or multiply construction in which layers of wood veneer and adhesives are made up into a product the chief characteristic of which is the crosslayers which distribute the longitudinal wood strength. Boards formed of more than three layers of veneer are usually designated "multiply".

(2) Laminboard construction in which the core is built up with slats of veneer or thin wood not exceeding 7 mm. wide glued to each other and laid at right angles to the grain of the outer plies.

(3) Blockboard construction in which the slats of veneer used in lamin boards are replaced by blocks of wood not exceeding 1 in.

wide.

(4) Battenboard construction is very similar to blockboard, but the core is formed of battens up to 3 in. wide in place of the 1 in.

blocks. This is known as lumber core in America and in Japan." According to Shri Venkataraman, this is the most authoritative text, the author being a world renowned authority, and he placed special reliance on this work.

10. We have referred earlier (paragraph 5 above) to the statement filed by Shri Venkataraman, listing the differences between plywood and Compreg with reference to 21 "characteristics". This statement had been compiled by Shri Venkataraman himself. According to him, it was based on the various authorities he had studied and on some of which he was relying before us. However, the statement did not (except in the entry relating to "specification") show anywhere the authority for the statements made therein and the differences claimed to exist. We had pointed out to Shri Venkataraman that an ad hoc statement compiled in this manner, without even reference to the specific authorities on which it was based, had very limited value. We are not, therefore, listing all the "differences" mentioned in the above statement, but only those which were emphasized by Shri Venkataraman, with reference to literature or other authority, and those which have special relevance to the essential qualities of "Compreg" as emphasized by him, namely compression and impregnation.

11. In regard to "construction", Shri Venkataraman submitted that in the case of plywood alternate layers would have the grain of the wood at right angles to each other. The exception would be in the case of plywood having an even number of plies, where the two plies in the middle would have the grain in the same direction. As against this, in the case of Compreg, a number of the adjacent layers or laminae could have the grain in the same direction. For instance, in one sample having 15 laminae, 10 would be in one direction and the other five at right angles to them. Thus, there would be four adjacent pairs of laminae with the grain running in the same direction.

12. As regards compression, Shri Venkataraman stated that in the case of plywood the pressure applied was about 150 lbs. per sq. in. In the case of Compreg, the minimum pressure applied was 750 lbs. per sq. in., which could go up to 2200 lbs. per sq. in. As a result, in the case of plywood there would be only a marginal reduction in the total thickness, whereas in the case of Compreg the reduction would be to the extent of 37% to 75% (actually the figures should be 27% to 43%, with reference to the original thickness, which has to be taken as the basis : when this was pointed out to Shri Venkataraman he readily agreed).

The specific gravity of ply wood would be 0.6 to 0.7%, whereas that of Compreg would be 0.95 to 1.45%.

13. On the question of impregnation, according to Shri Venkataraman, in the case of plywood there is only surface coating of the alternative veneers, whereas in the case of Compreg all the laminations are partially impregnated with synthetic resins.

14. With reference to end-use, Shri Venkataraman stated that plywood basically replaces and economises the use of natural timber. As against this, Compreg, because of its high resistance to wear and tear as well as acids, alkalies, etc., finds wide use in industrial and engineering applications and it is also increasingly replacing metals, alloys and plastics.

15. Shri Venkataraman therefore submitted that the goods in question were "Compreg", which was something entirely different from plywood. He submitted that this position had not been appreciated by the Assistant Collector, who had held that the goods were "a variety of improved plywood". According to Shri Venkataraman, while there was such a thing as "improved wood", and the Assistant Collector's finding in this regard was erroneous. He therefore submitted that the goods should be classified only under Item 68 as "All other goods, not elsewhere specified".

16. Replying on behalf of the Department, Shri Lakshmi Kumaran referred to the CCCN Headings Nos. 44.15 and 44.17. The former Heading covered plywood, blockboard, etc. The latter Heading covered "improved" wood.

