1997(05)LCX0178

IN THE CEGAT, COURT NO. II, NEW DELHI

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

J. K. SYNTHETICS LTD.

Versus

COLLECTOR OF CUSTOMS, CALCUTTA

Final Order No. C/1054/97-B2, dated 27-5-1997 in Appeal No. C/196/91-B2

Cases Quoted

West Bengal State Electricity Board v. Collector — 1987(06)LCX0003 Eq 1989 (042) ELT 0264 (Tribunal) — Referred [Para 2]

Collector v. J. K. Synthetics Ltd. — 1993(06)LCX0068 Eq 1993 (068) ELT 0827 (Tribunal) — Referred             [Paras 3, 5]

Advocated By : S/Shri Ashok Sagar & Amit Bansal, Advocates, for the Appellants.

Shri K. K. Jha, SDR, for the Respondents.

[Order per : S.L. Peeran, Member (J)]. - This appeal arises from the Order dated 22-10-1990 passed by the Collector (Appeals), Calcutta.

2. By this order, the Collector has held that the demand for payment of Rs. 1,33,069/- in respect of imported item “Grinding Steel Balls” should have been assessed to duty under Heading 7326.11 under the Customs Tariff instead of original assessment under Heading 9806.00 read with 8474.20 adopted by the lower authorities is required to be confirmed. Before the Collector (Appeals), the appellants had submitted that the Steel Balls imported by them were very much integral part of the grinding mill of Cement Plant in view of the fact that the grinding mill cannot function effectively without these balls. They had further pointed out that in the Import and Export Policy Book, `Part’ means an element of a sub-assembly or assembly not normally useful by itself; it would be a component, spare or accessory depending upon the nature of its use/requirement. It was also argued that the grinding steel balls are not normally useful by themselves and being specific and essential integral parts of grinding mill, they contribute to the effectiveness of the grinding mill of the cement plant, hence they should be considered as parts for machinery falling under Customs Tariff Heading 84.74 and thus would be covered under Heading 98.06 for assessment. The learned Collector while rejecting their plea held that in terms of Note 6 to Chapter 84, polished steel balls are classifiable under Heading 84.82 of the Customs Tariff subject to the satisfaction of the dimensional specifications stipulated in Note 6 to Chapter 84 of the Customs Tariff Act, while other steel ball are to be classified in Heading No. 73.26. He has held that there is no serious doubt about the use of steel balls for grinding mill of the cement plant. He has held that these steel balls had been imported separately and that there is not evidence to the fact that the grinding balls imported by them have fulfilled the dimensional specifications mentioned in Note 6 to Chapter 84, as these balls are, non-calibrated steel balls, and they are rightly classifiable under Heading 73.26 which is in terms of Harmonised Commodity Description and Coding System (Volume 3, page 1038). In this regard, he has also relied on the judgment of the Tribunal rendered in the case of West Bengal State Electricity Board v. Collector of Customs as reported in 1989 (042) ELT 264.

3. Arguing for the appellants, the learned Advocate, Shri Ashok Sagar submitted that the item in issue is identifiable part of grinding mill of cement plant and it has no other use. Therefore, it has to be considered as parts for machinery falling under Customs Tariff Heading 84.74. He pointed out to the description of the item in the Bill of Entry as “Grinding balls with Cr content of approx. 1% and with hardness of 600-750 Brinell (size 5mm) (Parts for Raw Grinding Balls Mill) (Made of Iron & Steel other than Stainless Steel)”. He also pointed out to technical literature in support of his claim that they are parts of machinery falling under Heading 84.74, in view of the item being a part falling under Chapter 84, they are to be classified under Chapter 98.

He submits that Note 6 to Chapter 84 has been erroneously relied in view of the fact that the said notes relates to Heading 84.74, which deals with ball or roller bearing. It is his submission that the item being parts and not balls for balls bearing or roller bearing. Therefore, Note 6 of Chapter 84 cannot be applied to the facts of the present case. He also submitted that the citations relied by the Collector is wholly erroneous and misplaced as the same does not apply to the facts of the present case. He submits that in their own case, the Tribunal has considered the item as part of cement plant in respect of earlier Tariff as reported in 1993 (068) ELT 827.

4. The learned DR submitted that the Tariff had been amended with effect from 1-3-1986 and therefore, the earlier judgment rendered in their own case pertaining to the item in question does not apply in view of the fact that the Tariff Heading 7326.11 under which the present item has been classified covers “Grinding balls and similar articles of mills”. He submits that the Tariff Heading is having a clear description for covering `grinding balls’; therefore, there is no question of classifying the item as part for machinery falling under Tariff Heading 84.74. It is his submission that note 2(a) of Section XVI does not cover the facts of the present case for classifying “parts” which are specifically designed to form as integral part of grinding mill in case, if those parts are specifically specified elsewhere. It is his submission that the item having specifically specified under Chapter heading 7326.11 of the Customs Tariff, the demand for short levy, in this case has been rightly confirmed by the Collector (Appeals).

