1994(03)LCX0014
IN THE CEGAT, SPECIAL BENCH `D’, NEW DELHI
S/Shri K.S. Venkataramani, Member (T) and G.A. Brahma Deva, Member (J)
SHRIRAM FOODS & FERTILISERS INDUSTRIES
Versus
COLLR. OF CUSTOMS, BOMBAY
Order No. C/126/94-D, dated 4-3-1994 in A. No. C/1602/92-D
CASE CITED
Albright, Morarji and Pandit Ltd. v. Collector — 1987(11)LCX0040 Eq 1988 (033) ELT 0488 (Tribunal) [Paras 2, 5]
Advocated By : Shri R. Subramaniam, Advocate, for the Appellants.
Shri M.K. Jain, SDR, for the Respondents.
[Order per : K.S. Venkataramani, Member (T)]. - The appellants herein imported a consignment in November, 1991 spare parts for their furnace burner installed in their HCL Plant. They claimed assessment of the goods as parts of furnace burner sub-heading 8416.90 CTA, 1975. However, the Asstt. Collector of Customs-Group 3, Bombay Custom House passed an Order-in-assessment dated 17-1-1992 classifying the goods under sub-heading 6815.10 CTA as non-electical articles of graphite and on the reasoning that in terms of Chapter Note 1(a) to Chapter 84 CTA such articles falling under Chapter 68 were excluded from Chapter 84. The appellants claimed that the goods imported being of artificial graphite will not fall under Heading 68.15 which covers only natural graphite was rejected. The appeal against the Asstt. Collector’s order was also rejected by the Collector of Customs (Appeals), Bombay in the impugned Order dated 7-4-1992.
2. Shri R. Subramaniam, learned Consultant appearing for the appellants argued that Heading 68.15 CTA covers articles of mineral substances whereas the goods herein are of artificial graphite and hence will not fall under that heading. He cited and relied upon Tribunal decision in the case of Albright, Morarji and Pandit Ltd. and Another v. CC, Bombay - reported in 1988 (033) ELT 488. The Tribunal laid down that graphite blocks made of artificial graphite and phenolic resin is not classifiable under Heading 68.15 but under Chapter 84 CTA, as they are not mineral substances. In this case, learned consultant urged, it is not in dispute that the goods are made of artificial graphite. In the above cited decision of the Tribunal HSN Explanatory Notes had also been considered and it is well settled, pleaded the learned consultant, that they have only persuasive value and no statutory force. It is the terms of the tariff heading which is the criterion for classification. The learned consultant argued that the change in CTA to be in accordance with HSN after 28-2-1986 will also be not material because Heading 68.15 under CCCN and HSN is identically worded.
3. Shri M.K. Jain, learned SDR contended that the fact that the goods imported are of artificial graphite is not material for its classification under sub-heading 6815.10 CTA which makes no distinction between artificial and natural substances and this view is also backed up by HSN Explanatory Notes. Chapter Note 1(a) to Chapter 84 CTA excludes such goods from that Chapter. The learned SDR also pointed out that the present case is under HSN based Customs Tariff and ratio of decisions on earlier Tariff on CCCN will not be rele- vant as has rightly been stressed in the impugned Order of Collector (Appeals).
4.The submissions made by both the sides have been carefully considered. The admitted fact is that the spare parts imported are made of artificial graphite. If the question whether these would fall under sub-heading 6815.10 CTA is answered in the affirmative then, they are ipso facto excluded from classification under sub-heading 8416.90 CTA as parts of furnace burners because of Chapter Note 1(a) to Chapter 84 CTA which says that the Chapter excludes mill stones, grind stones and other articles of Chapter 68. Heading 68.15 with the relevant sub-heading reads as follows :
“68.15
Articles of stone or of other mineral substances (including articles of prat), not elsewhere specified or included.
6815.10
Non-electrical articles of graphite or other carbon."
It is seen that sub-heading 6815.10 under Heading 68.15 is preceded by “-” (single dash). According to the General Explanatory Note (1) to the CTA, “Where in column (3) of this Schedule, the description of an article or Group of articles under a heading is preceded by ” - “, the said article or group of articles shall be taken to be a sub-classification, of the article or group of articles covered by the said heading .....” Therefore, sub-heading 6815.10 has necessarily to be construed and takes it colour with referene to Heading 68.15. This heading covers articles of stone or of OTHER MINERAL SUBSTANCES. Accordingly, when it is seen that the spares imported herein are not of natural graphite, but are of artificial graphite, they will not fall under Heading 68.15, much less under sub-heading 6815.10 CTA. In such a context then, the goods will also not be hit by Chapter Note 1(a) to Chapter 84 CTA and the classification of the goods under sub-heading 8416.90 CTA as parts of furnace burner will therefore, be in Order.
5. The reliance placed by the appellants on the Tribunal’s decision in the case of Albright, Morarji and Pandit v. CC, Bombay (supra) is well founded, wherein the Tribunal held that graphite blocks considered in that case being made of artificial graphite and phenolic resin do not fit into Heading 68.01/16 as they are not articles of mineral substances since they have been made out of artificially produced substance and that therefore they would be appropriately classifiable under Heading 84.17(1) CTA. It may also be observed that when description in the tariff heading is clear when read with general Explanatory Notes to the Tariff, there is no need to resort to HSN Explanatory Notes for determining the coverage of the Tariff Heading. Further as per HSN Explanatory Notes under Heading 68.15, It has been stated that the heading covers articles of Stone or of other mineral substances not covered by earlier headings of Chapter 68 and not included elsewhere in the Nomenclature. Here, it is to be noted that the goods imported are parts of furnace burners which are specifically covered under Heading 84.16 CTA, and parts thereof are also specifically covered under sub-heading 8416.90 CTA. Moreover, it may also be pertinent to note that natural graphite is specifically covered in Chapter 25 CTA for “Mineral Products” and under specific Heading 25.04 which reads “National Graphite” So when Heading 68.15 covers only, inter alia, articles of other mineral substances then that heading will not accommodate articles not made of natural graphite. In this view of the matter, the impugned Order classifying the goods under sub-heading 6815.10 CTA is not sustainable and is set aside. The appeal is, therefore, allowed.
Equivalent 1994 (071) ELT 1047 (Tribunal)