Shri Lakshmi Kumaran readily conceded that if one had to choose between these two Headings, the goods in question would be classifiable as improved wood. He however pointed out that there was no such differentiation in the Central Excise Tariff, where the competing Items were Item 16B for plywood, etc., and Item 68, which was the ultimate residuary Item. He cited the decision of the Supreme Court in the case of Dunlop India Ltd. and Madras Rubber Factory Ltd. v. Union of India and Ors. (1983 E.L.T. 1566 S.C.) wherein it was held that where an article has a reasonable claim to be classified under an enumerated Item in the Tariff Schedule, it would be against the very principle of classification to deny it the parentage and consign it to the orphanage of the residuary clause.

17. Shri Lakshmi Kumaran submitted that the goods manufactured by the appellants could be considered as "plywood" within the meaning of Item 16B.18. Referring to the Chemical Examiner's report, vide para 7 above, Shri Lakshmi Kumaran pointed out that it clearly showed that the appellants had themselves used the term "compressed" only with reference to one of their products and not to the other two, namely Wipchek floor board and Wiptread floorboard. The report also showed that the density of these two products was much less than that of "Wipchek compressed floor board".

19. Shri Lakshmi Kumaran invited our attention to the Explanatory Notes under Heading 44.17 of the CCCN, referring to "improved" wood. It had been stated therein that such "improved" wood may be solid or consist of several layers bonded together, in the latter case the treatment applied being in excess of that required merely to produce a good bond between the layers. He submitted that the term "Compreg" could be properly used only to the first type of "improved" wood, namely where the wood is solid and impregnated, and that it would not apply to the other type of "improved" wood, which is the type under consideration before us. This type of "improved" wood would according to Shri Lakshmi Kumaran still remain as plywood. He saw nothing wrong or illogical in the Assistant Collector using the expression "improved plywood" with reference to this type of product, since it was essentially an improved type of plywood.

20. Coming to the published literature, Shri Lakshmi Kumaran filed an extract (page 567) from the McGraw Hill Encyclopaedia of Science and Technology, Vol. 10 (5th Edition) relating to plywood. Under the heading "manufacture" various uses have been shown, as follows :- "Plywood in appropriate grades is used in furniture, built-ins, doors, wall facings, shelving, partitions, separators, bins, shipping containers, toteboxes, crates, fences, box car and truck lining, farm buildings, concrete forms (when mill-oiled), displays, signs, boat hulls, box beams, stressed skin panels, subflooring, flooring (with a hardwood surface in tongue-and grooved pieces for parquetting), roof decking, and siding." Shri Lakshmi Kumaran submitted that these uses were very similar to those cited by Shri Venkataraman as peculiar to "Compreg", and this showed that plywood in appropriate grades could be used for very many purposes, making it virtually indistinguishable from what he called laminated "Compreg".

21. With reference to Shri Venkataraman's point regarding construction of the goods, that is whether alternate layers should be at right angles, Shri Lakshmi Kumaran submitted that in the case of plywood it was not necessary that every ply should be at right angles to the adjacent ones. Thus, in the extract from "The Wealth of India" published by the Council of Scientific and Industrial Research, which was one of the authorities cited by Shri Venkataraman, it was stated that "the term plywood designates a wood panel of three or more layers of veneers (plies) bonded together usually with the grain of adjacent veneers running at right angles to each other". The word "usually" showed that it was not an invariable rule. It had been admitted by Shri Venkataraman himself that where plywood consisted of an even number of plies, the two plies in the centre would have the same direction and would not be at right angles. Shri Lakshmi Kumaran referred to the appellants' note on "Wipchek", referring to its being assembled in cross grained construction, and submitted that this showed that the construction was essentially the same as in the case of plywood.

