1988(05)LCX0090

BEFORE THE CEGAT, SPECIAL BENCH ‘B2’, NEW DELHI

S/Shri H.R. Syiem, Member (T) and G.P. Agarwal, Member (J)

MODI RUBBER LIMITED

Versus

COLLECTOR OF CUSTOMS

Order No. 304/88-B2, dated 5.5.1988 in Appeal No. C/2196/83-B2

Cases Referred

Dunlop India v. U.O.I. - 1983 ELT 1566 (0SC)                                                                           Para 7]

1987 (32) ELT 122                                                                                                         [Paras 2 & 8]

Advocated By: None, for the Appellants.

Shri J. Gopinath, S.D.R., for the Respondents.

[Order per: H.R. Syiem, Member (T)]. - The goods in dispute are a consignment of tube, valve-type TR-78A cleared under the bill of entry No. 11069 dated 23/24.5.1980 imported at the port of Calcutta. The Custom House assessed them under 64.61(1).

2. The importers did not appear at the hearing, so we heard the learned SDR. He supported the order of the Collector of Customs (Appeals) No. Cal-Cus-669-70/83, dated 24.3.1983. He supported himself during his argument with 1987 (32) ELT 122 re : Lee and Muirhead.

3. The valves, according to the order of the Collector (Appeals), are made of copper alloy. The importers argue in their appeal that since the valves are made of corrosion resisting material, and there being a specific item in the tariff to cover it, it should not be placed under a residuary item. The Collector wrote after examining Heading 84.61(2) claimed by the importers that the relevant portion reads :

Valves made of corrosion resisting material such as stainless steel, nickel, monel, incoloy, hastelloy and other valves lined with rubber or other corrosion resisting materials.

From this the Collector (Appeals) concluded that the corrosion resisting materials have been specified as stainless steel, nickel, monel, incoloy, hastelloy. “Even all the alloys of nickel - one of the most well-known anti-corrosion metal - have not been considered as anti-corrosion materials for the purpose of this heading since monel and incoloy, alloys of nickel, have been separately specified”, he said. In addition, the heading also includes valves lined with rubber or other corrosion resisting materials, and the goods in question are not lined with rubber or other corrosion resisting materials. Since the goods are made of copper alloy, the Collector did not consider classification under 84.61(2).

4. It is difficult to agree with this assessment. The heading covers valves made of corrosion resisting materials such as stainless steel nickel, monel etc.; this does not require the valves to be always made of these materials but only of materials such as the ones listed. The words such as listed the kind or category of corrosion resisting material, since it would make the list too long to name them all. It is enough to illustrate just a few of the materials of which the valves should be made, those listed being only some; there are many others of the same kind such as these made of copper alloys, nickel alloys etc. If these valves are made of copper alloy, then I hold them to be covered by the description, and they would fall in Heading 84.61(2).

5. It is an error to say that alloys of nickel have not been considered to be anti-corrosion materials because the list names monel and incoloy. Any alloy of nickel, if it is a corrosion material, is listed by clear implication in the definition.

6. The fact that the goods are not lined with rubber or other corrosion resisting materials is quite irrelevant and the Collector (Appeals) should not have taken this point.

7. Towards the end of his order the Collector (Appeals) says that in deciding a case like this, cognizance is also to be taken of the trade practice; and in trade these valves are traded and known as inner tube valves as distinct from valves made of corrosion resisting materials. This is totally erroneous. There is never any trade in valves made of corrosion resisting materials. And because in the trade these valves are known as inner tubes valves, they do not cease to be valves made of corrosion resisting materials. Furthermore, the clear definition in the law takes precedence over trade practices and parlance. The Collector himself quotes the judgment of the Hon’ble Supreme Court in Dunlop India v. Union of India -1975(10)LCX0016 Eq 1983 (013) ELT 1566 (SC) = A.I.R. 77 SC 597 which held that when an article has a reasonable claim to be classified under an enumerated item in the schedule, it will be against the very principle of classification to consign it to the residuary clauses; but that is what the Collector has done. These valves have more than a reasonable claim to be classified under 84.61(2) as valves made of corrosion resisting materials, but the lower authorities have consigned them to the residuary sub-heading (1) for not elsewhere specified.

8. The learned SDR quoted 1987 (032) ELT 122 re : Lee and Muirhead to support his arguments. That case, however, discussed non-return valves and the goods were held not to be such valves, and that free flow of A.I.R. can take place both ways. In the present case there can be no free flow of A.I.R. both ways. Once A.I.R. is injected into the tube, it remains trapped inside and can be released only by relieving/removing the constriction/pressure at the valve point. The flow of the A.I.R. is in one direction, into the tube, and the valve blocks reversal of the flow. These, therefore, are non-return valves, different from the Lee Muirhead valves.

9. The bench (in Lee Muirhead) was further dissatisfied by the lack of evidence to show that the valves were corrosion resisting materials, and by the absence of anything to show that the valves were resistant to the corrosion of the fluid passing through them. In these circumstances, the bench would not very well have been satisfied that the valves were of corrosion resisting metal.

10. But we do not have this difficulty. We know that these valves are of copper alloy, and we also know that they are corrosion resistant to the fluid, A.I.R., which will pass through them. In short, they are valves made of corrosion resisting copper alloy. That decision is not applicable here.

11. I direct assessment to be made under 84.61(2) and all other actions necessary from this assessment to be taken accordingly.

12. I agree.

Equivalent 1989 (39) ELT 575 (Tribunal)