1993(12)LCX0064
BEFORE THE CEGAT, SPECIAL BENCH ‘D’, NEW DELHI
S/Shri Harish Chander, President and P.K. Kapoor, Member (T)
HINDUSTAN ALUMINIUM CORPN. LTD.
Versus
COLLECTOR OF CUS., CALCUTTA
Order No. C/461/93-D, dated 20-12-1993 in C/Appeal No. 2003/90-D
Cases Quoted
Voltas Ltd. v. Collector — 1991(02)LCX0092 Eq 1991 (056) ELT 0569 (Tribunal) [Para 4]
and 1992(03)LCX0016 Eq 1992 (061) ELT 0088 (Tribunal) [Para 4]
Mitra Prakashan Pvt. Ltd. v. Collector — 1990(08)LCX0003 Eq 1991 (051) ELT 0111 (Tribunal) [Paras 8, 9]
Advocated By : Shri K.K. Kapoor, Consultant, for the Appellants.
Smt. J.M.S. Sundaram, SDR, for the Respondents.
[Order per : P.K. Kapoor, Member (T)]. - This is an appeal against the order dated 24th November, 1988 passed by the Collector of Customs (Appeals), Calcutta. Briefly stated the facts of the case are that the appellants imported ‘Ceramic Fibre Blocks (Pyro Blocks) for industrial furnaces. In the Bill of Entry filed on 8-5-1987 in respect of the imported goods, assessment was claimed under Heading 6806.90 read with Notification No. 26/84-Cus., dated 22-2-1984 at 40% basic duty + nil auxiliary + 12% C.V. duty. New sub-heading 9806.00 was introduced from 1-3-1984 for “Parts of machinery, equipments, appliances, instruments and articles of Chapters 84, 85, 86, 89 and 90”. The Custom House was of the view that the imported goods were assessable under Heading 9806.00 read with Notification No. 69/87 dated 1-3-1987 at 45% basic + 40% auxiliary + ‘Nil’ C.V. duty. The goods were cleared provisionally under Heading 6806.90. After clearance of the goods the assessment was finalised by the order dated 11-3-1988 passed by the Assistant Collector by which the goods were finally assessed under Heading 9806.00 read with Notification No. 69/87 dated 1-3-1987 as parts of industrial furnace and the demand for differential duty amounting to Rs. 4,16,363.07 was confirmed.
2. The appellants filed an appeal against the order passed by the Assistant Collector. However, the Collector (Appeals) upheld the order passed by the Assistant Collector on the grounds that “Pyro Blocks” being parts of industrial furnaces falling under Heading 8514.90 they would be classifiable under Heading 9806.90 in terms of Note 1 to Chapter 98 even if they are covered by a more specific heading elsewhere in the tariff schedule.
3. On behalf of the appellants Shri K.K. Kapoor, the learned Consultant appeared before us. He stated that the imported “Ceramic Fibre Block (Pyro Blocks)” being parts of industrial furnaces were classifiable under Heading 68.06. He contended that it was evident that “Ceramic Fibre Blocks or Pyro Blocks would be assessable under Heading 68.06 since even after the introduction of Heading 98.06, the Notification No. 26/84 which covers ”Ceramic Fibre Blocks (Pyro-blocks)” falling under Heading 68.06 had not been rescinded. He submitted that ‘Pyro Blocks’ being insulating material falling under Heading 68.06 and being covered by Notification No. 26/84 dated 22-2-1984 would be excluded from the purview of Heading 98.06 by virtue of Note 7(d) of Chapter 98 which provides that Heading 98.06 will not cover any part of machinery which the Central Government notifies as being of general application. On these grounds he pleaded that the impugned order may be set aside.