22. Shri Lakshmi Kumaran thereafter referred to Andrew Dick Wood's work on "Plywood of the World" on which heavy reliance had been placed by Shri Venkataratnan.' He pointed out that the extract filed by Shri Venkataraman was taken from Part IV, Chapter III of the book, of which the title was "The manufacture of technical plywoods". This would show that even "Compreg" was only a technical plywood. Shri Lakshmi Kumaran pointed out that in the same Chapter, at pages 127 to 128, reference was made to aircraft plywood, which obviously had to be made into many different shapes. In fact, the illustrations given were of "Moulded nose for Mosquito" and "Jet Engine Intake in Moulded Plywood". Again in Chapter IV at page 147, reference was made to "Shaped and moulded plywood" and at page 149, there was a reference, with an illustration, to curved panels of plywood. Thus, there were recognised varieties of plywood capable of a wide range of uses, some of them as exacting as use in aircraft. It was in this light that the classification of the goods under consideration should be seen. The strength, resistance and special qualities of these products, on which stress had been laid by Shri venkataraman, were not denied, but Shri Lakshmi Kumaran submitted that these qualities would not take them out of the scope of the term "plywood".

23. Again, referring to the printed literature of the appellants, Shri Lakshmi Kumaran pointed out that one of the uses specially mentioned was for passenger bus floorings. This was a recognised use of plywood.

24. Shri Lakshmi Kumaran submitted that a generic term used in the Tariff would cover special varieties of the goods, so long as the generic term was applicable to them. In this case the generic term "plywood" was clearly applicable to the goods under consideration and they should therefore be classified only under Item 16B.25. Replying to Shri Lakshmi Kumaran, Shri Venkataraman reiterated some of the arguments already advanced by him. He further submitted that the appellants had been specifically licensed by the DGTD for the manufacture of "Compreg". He agreed that "plywood" was a generic term, but contended that "Compreg" was not a species of plywood, as its uses were quite different. He again submitted that the goods should be classified under Item 68.

26. We have carefully considered the agruments advanced on both sides, particularly in relation to the technical characteristics of "plywood" and "Compreg". We find that it would be useful, indeed necessary, to make a distiction between "Wipchek compressed floor board" on the one hand and "Wipchek floor board and Wiptread floor board" on the other.

The first, a sample of which is described in the Chemical Examiner's report with serial number CX. 2941 will (for convenience, and without anticipating our final decision) be referred to as "the compressed variety". The second and third, which are described in the Chemical Examiner's report with serial numbers CX. 2942 and CX. 2943, will similarly be referred to for convenience as "the ordinary variety". The Chemical Examiner's report, apart from general observations which seem to be based on the B.T.N. (now known as C.C.C.N.) and its Explanatory Notes, gives quantitative details of two properties, namely specific gravity or relative density, and moisture content. For the first category the specific gravity is stated to be above 1, and the moisture content is stated to be "very low". For the second category the moisture content is stated to be "much less than 8.0%". No figure is given for the specific gravity, but from the remarks about their having a lower density, and their compression being less, with reference to IS : 3513-1966, it may be taken that the specific gravity was below the minimum prescribed in that specification for "medium density Compreg", that is, less than 0.95.

27. As already mentioned, Shri Venkataraman had filed extracts from a number of books to describe or define "plywood". These however are of very little help when it comes to considering the specific characteristics of "Compreg". However, Shri Venkataraman had also drawn our attention to the section on "Impregnated Laminated Compressed Wood (Compreg)" at pages 139 to 146 of Andrew Dick Wood's book "Plywoods of the World". This also does not give the range of specific gravity of "Compreg", but indicates that it could go up to 1.38. As regards impregnation, it is stated that the veneers are impregnated with a cresylic or phenolic resin before being assembled. It appears that on application of heat and pressure the resin can be polymerised, bonding the impregnated veneers into a homogeneous mass.

28. The only other reference placed before us which gives specifically and in quantitative terms the characteristics of Compreg is IS : 3513 (Part III) - 1966, to which reference has already been made above (para 6 above). We have carefully studied this specification. As already pointed out, it refers to two grades, namely the high density grade with specific gravity from 1.25 to 1.45, and the medium density grade with specific gravity varying from 0.95 to below 1.25. Shri Venkataraman admitted that to his knowledge there was no Indian Standard Specification for "low density Compreg", with density below 0.95 (within which material in the second category could fall). He, however, implied that this did not rule out the existence of such a variety of "Compreg".