5. We have carefully considered the submissions made by both the sides and have perused the records. In the present case the question of the classification of impugned goods had been determined Customs Tariff Act, 1975 as in the appellants’ own case i.e. Collector of Customs v. J.K. Synthetics Ltd. as reported in 1993(06)LCX0068 Eq 1993 (068) ELT 0827 (Tribunal). The case had been examined in the light of the earlier Tariff Act wherein the Revenues’ claim for classification under Heading 73.33/40 as `other articles of iron or steel’; (2) Of stainless steel was rejected and in the light of Collectors’ order, the Tribunal by applying Note 2(b) of Section XVI held that the item to be an integral part of the ball mill of a cement plant and upheld the classification adopted by the Collector (Appeals) under Heading 84.56 with the description :

“Machinery for sorting, screening, separating, washing, crushing, grinding or mixing earth, stones, ores or other mineral substances, in solid (including powder and paste) form; machinery for agglomerating, moulding or shaping solid mineral fuels, ceramic paste, unhardened cements, plastering materials or other mineral products in powder and paste form; machines for forming foundry moulds of sand.”

6. The present import pertains to the new Tariff introduced after 1-3-1986 and which has been aligned with Harmonised Commodity Description and Coding System. Note 6 of Chapter 84 reads as follows :-

“Heading No. 84.82, inter alia, to polished steel balls, the maximum and minimum diameters of which do not differ from the nominal diameter by more than 1% or by more than 0.05 mm, whichever is less. (Other steel balls are to be classified in Heading No. 73.26).”

7. Heading 84.82 deals with “Balls or roller bearings”. The plea taken by the appellants for classification under this heading has been rightly rejected by the Collector (Appeals) by applying the above noted Note 6 of Chapter 84, in view of the item not having satisfied the criterion laid down therein. The appellants are seeking classification under sub-heading 84.74.90, which has the same description as of Heading 84.56 of the old Tariff, which has been already extracted above. The simple question is as to whether the earlier classification under Customs Tariff Act, 1975 can be adopted for the present Tariff as well. It is noticed that the earlier Tariff had a general description of “other articles of iron or steel” under Heading 73.33/40, while in the present Tariff, the description is specific under heading 7326.11 reading “grinding balls and similar articles for mills”. In terms of Rule 3 of Rules of Interpretation where goods are prima facie classifiable under two or more headings the classification shall be effected in terms of its sub-rules (a) to (c). The rule 3(a) states that the heading which provides most specific description shall be preferred to headings providing a more general description. It further states that however, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. Rule 3(b) states that mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable. From a reading of these rules, it is clear that the heading which provides the most specific description is required to be preferred to headings providing for a more general description. Therefore, it follows that heading 7326.11 with description `grinding balls and similar articles for mills’ is a specific entry introduced in the new Tariff which will have a precedence over the description earlier adopted in its absence. In their earlier case, Note 2(b) of Section XVI had been adopted to classify these items along with description of the main machinery in view of the fact that they were forming integral part of the main machine. In the present Tariff, parts have been specifically included in Chapter 8474.90. However, those parts which are specifically mentioned elsewhere with a clear and specific description are required to be classified under that heading. As stated earlier as grinding balls have a specific sub-heading under Chapter heading 7326.11 of the new Tariff and therefore, the revised classification adopted by the lower authorities in the present case is required to be confirmed. The learned Collector has rightly relied on the Harmonised Commodity Description and Coding System under heading 73.26 which has sub-heading 7326.11 with the same description “grinding balls and similar articles for mills” at page 1038. Under this heading the HSN states :

“This heading covers all iron or steel articles obtained by forging or punching, by cutting or stamping or by other processes such as folding, assembling, welding, turning, milling or perforating other than articles included in the preceding headings of this Chapter or covered by Note 1 to Section XVI or included in Chapter 82 or 83 or more specifically covered elsewhere in the Nomenclature.”

8. In view of the specific description of grinding balls for mills having been mentioned in sub-heading 7326.11 of the new Tariff, there is no merit in this appeal, hence we reject the same by confirming the impugned order.

_______

Equivalent 1998 (99) ELT 278 (Tribunal)

Equivalent 1997 (021) RLT 0011 (CEGAT)