Government of India
Ministry of Finance
(Department of Revenue)
Central Board of Excise & Custom, New Delhi
Subject: Central Excise- Classification of track insulating liners used by the Railways – Regarding
I am directed to say that doubts have arisen about the classification of track insulating materials of plastics such as insulating liners, insulating end post, insulating plates, glass filled nylon liners, washers etc. manufactured for use by Railways. These products are reportedly used by the Railways for electrical insulation in track circulated section of railway to prevent flow of electric current from one railway track section to another railway track section. The issue is whether these goods merit classification under sub-heading 3926.90 as articles of plastics or as electrical insulators falling under Chapter Sub-heading 8546.00 of CETA, 1985.
2. It has been represented that insulating liners are made of plastic and is one of the un-assembled track fitting item of the rail fastening assembly and to be classified according to the consistent material used in the manufacture and therefore, are classifiable under sub-heading 3926.90 of CETA, 1985 as “other articles of plastics”.
3. The matter as been examined in depth by the Board. HSN note at page 1406 explains that insulators are made of any insulating material including plastic and are used on outdoor cables for example, electrical traction systems (railway, tram-way, trolley buses etc.). As per the information provided by Indian Railways and Rail India Technical & Economic Services (RITES), the goods in question are used in the fabrication of “Insulated rail joints” to prevent flow of electric current from one railway track section to adjacent section. The Board as observed that since the products are used for insulation purposes, these are automatically excluded from the purview of Chapter 39 of the Tariff in view of the Chapter Note 2(n) to Chapter 39 as the “Electrical inculcators” of any material are classifiable under heading 85.46 and falls within Section XVI to the Tariff. The Board is, therefore, of the view that the goods in question viz. track insulating materials of plastic such as insulating liners, insulating end post, insulating plates, glass filled nylon liners, washers etc. are correctly classifiable under sub-heading 8546.00 of Central Excise Tariff Act, 1985 as “electrical insulators or any materials”.