29. Our conclusion, from a study of the above-mentioned Indian Standard Specification, is however different. It is not that the specification relates to the high and medium density varieties of "Compreg", without covering a possible third vatiefy, namely "low density compreg". On the other hand, it is quite clear that there is no such thing as "low density Compreg'. The title of the specification is "Specification for High and Medium Density Woodbased Laminates (Compreg)". para 0.2 of the Specification, which is in the nature of a definition, states "High and medium density wood-based laminates, also known as Compreg, are laminates made from thin wood veneers and thermosetting phenol or cresol formaldehyde resins". It is therefore abundantly clear that the term "Compreg" is used as a synonym only for high and medium density wood based laminates. This is further clear from the extracts from Andrew Dick Wood's book on which strong reliance was placed by the learned consultant. "Compreg" is dealt with in Chapter III of Part IV under the heading "(f) Densified Wood Laminates". Under this heading it is stated "Densified wood is known or marketed under a great variety of names,.e.g..."Compreg"...". Compression and densification obviously go together: what is compressed naturally becomes densified, that is, its density or specific gravity increases. Naturally, therefore, material which has been subjected to the process of compression or densification should have a density substantially above the normal. Since even then the density could vary over a range, the classification as "high density Compreg" and "medium density Compreg" is understandable.

However, a third variety known as "low density Compreg" is not conceivable, because to have compressed or densified material which would have a low density is a contradiction in terms. We are therefore of the view that, in the light of what has been stated in Andrew Dick Wood's books as well as in IS : 3513-1966, material whose density falls below the lower limit specified in the IS. Specification, namely 0.95, cannot be called high or medium density wood-based laminate, or as "Compreg". In other words, the material in the second category cannot be regarded as "Compreg".

30. We have already referred to the printed literature filed by Shri Venkataraman, which inter alia shows "comparative properties of Wipchek, teakwood and plywood". We find that in this literature the material is referred to as "impregnated densified wood laminate" and "high density floor board". Elsewhere in the same leaflet, the specific gravity of "Wipchek" is given as "1.2 (nominal)". It is clear therefore that whatever is stated in this literature applies only to "Wipchek compressed floor boards", that is, to material falling within the first category, and that the same properties cannot be transferred to material falling within the second category.

31. In the case of material of the second category, the next question is whether, taking it that it is not "Compreg", it can nevertheless be considered as "plywood". In this context Shri Venkataraman had filed a formidable list showing 21 differences in characteristics between "plywood" and "Compreg". In this statement the reference is to "compressed floor board", which strictly speaking would be applicable only to material of the first category, but we shall take it that the same characteristics are claimed for material of the second category, which is now under our consideration. We had referred earlier (vide paras 5 and 10 above) to this statement. As already stated, it is said to have been compiled by Shri Venkataraman (though not signed by any one). Shri Venkataraman has not claimed that he is an authority on wood-based material; in fact, by having with him Shri A.S. Anand, described as the Development Manager of the appellants and an expert in the field, he implicitly conceded that he was not himself an expert. A statement compiled by Shri Venkataraman in connection with the present proceedings, on the technical issue before us, cannot therefore carry any authority of its own. Except in one or two places no reference to any book or other authority has been given to support what has been claimed in the statement. We must observe that it is not at all difficult to draw a long list of so-called differences between two very similar things or even persons. Thus, one could without much difficulty list 21 or even more differences between two brothers, but it would not necessarily follow that they belonged to two different species. Such attempts at differentiation cannot carry much weight unless they are backed by acceptable authority. In the present case, sudi authority is conspicuously lacking, as the statement has been presented to us with almost no references to authorities. In the circumstances we shall concentrate on those characteristics or properties shown in the statement which appear to be of importance with reference to the two properties of "impregnation" and "compression" where at least there has been some attempt to quote authorities.

