Hindustan National Glass & Indus. Ltd. vs A.C.C., New Delhi>1997(12)LCX0021

1997(12)LCX0021

IN THE CEGAT, COURT NO. II, NEW DELHI

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

HINDUSTAN NATIONAL GLASS & INDUS. LTD.

Versus

A.C.C., NEW DELHI

Final Order No. C/3013/97-B2, dated 23-12-1997 in Appeal No. C/477/93-B2

CASE CITED

Photophone Industries (I) Ltd. v. Collector — 1997 (019) RLT 0412 (Tribunal) — Distinguished [Para 14]

Advocated By : Shri R.P. Singh, Advocate, for the Appellant.

Shri A.K. Agarwal, SDR, for the Respondent.

[Order per : Lajja Ram, Member (T)]. - This is an appeal filed by M/s. Hindustan National Glass and Industries Ltd. (hereinafter referred to as `HNG’) being aggrieved with the order-in-appeal dated 10-2-1993 passed by the Collector of Customs (Appeals), New Delhi.

2. The matter relates to the eligibility of the Shear Blades (narrow) for glass bottle machinery imported by HNG, to the benefit of exemption Notification No. 59/87-Cus., dated 1-3-1987 (as amended).

3. The matter was heard on 3-11-1997, when Shri R.P. Singh, Advocate applied HNG. Shri A.K. Agarwal, SDR represented the respondent/Revenue.

4. Shri R.P. Singh, Advocate stated that the shear blades classifiable under sub-heading No. 8208.90 of the Customs Tariff were designed for the glass bottle machinery which was classifiable under sub-heading No. 8475.20 of the Customs Tariff. He submitted that the exemption from payment of additional duty of customs as provided to the glass bottle machinery under Notification No. 59/87-Cus. should be available to the shear blades also as they were parts of such glass bottle machinery. He referred to the rate of customs duty as prescribed under Column (4) against sub-heading No. 8208.90. He also mentioned that the parts of the machines which were covered under sub-heading No. 8475.20 were classifiable under sub-heading No. 8475.90 and the relevant exemption Notification No. 172/89-Cus., dated 29-5-1989. He pleaded that the shear blades imported by HNG were eligible for exemption from the payment of additional duty of customs.

5. In reply Shri A.K. Agarwal, SDR referred to the exemption Notification No. 59/87-Cus., dated 1-3-1987 and submitted that the exemption under that notification was available only to the goods falling under Chapters 84 and 85 of the Customs Tariff and that admittedly the goods imported-shear blades - were classifiable under Chapter 82 of the Customs Tariff. As knives and cutting blades were specifically described under Heading No. 82.08 they were not classifiable under sub-heading No. 8475.90 even if it was assumed that they were parts of the glass bottle machinery. They were designed to be used with glass bottles machinery and in this connection he referred to the Bill of Entry wherein the goods had been shown classified under sub-heading No. 8208.90 of the Customs Tariff. He pleaded for rejection of the appeal.

6. We have carefully considered the matter. The appellants HNG had imported shear blades (narrow) for glass bottle machinery which they classified under sub-heading No. 8208.90 of the Customs Tariff. HNG had claimed that the goods imported were eligible for the exemption from payment of additional duty of Customs under Notification No. 59/87-Cus., dated 1-3-1987 (as amended). The assessment was, however, made without extending the benefit of Notification No. 59/87-Cus. and subsequently an appealable order was passed by the Assistant Collector of Customs, New Delhi who held that the items imported were specifically coverd under sub-heading No. 8208.90.

7. Shear blades are used for cutting the molten glass in the glass forming machine with a view to make the specific piece of molten glass available to the forming section for moulding/producing the desired glass articles. In the process of manufacture of glass articles the molten glass, called metal, passes through the throat to the refining section to free it from the bubbles. The molten glass flowing from the melting pots, tanks etc. in a continuous stream is required to be cut in required molten mass (glass gobs) at a pre-determined speed for producing the different type of glass products. The molten glass so continuously flowing from the melting pots, tanks etc. to the feeder for the forming sections is cut by the shear mechanism so that the required dropping of the glass gobs is continuously available.

