Modi Gbc Ltd. vs Collector of Central Excise, New Delhi>1997(11)LCX0067

1997(11)LCX0067

IN THE CEGAT, COURT NO. II, NEW DELHI

S/Shri Lajja Ram, Member (T) and S.S. Kang, Member (J)

MODI GBC LTD.

Versus

COLLECTOR OF C. EX., NEW DELHI

Final Order No. C/2205/97-B2, dated 4-11-1997 in Appeal No. C/1941/92-B2

Advocated By : Shri A.R. Madhav Rao, Advocate, for the Appellant.

Shri S.N. Ojha, JDR, for the Respondents.

[Order per : S.S. Kang, Member (J)]. - The appellants filed this appeal against the order-in-appeal dated 22-7-1992 passed by the Collector of Customs & Central Excise (Appeals), New Delhi.

2. The appellants imported a consignment of component for laminating machines vide B/E dated 24-2-1991 and sought classification under Tariff Heading 84.40 read with Notification No. 155/86-Cus., dated 1-3-1986 as amended on the ground that the components are for the manufacture of laminating machines which are covered under the Tariff Heading 84.40. Adjudicating authority held that laminating machine is classifiable under Heading 8479.89 of Customs Tariff Act and further held that laminating machine has an individual function and the principal purpose is to laminate and not to manufacture book covers as claimed by the appellants. In respect of rubber rollers, the adjudicating authority held that these are to be classified under Chapter 40 of the Customs Tariff Act.

3. Ld. Counsel appearing on behalf of the appellants submits that laminating machine is primarily used in the binding industry to make covers, diaries etc. and also paper back book binding. He relied upon HSN Notes in this respect and argues that as per HSN, Chapter Heading 84.40 includes machines for manufacture of book covers. These usually include feeders to bring in the necessary sheets of paper, cardboard, book cloth etc.

4. In the alternative he submits that laminating machine falls under Heading 84.43 of the Customs Tariff Act. He submits that Heading 84.43 covers printing machinery, machines for uses ancilliary to printing. He relied upon the HSN and submits that the type of machines which are for uses ancilliary to printing have been enumerated and include stock pile elevators, automatic feeders, sheet delivery mechanisms, folders, etc. etc. He further submitted that even if the machine falls under Heading 84.79 of the Tariff as held by the Revenue, the benefit of Notification No. 59/87 read with Notification No. 155/86 should be extended to the appellants. He submits that even assuming that the laminating machine falls under Tariff Heading 8479.89 as classified by the Revenue those machinery falling under this heading used for production of a commodity is eligible for concession under Notification No. 59/87-Cus., dated 1-3-1987. He submits that laminating machine manufactured by the appellants can be considered as a machine used for production of commodity.

5. In respect of classification of rubber rollers, he submits that Revenue has classified these rollers under Chapter 40 of the Customs Tariff Act. He submits that in fact these are not simple rubber rollers. These are silicon rubber rollers. He submits that rollers consist of a metallic base over which the silicon rubber has been coated. In addition there is a heater coil wound uniformly from one end to another on the metallic core of the roller. When electricity is passed, the heater coils get heated thus heating the silicon rubber coated on the roller. With this heating the laminating film is melted and lamination is effected. He therefore, submits at these rollers have to be classified as parts of the laminating machines under Heading 8417.70 of the Tariff. He therefore, prays that the appeal may be allowed.

6. Shri S.N. Ojha, JDR appearing on behalf of the respondent submits that laminating machine imported by the appellants is not covered under Tariff Heading 84.40 or 84.48. He submits that Heading 84.40 includes book binding, machinery, including book-sewing machines and Heading 84.43 relates to printing machinery, machines for uses ancillary to printing - Offset printing machinery. He submits that laminating machine does not perform any function in respect of book binding or printing. He therefore, submits that these are rightly classified under Heading 84.79 which deals with machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter and parts of laminating machine were classified under sub-heading 8479.90 of the Tariff as “parts”. He further submits that this laminating machine is not used for production of commodity. It simply laminates charts, posters etc. and hence they are not entitled for the benefit of Notification No. 59/87-Cus., dated 1-3-1987 and its parts are not entitled for the benefit of Notification No. 155/86-Cus., dated 1-3-1986. In respect of rollers, he submits that these are parts of rubbers and in their invoice, they are described as rubber parts and hence these were rightly classified under Chapter 40 of the Tariff. He therefore, prays that the appeal may be dismissed.