32. Shri Venkataraman had sought to differentiate between plywood and Compreg on the basis of "construction" {vide para 11 above). The note submitted by the appellants before the lower authorities only states that the boards "are assembled in cross-grained construction". Some further material, which cannot be readily verified, has been placed before us at the time of hearing, purporting to show the detailed construction of the goods, but even these refer to "Wipchek compressed floor boards", namely to material of the first category. There is thus nothing to show that the material of the second category does not conform to the usual method of construction of plywood. We also find that IS : 303-1975 relating to plywood allows considerable elasticity in this respect. In para 6.2.3 regarding "Grain Direction" it has been stated as follows :- "Unless otherwise specified by the purchaser and except in boards comprising an even number of plies, the direction of grain of the veneer in adjacent plies shall be at right angles to each other, arid that of the outer plies shall run parallel to the larger side of the sheet. In boards comprising an even number of plies, the grain of the centre pair shall follow the same direction. In adjacent plies, in which the grain should be at right angles to each other, a deviation not exceeding 10 may be permited. In all cases, the grain on both faces of the assembled boards shall run in the same direction." Thus, considerable latitude is specifically allowed, and even greater departures are permissible by agreement between the manufacturer and the purchaser. It is also interesting to find that in the case of "Compreg" as described in Andrew Dick Wood's book, various kinds of construction have been described, depending on the intended application of the material. One of these is the "cross-laminated type", in which, as seen from the illustration at page 140, the alternate layers are at right angles to each other. This corresponds to Type VI described in para 3.2.1 of IS : 3513-1966 of which the description is as follows :- "Type VI-In this type the grain and the fibre disposition of the constituent veneers shall be more or less equal in each axis and at right angles to each other.

This type is of high compressive strength in the direction of its thickness and is also rigid. It is suited for sheet and block forms," Thus, the variety of Compreg which is suited for sheet and block forms (and floor boards are obviously required in sheet form) is found to have a construction similar to that of conventional plywood.

33. In view of the above, we do not find significance in the distinction sought to be made between plywood and material of the second category from the point of view of construction.

34. Coming to compression, it has already been seen that the specific gravity of second category material is below the minimum for ''medium density Compreg", and therefore for all Compreg. IS : 303-1975 does not lay down any criteria for the density of plywood, and therefore classification of this material as plywood cannot be ruled out on the ground of compression or density.

35. On the question of impregnation, para 5.2 of IS : 303-1975 lays down that the adhesive used for bonding the veneers in different grades of plywood shall be the corresponding type of adhesive as specified in IS : 848-1974. [The latter Standard refers to synthetic resin adhesives for plywood (phenolic and aminoplastic)]. It added that for CWR grade only (that is, the last grade, which is resistant only to cold water and not to warm or boiling water) cold setting casein glue may also be used. As regards Compreg, IS : 3513-1966 lays down that it is made from thin wood layers and thermo-setting phenol or cresol formaldehyde resins. Thus for both plywood and Compreg there is bonding between the layers and in both cases phenolic resins can be used for the purpose.

The notes furnished before the lower authorities show that it is phenolic resin which is used for impregnation of Wipchek and Wiptread floor boards. We do not therefore find that there is any distinction in this regard also as between plywood and second category material.

36. The Chemical Examiner's report also states that the moisture content is "much less than 8.0%". This is not very comprehensible in the light of the criteria laid down in IS : 303-1975. According to para 6.2.5 of the Specification, the moisture content after pressing should be between 6 and 12%; and according to para 10.3 ibid, the moisture content on test in the prescribed manner should be between 5 and 15%.

In the light of the prescribed range of 5 to 15%. on test, the statement that the moisture content is much less than 8% is of very little help, particularly as moisture content has not been prescribed as a decisive criterion. Therefore, the material cannot be excluded from the category of plywood on the basis of the vague statement regarding moisture content.

37. As regards end-use, we have already observed that what is shown in the printed literature filed by Shri Venkataraman refers to material of the first category. Even the notes filed by the appellants before the lower authorities referred to the use of material as floor boards, which is a recognized use of plywood. (Shri Venkataraman had referred to use of the material as a nuclear shield. We find from page 144/145 of Andrew Dick Wood's book that Coropreg is used only for Secondary Biological Shielding, and that for this purpose it may have to be specially surfaced with a Boron compound. In any case, this applies to Compreg as described in Andrew Dick Wood's book, that is, to material of the first category, and not. to material of the second category, which does not answer to the description Compreg, and with which we are now concerned).

