1997(05)LCX0094

IN THE CEGAT, COURT NO. II, NEW DELHI

S/Shri S.L. Peeran, Member (J) and Shiben K. Dhar, Member (T)

COLLECTOR OF CUSTOMS, BOMBAY

Versus

FUEL FURNACES MANUFACTURERS

Final Order No. 1540/97-B2, dated 23-5-1997 in Appeal No. C/724/90-B2

Advocated By : Shri K.K. Jha, SDR, for the Appellants.

Shri M.C. Contractor, Authorised Representative, for the Respondents.

[Order per : Shiben K. Dhar, Member (T)]. - The respondents manufacture Electric Resistance Furnace. They had imported 10 Nos. of Silicon Carbide Crucibles and claimed these to be parts of electric resistance furnaces. They claimed classification under CTH 8417.80. The department assessed these under 6903.90. Their claim for exemption under Notification No. 155/86 was rejected at the original level but allowed by the Collector (Appeals) on the ground that the crucibles are parts of furnaces. The Revenue are in appeal against this order.

2. It is the contention of the Revenue that the crucibles are not included in the parts of Heading 8514.90 as the foot note under Explanatory notes excludes goods which specifically include crucibles under such headings. The Revenue therefore, plead that the correct classification of these goods is under 6903.90 and by virtue thereof the impugned goods are not eligible to exemption under Notification No. 155/86.

3. We have heard both sides.

4. In the first place, we note that whereas the goods were assessed under CTH 6903.90, the appellants had claimed the classification under 8417.80. The Collector (Appeals) chose 8514.10 as correct classification, something which was not pleaded by either side and therefore, we are of the view that the Collector could not have arrived at the classification without notice to the other side. However, from what would follow, we are of the view that this is not material in arriving at the decision for what is central to the issue is whether the crucibles are parts of furnaces to be eligible to exemption. The Notification No. 155/86 exempts parts required for the purpose of initial setting up, or for the assembly or manufacture, of any article specified in Column (2) of the Table annexed, when imported into India and proved to the satisfaction of the Assistant Collector of Customs, to be so required for such setting up, assembly or manufacture. The Notification is also dependent on certain conditions. The conditions are that specified authorities are satisfied and certify in each case that the goods will be required for the purpose specified in the Notification, and the importer files the undertaking to the effect that the goods would be used for the specified purpose and an account of such goods received and consumed will be maintained, and extract of such account would be placed before the Assistant Collector. It was pleaded by the authorised representative on behalf of the respondent that these certificates were duly produced. Presenting the letter dated 19th Sept., 1987 in the Court he submits that the specified authorities have certified that silicon carbide crucibles are required for the manufacture of furnaces. The department has no doubt in regard to the certificates. Their only doubt is in regard to the classification. In this connection, the Learned DR drew our attention to the appeal memo which cites HSN Notes to rule out the classification of the goods under 8514.10 and submits that the correct classification is only 6903.90 and therefore, since the Notification No. 155/86 does not mention sub-heading 6903.90, the impugned goods would not be entitled to exemption.

4.2 The Notification No. 155/86 under Sl. No. 2 mentions both Headings 8417 and 8414. These are articles for the manufacture of which parts are required. The various sub-headings mentioned in Column (2) of the Table appended to the Notification refer to articles for which parts are required and not parts of such articles. In other words, the reference in this Table is to finished articles in the manufacture of which parts to be used and not parts themselves. We cannot misdirect our attention therefore to classification of parts in deciding the admissibility or otherwise of exemption under this Notification. What Notification requires is that such parts are allowed concession as are imported for the manufacture of such articles as are specified in the Notification. Since both Headings 8417 and 8414 are specified in the Notification and there is no challenge to classification of the final product as such by the Revenue, the classification of parts under 6903.90 is not of any relevance in arriving at the finding.

5. There is also no challenge from the Revenue about the certificates issued by the authorities specified in the Notification. Since the Notification grants exemption conditional to satisfaction of specified authorities, the certificates issued by such authorities as are notified in the Notification have to be accepted. It is contended by the Revenue in the appeal memo, under grounds of appeal, that the impugned goods are rightly classifiable under 6903.90 as indicated earlier. However, for determining eligibility to exemption under Notification No. 155/86 what is central to the issue is whether the impugned goods are parts of articles mentioned in Column (2) of the Table appended to that Notification. From the literature produced by the learned authorised representative in the Court, it is seen that crucibles are placed inside the furnace and it is forcefully contended by the authorised representative that these are parts of furnaces.

6. The learned DR while conceding that these are parts of furnace submits that these are consumables as they get worn out after some time. Merely because a part is replaced from time to time would not make it any the less a part of that article. Considering the literature placed and the certificates from the General Manager & Jt. Commissioner of Industries, DIC, Baroda certifying Silicon Carbide Crucibles are required to manufacture industrial furnaces, we have to hold that these in fact are parts of the furnaces. Once it is held that these are parts of furnaces, they would be eligible to exemption under Notification No. 155/86.

7. In the result, we uphold the impugned order and reject the Revenue appeal.

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Equivalent 1997 (95) ELT 127 (Tribunal)

Equivalent 1997 (021) RLT 0818 (CEGAT)