7. Heard both sides. In this case, the Revenue has classified the laminating machine under Tariff Heading 8479.89 of the Tariff and the parts of the machine under 8479.90 and held that this machine is not used for production of commodity. The appellants’ contention is that the laminating machine is classified under Heading 84.40 of the Tariff. Heading 84.40 of the Tariff provides as under :

“84.40 Book-binding machinery, including book-sewing machines.”

In the alternative, the appellants pleaded that laminating machine is classified under Heading 84.43. Heading 84.43 is reproduced below :

“84.43 Printing machinery; machines for uses ancilliary to printing. - Offset printing machinery.”

Heading 84.40 of the Tariff deals with book binding machinery and 84.43 of the Tariff printing machinery.

8. The catalogue produced by the appellants describes the function of the machine as under :

“Not just documents, but charts, posters, blueprints, book jackets, even biological specimens can now be laminated, with GBC’s advanced laminators. To make them look good, to make them last.

Colours stand out, and never fade, small details suddenly become crystal clear.

Blueprints, architectural drawings and other heavy duty material becomes resistant to wear and (in fact, even torn sheets can now be laminated back into one piece).

Documents, specimens and other various material gets a fresh lease of life. Just wipe away dust, spills or accidental stains, to make sheets look as good as new."

From the above functions of the machine, we find that it does not perform any function in respect of book binding or printing machinery hence a laminating machine is not classifiable under Headings 84.40 and 84.43 of the Tariff.

9. The Revenue has classified this machine under Heading 84.79. Heading 84.79 is reproduced below :

“84.79 Machines and mechanical appliances having individual functions, not specified or included elsewhere in this Chapter.”

10. In view of the above discussion, we find that laminating machine is not covered under Heading 84.40 which relates to book binding and Heading 84.43 printing machinery. Hence it is rightly classified under Heading 84.79 and its parts under Heading 8479.90 as held by the Revenue.

11. In respect of the benefit of Notification No. 59/87-Cus., dated 1-3-1987, we find that at Serial No. 50 of the notification which provides “Goods falling under sub-heading Nos. 8479.20, 8479.30, 8479.40; sub-heading No. 8479.81 excluding wire coil winders; and machinery used for the production of a commodity.” The machinery used for production of a commodity is entitled for the benefit of this notification. As per the catalogue produced by the appellants as reproduced above, the laminating machine only laminates the documents and is not producing any commodity, therefore, the laminating machine is not entitled for the benefit of this notification as held by the Revenue.

12. In respect of the classification of rubber roller, the Revenue has classified this roller under Chapter 40 of the Tariff. Chapter 40 of the Tariff deals with rubber and articles thereof. From the catalogue produced by the appellants, we find that the rubber roller is not a simple rubber roller. This roller consists of a metallic base over which the silicon rubber has been coated. In addition, there is a heater coil wound uniformly from one end to another on the metallic core of the roller. When electricity is passed, the heater coils get heated thus heating the silicon rubber coated on the roller. With this heating the laminating film is melted and lamination is effected. It consists of the metal core, heater coils wound over it and the silicon rubber. In this roller, there is a re-roller assembly, therefore, this roller is not a simple roller of rubber which is classified under Chapter 40 which deals rubber and articles thereof. This roller is specifically made for the lamination machine and appropriate provision is made in the ends of the roller so that the roller straightaway fits into the machine.

13. After giving careful consideration to this aspect, we find that this roller is classifiable only as parts of the machine under Tariff Heading 9479.90 of the Tariff. The impugned order is modified to this extent only otherwise we uphold the impugned order and the appeal is disposed of as indicated above.

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Equivalent 1998 (99) ELT 161 (Tribunal)

Equivalent 1998 (025) RLT 0787