38. Shri Venkataraman had adverted to the fact that originally "Compreg" was included along with Marine plywood and Aircraft plywood among goods falling under Item 16B which were exempted from duty in excess of 7/1/2% ad valorem; and that the reference to "Compreg" was subsequently deleted. He had also referred to a letter of the Central Board of Excise and Customs dated 3-12-73 in which the Board is stated to have been indicated that "Compreg" did not fall under Item 16B as it was a variety of improved wood and therefore its inclusion in the Notification was redundant. The letter of the Board was not placed before us, and we are not able to evaluate this contention ; it could as well be said that Compreg was deleted from the Notification because Government considered that it did not qualify for a concessional rate of duty, unlike marine plywood and aircraft plywood which are essential materials. In any event, the view taken by the Board (more than five years after the issue of the Notification and, therefore, not even deserving to be regarded as contemporanea expositio), cannot override the other considerations which have been set out above.

39. We find substance in the submission of Shri Lakshmi Kumaran that an article cannot be relegated to the residuary Item if it can be said to fall within the scope of a specific Item. We also find substance in his contention that in fiscal legislation, a general term used for describing any commodity covers that commodity in all its forms or varieties : a recent judgment reaffirming this principle is that of the Bombay High Court in the case of Commissioner of Sales Tax v. Agarwal & Co. (1983 E.L.T. 116 Bom.). We find that the goods which we have referred to as material of the second category, namely Wipchek floor board and Wiptread floor board (CX. 2942 and CX. 2943 referred to by the Chemical Examiner) are basically in the nature of plywood and do not vary in any essential respect from the specification for plywood contained in IS : 303-1975. We, therefore, hold that these were correctly classified asp lywood under Item 16B of the Central Excise Tariff.

40. We now come to the material of the first category, namely Wipchek compressed floor board. The Chemical Examiner's report shows that it conforms broadly to IS : 3513 (Part III.)-1966 (there appears to be a typographical error in the Chemical Examiner's report in referring to Part I instead of Part III). The Chemical Examiner's report unfortunately does not specify the moisture content, but since it is stated to be "very low", it could be taken that this falls below the minimum moisture content of 5% as prescribed for plywood. A density of 1.2, as given in the appellants' literature, would bring it well within the category of Compreg, from the point of view of compression.

41. Shri Lakshmi Kumaran had sought to draw a distinction between two varieties of "Compreg", namely the variety made from a single block and that made from several layers bonded together. According to him it was only the first variety which could be considered as falling outside the scope of Item 16B. The second variety, consisting of layers bonded together, should be treated as plywood. Although, on the face of it, there might appear to be some force in this argument, we find ourselves unable to accept it. The IS Specification for Compreg does not anywhere say that it is a variety of plywood. In fact, it is interesting to see that on the back cover of IS : 709-1974, the Specification for Medium Strength Aircraft Plywood, there is a list of "Indian Standards on Plywood". This list refers to nine different Standards, bearing dates from 1957 to 1970, but does not mention IS : 3513 of 1966 for "Compreg". We have also seen that in the ISI Handbook, 1980, IS : 3513 (Part III) -1966 is included in the serially numbered list, but not shown under 'plywood' in the subject-wise list. It is, therefore, clear that the ISI does not treat "Compreg" as a variety of plywood. (Para 10.1. of Standard IS : 3513-1966. shows that the test for tensile strength of Compreg is to be carried out by the same methods as for plywood, but this evidently does not mean that it is plywood). The mere fact that this material is made by assembling a number of layers of impregnated wood does not make it plywood. Since on the evidence before us, the material, namely Wipchek compressed floor board (referred to in Chemical Examiner's report by number CX. 2941) satisfies the requirements of "Compreg", which is not a variety of plywood, and since it is not the Department's case that it falls under any of the other descriptions in Item 16B, we hold that this material was correctly classifiable under Item 68.

42. In the result, we allow the appeal in so far as it relates to "Wipchek compressed floor board" and reject it in so far as it relates to "Wipchek floor board" and "Wiptread floor board". The appellants shall be entitled to consequential relief.


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