1997(02)LCX0113

IN THE CEGAT, SOUTH ZONAL BENCH, MADRAS

S/Shri V.P. Gulati, Vice President and T.P. Nambiar, Member (J)

COMMISSIONER OF CUS., MADRAS

Versus

ANDHRA PRADESH PAPER MILLS LTD.

Order No. 987/97, dated 19-2-1997 in Appeal No. C/R-66/96

Advocated By : Shri R. Victor Thyagaraj, SDR, for the Appellant.

Shri S.V. Rao, Asstt. Manager, for the Respondents.

[Order per : V.P. Gulati, Vice President]. - This appeal has been filed by the Revenue against the order of the learned lower appellate authority under which he has held the goods namely Washers and Retaining Rings and Steel Balls are classifiable under the Heading 84.81. The Revenue seeks assessment of the same under Tariff Heading 73 i.e. for washers and Retaining Rings under 73.18 and for the valves under 73.26.

2. The learned SDR for the Department has drawn our attention to Chapter Note 1(g) of Section XVI under which it has been stated that parts of general use as defined under Note 2 to Section XV of Base Metal (Section XV) or similar goods of plastic (Chapter 39) are not covered under Section XVI under which Chapter 84 falls. Referring to the definition of Parts of General Use as set out under Note 2 to Chapter XV he has pleaded that the scope of the expression “parts of general use” is elaborated in Note 2. The said Note 2 is reproduced below for convenience of reference :

“2. Throughout this Schedule, the expression ”parts of general use" means :

(a) Articles of Heading No. 73.07, 73.12. 73.15, 73.17 or 73.18 and similar articles of other base metal;

(b) Springs and leaves for springs, of base metal, other than clock or watch springs (Heading No. 91.14); and

(c) Articles of Heading Nos. 83.01, 83.02, 83.08, 83.10 and frames and mirrors, of base metal, of Heading No. 83.06.

In Chapters 73 to 76 and 78 to 82 (but not in Heading No. 73.15) references to parts of goods do not include references to parts of general use as defined above.

Subject to the preceding paragraph and to Note 1 to Chapter 83, the articles of Chapter 82 or 83 are excluded from Chapters 72 to 76 and 78 to 81."

He has pleaded under the Heading 73.18 the washers and similar articles are covered. The washers therefore imported and the retaining ring which are articles similar to washer would therefore by virtue of Section Note 1(g) of Section XVI and Chapter Note 2 of Section XV will fall under this Heading. So far as the balls are concerned he has pleaded that in terms of Section Note 6 to Chapter 84 only articles of specified category as well as which answer to the parameters set out under this note will be covered under that heading and all others will fall under Chapter Heading 73. This Chapter Note 6 is reproduced below for convenience of reference :

“6. Heading No. 84.24 applies, inter alia, to polished steel balls, the maximum and minimum diameters of which do not differ from the nominal diameter by more than 1% or by more than 0.05 mm, whichever is less. Other steel balls are to be classified in Heading No. 73.26.”

He has pleaded that the appellants have not established that the balls which had been imported by them answers to the parameters set out under Chapter Note 6 to Chapter 84. The goods therefore he has pleaded are rightly classifiable under Chapter Heading 73.26.

3. Shri S.V. Rao, the learned representative of the appellant firm has pleaded that the items imported have a functional role to play in the valves and therefore by virtue of the functional role and also by virtue of the fact that these are specifically designed for use in the valves these would be classified under Tariff Heading 84.81.

4. We have considered the pleas made by both the sides. We observe that Customs Tariff is framed on the scheme of HSN and various Section Notes and Chapter Notes are provided for the purpose of classification of the goods. As per the interpretative rule to the Customs Tariff the classification of goods has to be done after taking into consideration various Section Notes and Chapter Notes along with the description under the Tariff Headings. The learned SDR for the Department has rightly contended that “parts of general use” are specified under Section No. 2 to Section XV. Once they are identified to be so they are to be classified under Chapter 73 under the respective headings. The washers and retaining rings are covered by the description of Chapter Heading 73.18 and going by Section Note 1(g) of Section XVI and Section Note 2 of Section XV these goods have been rightly urged to be classifiable under Tariff Heading 73.18. We therefore order accordingly and hold that the learned lower authority was in error in having classified the goods under Tariff Heading 84.81. So far as the balls are concerned Chapter Note 6 to Chapter 84 clearly sets to the parameters of the ball for the purpose of classification under Chapter 84. The learned representative was asked to explain how the appellants’ item answers to the category of balls as are covered under the Chapter Note 6. He could not furnish any information in this regard. Taking into consideration the nature of the use of the article and that it is only steel balls we hold that based on Chapter Note 6 the same would be correctly classifiable under Chapter Heading 73.26. We therefore set aside the order of the learned lower authority and allow the appeal of the Department.

Equivalent 1997 (94) ELT 110 (Tribunal)

Equivalent 1997 (021) RLT 0103 (CEGAT)