1994(05)LCX0086

IN THE CEGAT, SPECIAL BENCH, `D’, NEW DELHI

S/Shri K.S. Venkataramani, Member (T), G.A. Brahma Deva, Member (J) and P.K. Kapoor, Member (T)

HINDUSTAN NATIONAL GLASS & INDUS. LTD.

Versus

COLLR. OF CUS., CALCUTTA

Order No. C/257/94-D, dated 2-5-1994 in Appeal No. C/3107/90-D

Advocated By : S/Shri B. Saha, Advocate, for the Appellant.

 Shri M.K. Jain, SDR for the Respondents.

[Order per : K.S. Venkataramani, Member (T)]. - The appellants herein imported a consignment described in the Bill of Entry as refractory compo- nents for glass furnace FONDAL SCW. Appellants claimed classification under sub-heading 6902.20 CTA as refractory bricks, but the Department assessed the goods under sub-heading 7016.90 which covers paving blocks, slabs, bricks etc. of glass of a kind used for construction purposes. The appellants after clearing the goods filed a refund claim for re-assessment under Heading 6902.20 which was rejected by the Assistant Collector of Customs, Appraising Refunds Section, Custom House, Calcutta by his order dated 19-1-1990. The Asstt. Collector found that the chemical analysis indicated composition as 98.9% silica oxide, and the literature indicating the goods as fused silica bricks and hence the original assessment was found in order. The appeal against Asstt. Collector’s order was also rejected by the Collector of Customs (Appeals), Calcutta by the impugned order dated 25-7-1990 who held that the composition of the goods for classification under sub-heading 6902.20 should be of more than 50% alumina whereas goods imported consisted of 98.9% silica.

2. Shri B. Saha, learned Counsel for the appellants contended the lower authorities have erred in their interpretation of sub-heading 6902.20 and that it should in fact be read to mean that refractory bricks of more than 50% silica are also covered thereunder. The learned Counsel referred to HSN Explanatory Notes under Chapter 69 which shows that silica refractory is also one type of refractory covered thereunder. Reference was also made to ISI Glossary of Terms relating to refractory materials IS : 4041-1987 for the same purpose. The learned Counsel referred to Textual authority “Refractories - Manufacture, Properties and Applications” by A. Rashid Chesti emphasis that Silica refractories are special type refractories with high temperature resistance. The learned Counsel urged that these are not classifiable as glass material under Chapter 70 CTA because they are different from glass in the sense they can withstand high temperature, they are not brittle and they are porous.

3. Shri M.K. Jain, learned Senior Departmental Representative contended that the wording of tariff sub-heading 6902.20 makes it clear that only refractory bricks with more than 50% alumina will be covered thereunder. Learned Senior Departmental Representative also referred to articles of silica being covered under Chapter 70 CTA with reference to Chapter Note 4 to Chapter 70. In the present case silica gives the goods their essential character and are hence correctly classified under Chapter 70.16 CTA by applying Rule 3(b) of Rules for Interpretation of the Tariff.

4. The submissions made have been carefully considered. The competing heading and sub-headings in CTA are 69.02 and 6902.20, on the one hand, and 70.16 and 7016.90 on the other. These read as follows :-

It is seen that the CTA headings closely follow the HSN and as such it is a well settled principle to look to the Explanatory Notes thereunder for the scope of the tariff headings since HSN Explanatory Notes reflect international expertise in tariff classification of goods in international trade and commerce. At Page 913 of HSN Explanatory Notes sub-para (B) spells out the scope of refractory goods made in Heading 69.02 and 69.03 and also gives the main types of refractory goods as follows :-

“(B) In Headings 69.02 and 69.03 refractory goods, i.e. fired articles having the special property of resisting high temperatures as met in metallurgy, the glass industry, etc. (e.g. of the order of 1,500^oC and higher). According to the particular uses for which they are intended, refractory articles may also need to withstand rapid changes of temperature, be either good thermal insulators or conductors, have a low coefficient of thermal expansion, be porous or dense, resist the corrosive effects of products with which they come into contact, have a good mechanical strength and resistance to wear, etc.

However, to fall in Heading 69.02 or 69.03 as refractory goods, articles must not only be capable of resisting high temperature, they must also be designed for high temperature work. Heading 69.03 would therefore include crucibles of sintered alumina, but textile machine thread guides of the same material would fall in Heading 69.09 since they are designed for clearly non-refractory uses.

The main types of refractory goods are :

(1) High alumina refractories based either upon bauxite, mullite or corundum (sometimes mixed with clays) or on kyanite, sillimanite or andalusite (aluminium silicates) mixed with clays, or on sintered alumina.

(2) Alumino-silicate refractories (e.g. based upon fire-clay with some chamotte or grog).

(3) Silica and semi-silica refractories (based upon sand, crushed quartz, flint, etc., and bonded with clay or lime).

(4) Magnesite refractories based upon magnesite (giobertite), sea-water magnesia or dolomite; refractories based upon chromite or chromium oxide; chrome-magnesite refractories.

(5) X    X    X    X    X    X    X

(6) X    X    X    X    X    X    X

(7) X    X    X    X    X    X    X

(8) X    X    X    X    X    X    X

Refractory materials are used mainly to line blast furnaces, coke ovens, petroleum cracking plants, glass, ceramic and other industrial furnaces, and in the manufacture of pots, crucibles, and other plant for the chemical, glass, cement and aluminium and other metallurgical industries.

These should be read with the Notes under Heading 69.02 which are as follows :

This heading covers a group of refractory products (other than those of Heading 69.01) normally used in the construction of ovens, kilns, furnaces or other plant for the metallurgical, chemicals, ceramic, glass and other industries.

It includes, inter alia :

(1) Bricks of all shapes (parallelepiped, wedge shaped, cylindrical, semi-cylindrical, etc.), including keystones and other specially shaped bricks (e.g., runner bricks, concave on one face and rectilinear on the other) even if they are clearly recognisable as being of the kind specially designed for the construction of plant or machinery of Section XVI.

(2) Refractory blocks and tiles for flooring, walls, hearths, etc."

5. From the above it is clear that the present goods which have a special property of high temperature resistance upto 1700^oC and go in to form part of glass furnace, will fall within the ambit of sub-heading 6902.20 as silica refractory bricks and by the same logic, the classification of the goods under Chapter 70 CTA gets ruled out. Further, in order to bring the goods under Heading 70.16 CTA, the Department has also to show that the goods are glass articles obtained by pressing or moulding. There is no such evidence. The appellants have led sufficient evidences by way of textual authorities that the goods in question are special type refractories. In the result, there is a lot of substance in the appeal which is allowed, and it is held that the imported refractory bricks in this case are classifiable under Heading 6902.20 CTA, 1975.

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Equivalent 1994 (71) ELT 867 (Tribunal)