4. On behalf of the respondents Smt. J.M.S. Sundaram, the learned SDR stated that in terms of Note 1 to Chapter 98 the Chapter was applicable to all goods which satisfied the conditions prescribed therein, even though they might be covered by a more specific heading elsewhere in the schedule. She added that after the introduction of Heading 98.06 with effect from 1-3-1984, all parts of machinery, equipments, appliances, instruments and articles of Chapters 84, 85, 86, 89 and 90 even when specifically covered by any other heading of the Tariff Schedule, became classifiable under Heading 98.06. She stated that the imported ceramic fibre blocks being parts of Industrial Furnaces falling under Heading 85.14 were therefore correctly assessable under Heading 98.06 read with Notification No. 69/87 dated 1-3-1987. She contended that the disputed goods being classifiable under Heading 98.06 they were not eligible for the benefit of the Notification No. 26/84-Cus., dated 22-2-1984 which exempted goods falling under Heading 68.06. She added that there was no force in the appellants’ contention that in respect of the imported goods the appellants would be entitled to exemption under Notification No. 26/84-Cus., dated 22-2-1984 by virtue of Note 7(d) to Chapter 98. She stated that in terms of Note 7(d) only such parts of articles of Chapters 84, 85, 86, 89 and 90 which are notified in terms of the provisions of Note 7(d) on account of being of general application can be deemed to be excluded from the purview of Heading 98.06. On these grounds she pleaded for the rejection of the appeal. In support of her contentions she cited the following case law :-
(i) M/s. Voltas Ltd. v. Collector of Customs - 1991(02)LCX0092 Eq 1991 (056) ELT 0569 (Tribunal)
(ii) M/s. Voltas Ltd. v. Collector of Customs - 1992(03)LCX0016 Eq 1992 (061) ELT 0088 (Tribunal)
5. We have examined the records of the case and considered the submissions made on bahalf of both sides. It is seen that the only question that arises for consideration in this case is whether at the relevant time the disputed “ceramic fibre blocks (pyro blocks)” were assessable under Heading 68.06 read with Notification No. 26/84-Cus., dated 22-2-1984 as claimed by the appellants or under Heading 98.06 read with Notification No. 69/87-Cus., dated 1-3-1987 as contended by the Revenue.
6. According to the appellants the goods in question viz. “Ceramic fibre blocks (pyro blocks)” are essentially heat insulating materials which are used in industrial furnaces for preventing the leakage of heat. On a plain reading of the Notification No. 26/84-Cus., dated 22-2-1984 which is reproduced below, it follows that prior to the introduction of the Heading 98.06 with effect from 1-3-1984, “Ceramic Fibre Blocks (Pyro Blocks)” were classifiable under Heading 68.06 :-
“In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts ceramic fibre blocks (Pyro-Blocks), falling under Heading No. 68.06 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India for use as component parts of industrial furnaces, from so much of that portion of the duty of customs leviable thereon which is specified in the said First Schedule as is in excess of the amount calculated at the rate of 40 per cent ad valorem.”
7. “Ceramic Fibre Blocks (Pyro Blocks)” are admittedly parts of Industrial Furnaces falling under Chapter 85 of the Tariff Schedule. Hence, we are inclined to agree with the learned SDR that after the introduction of the Heading 98.06 in the Tariff Schedule with effect from 1-3-1984, by virtue of Note 1 to Chapter 98 these items became classifiable under the Heading 98.06. We find that the learned SDR is also correct in pointing out that Notification No. 26/84-Cus., dated 22-2-1984 issued in exercise of the powers under sub-section (1) of Section 25 of the Customs Act, 1962 can have no relevance to Note 7(d) of Chapter 98, since as provided in that note, only such items which are specifically notified by the Central Government, having regard to their nature of being parts of general applicability can be deemed to be excluded from the purview of Heading 98.06.
8. It is seen that the item ‘Ceramic Fibre Blocks (Pyro-Blocks)’ was specifically covered by Notification No. 26/84-Cus., dated 22-2-1984 which was in force when the disputed goods were imported. Hence, the point that still needs to be examined is whether in respect of the imported ‘Ceramic Fibre Blocks (Pyro-blocks)’ which on importation were assessable under Heading 98.06 the benefit of the Notification No. 26/84-Cus., dated 22-2-1984 could be availed by the appellants. In this regard we find that in the case of Mitra Prakashan Pvt. Ltd. v. Collector of Customs, reported in 1991 (051) ELT 111, the Tribunal has held that availment of the benefit of exemption from basic duty under Notification No. 132/85 dated 19-4-1985, in respect of a ‘Colour Scanner’ imported under the Project Import Regulations under Heading 98.01 would not have the effect of debarring the importers from the benefit of exemption from auxiliary duty of Customs under Notification No. 311/86 dated 13-5-1986 which covered ‘Colour Scanners’ falling under Chapter 90. Paras 20 and 21 of the said decision being relevant are reproduced below :-
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9. On the ratio of the decision of the Tribunal in the case of Mitra Prakashan Pvt. Ltd. v. Collector of Customs, we hold that even though the imported “Ceramic Fibre Blocks (Pyro Blocks)” were assessable under Heading 98.06, the appellants were eligible for the benefit of the Notification No. 26/84-Cus., dated 22-2-1984 which continued to be in force even after the introduction of the new sub-heading 98.01 and under which “Ceramic Fibre Blocks (Pyro-Blocks)” while being specifically mentioned were shown as falling under Heading 68.06.
10. In view of the above discussion the appeal is allowed with consequential relief to the appellants.
Equivalent 1994 (69) ELT 749 (Tribunal)