1990(06)LCX0071
BEFORE THE CEGAT, SPECIAL BENCH ‘C’, NEW DELHI
S/Shri G. Sankaran, President and G.A. Brahma Deva, Member (J)
APOORVA IMPEX
Versus
COLLECTOR OF CUSTOMS
Order No. 657/90-C, dated 28-6-1990 in Appeal No. C/3348/88-C
Cases Quoted
RANBAXY LABORATORIES LTD. v. COLLECTOR - 1988 (34) E.L.T. 375 [PARA 5]
[Order per : G., Sankaran, President]. – The appellants imported a consignment of Titanium Dioxide (TiO2) per S.S. Sincerity at the port of Bombay. It was declared in bill of entry No. 2231 dated 6-3-1987 as “Titanium Dioxide Rutile – A Prepared Pigment” and clearance was south under Licence P/K/3108651/C/XX/97/B/85 dated 23-12-1985 which was valid for the import inter alia of TiO2 (Rutile Grade). Pending test, 80% of the goods was released. The test revealed the goods to be a white pasty mass containing TiO2, artificial resin (acrylic type) and solvent. After issue of show cause notice and holding adjudication proceedings, the Dy. Collector of Customs, by Order dated 2-11-1987, held that the licence was not valid to cover the import. He confiscated the goods under Section 111(d) of the Customs Act, 1962 but allwed redemption of the goods on payment of fine of Rs. 75,000/- only. He also denied the benefit of the Customs Notification No. 444/76 and demanded Rs. 1,35,185.64 as short-levied duty on the consignment on the basis that the goods were a preparation based on TiO2 and not TiO2 itself. The classification of the goods was ordered to be under Heading No. 3208.90 of the Customs (Appeals), by the impugned order dated 4-5-1988, upheld the Dy. Collector’s order as regards the confiscation of the goods and the fine imposed for their redemption. However, he upheld the appellants’ claim for classification of the goods under Heading No. 3206.10 of the Customs Tariff Schedule. But the benefit of Notification No. 444/86 was denied on the footing that it applied only to TiO2 and not a preparation based on TiO2.
2. We have heard Shri T.V. Krishna Murthy, learned Consultant for the appellants and Shri S. Chakraborti, learned JDR for the respondent Collector.
3. Customs Notification No. 444/86 exempts Ti02 falling within Chapter 28 or 32 of the Tariff Schedule from the duty leviable thereon under the Schedule as is in excess of 60% ad valorem and from the whole of the additional duty of customs leviable under Section 3 of the Customs Tariff Act. The submission for the appellants is that Ti02 falls under Heading 28.23 (2823.00 reading “Titanium Oxides”) and “Pigments and preparations based on Ti02" under Heading 32.06 (3206.10). The Notification applies to Ti02 falling in Chapter 28 or 32. Since the subject goods is a pigment based on Ti02, its essential character is due to Ti02 and so, the Notification applies. The submission for the respondent is that the exemption is for Ti02 and the goods not being Ti02 are not covered by the Notification.
4. We find force in the appellants’ contention. It must be presumed that the framers of the Notification knew what they were talking about when they exempted not only Ti02 which fell (obviously) under Chapter 28 but also Ti02 falling under Chapter 32. Reading through the other headings in Chapter 32, there appears to be no other heading appropriate to Ti02. If, then, the Notification specifies Ti02 falling within Chapter 32, it must be taken to refer only to Heading 32.06 (3206.10). In this context, we note that the goods are described in the invoice as “Titanium Dioxide Rutile (A Prepared Pigment)”. The Technical Information sheet on the product states that the product “is an aqueous suspension containing Titanium Dioxide Rutile (content whereof present in this product is more than 80%), a small quantity of preservative/binding material and very small percentage of solvent for imparting uniformity while using the above product in textile and leather processing wings.” It is added: “though in paste, the product exhibits all characteristics of Titanium Dioxide (Rutile) in powder form and can be used to replace Titanium Dioxide (Rutile) in powder form with advantage of non-dusting on floorshop and ease of operation”. It is thus clear that the product is Ti02 (Rutile) made into a ready or easy to use form as a preparation thereof. Since the Notification covers Ti02 falling under Chapter 32 and Ti02 falls therein only as a pigment or preparation based on Ti02 and, in this case, the product is Ti02 made into a preparation for easier and improved use thereof, we do not see any justification to deny the benefit of that Notification to the goods. The licence produced for clearance of the goods permitted the import of Ti02 (Rutile grade), the submission of the D.R. is that only Ti02 (Rutile grade) and not preparation thereof are permissible for import under the licence.
5. The D.R. submits by reference to page 1102 of “The Encyclopedia of Chemistry” - Third Edition - edited by Clifford A. Hampel and Gessner G. Hawley that rutile is a crystalline modification of Ti02 which exists in three crystalline forms : anas-tase, brookite and rutile. However, the present goods are in paste form with other ingredients. In our view, this submission is devoid of merit since the technical information sheet on the product, as we have noted, shows that it is an aqueous suspension containing Ti02 (Rutile). The Customs Laboratory says that the product is a white pasty mass (the information sheet also says so) but does not seem to have tested the Ti02 for its crystalline structure. The product must, therefore, be taken to be only Ti02 (Rutile) in suspension, in a form which admits of easier and improved use of Ti02. In this view of the matter, the reliance placed by the D.R. on the Tribunal’s decision in Ranbaxy Laboratories Ltd. v. Collector of Customs, New Delhi, 1988 (34) E.L.T. 375 to the effect that the CCCN code given against various serial numbers in the ITC Policy is merely to facilitate collection of data and not as a guidance for interpreting the scope of the entries in the ITC Policy, is of no assistance to the Revenue.
6. In the result, we set aside the impugned order and allow the appeal with consequential relief to the appellants.
Equivalent 1990 (49) ELT 591 (Tribunal)