8. The knives and the cutting blades for machines or for mechanical appliances were classifiable under Heading No. 82.08 of the Customs Tariff. The “duty” for the purposes of the Act, under Section 2(15) of the said Customs Act 1962 meant a duty of Customs leviable under that Act. Under Section 2 of the Customs Tariff Act, 1975 (Tariff Act) the rates at which duties of customs are leviable under the Customs Act are as specified in the Customs Tariff. It is known as the basic duty of customs. Under Section 3 of the Tariff Act it has been provided that in addition to the duty leviable in terms of Section 2 of the said Tariff Act, additional duty equal to the excise duty for the time being leviable on a like article if produced or manufacutred in India will also be leviable on the articles imported into India. It is referred to as the additional duty of customs. The rate of basic duty for the purposes of the Act as applicable to the goods classifiable under Heading No. 82.08 of the Customs Tariff was “the rate applicable to the machine or mechanical appliances with which the knife or the cutting blade was designed to be used”. The goods imported were described in the Bill of Entry dated 13-10-1992 as shear blades (narrow) for glass bottle machinery, classifiable under sub-heading No. 8208.90 of the Customs Tariff. The glass bottle machinery also referred to by the appellants as glass forming machine was classifiable under sub-heading No. 8475.20 which covered machines for manufacturing or hot working glass or glassware.

9. The appellants had claimed the benefit of Notification No. 59/87-Cus. for the purposes of exemption from the payment of additional duty of customs leviable under Section 3 of the Tariff Act. Under Notification No. 59/87-Cus., the goods falling under sub-heading No. 8475.20 of the Tariff as per Sr. No. 47 of the Table annexed to that notification, among various other goods, were exempted from the whole of the additional duty of customs leviable thereon under Section 3 of the Tariff Act. The exemption from the additional duty of customs leviable on the goods imported under Section 3 of the Tariff Act is different from the exemption from the basic duty of customs leviable on the goods imported under Section 2 of the Tariff Act. The exemption under Notification No. 59/87-Cus. was to the goods falling under sub-heading No. 8475.20. Sub-heading No. 8475.20 covered the glass forming machine but not the shear blades which were separately classifiable under sub-heading No. 8208.90. The rate of the basic duty of customs for the goods classifiable under sub-heading No. 8208.90 was the rate applicable to the machine or mechanical appliance with which the knife or the cutting blade was designed to be used. This rate applicable had reference only to the basic duty of customs and not to the additional duty of customs which is separately leviable under Section 3 of the Tariff Act. The exemption from the additional duty of customs in favour of the glass forming machinery did not mean the exemption from the additioal duty of customs in favour of the shear blades, even when for the purposes of the basic duty of customs, the shear blades attracted the same rate as applicable to the glass forming machinery.

10. The shear blades are separately and specifically classifiable under sub-heading No. 8208.90. They were separately imported and so classified under sub-heading No. 8208.90 by the appellants in the Bill of Entry. As they were specifically included in Heading No. 82.08 of the Tariff they had to be classified therein even if they could be taken as part of the machine classifiable under Heading No. 84.75. Under Notification No. 172/89-Cus., dated 29-5-1989 (as amended) the goods falling under sub-heading No. 8475.90 were specified against Sr. No. 46 of the Table annexed to that notification for the purposes of the concessional rate of basic duty of customs. As shear blades were not covered under sub-heading No. 8475.90, this Notification No. 175/89-Cus. was not applicable to them.

11. Notification No. 4/91-Cus., dated 16-1-1991 also exempted a portion of the basic duty of customs leviable on the knives and cutting blades for machines or for mechanical appliances falling under Heading No. 82.08, that is “the duty of customs leviable thereon which is specified in the said First Schedule”. It did not provide for exemption with regard to the additional duty of customs. In the tariff against sub-heading No. 8208.90 while for basic duty of customs, there is no reference to any notification issued under sub-section (1) of Section 25 of the Act there is such a reference in Notification No. 4/91-Cus., dated 16-1-1991. Except this difference both the Tariff and the exemption notification provided for the basic duty of customs at par with the basic duty leviable on the machine for which the said knives and cutting blades were meant.

12. It is not disputed that the shear blades imported were classifiable under sub-heading No. 8208.90. As they had been specifically described in the Tariff they had to be classified in such specific Tariff entry even when it is claimed that such shear blades were glass bottle machinery spare parts. As regards Notification No. 4/91-Cus. as we have already discussed in Para 11 above that notification in addition to the rate of basic duty provided in the Tariff also makes a reference to any applicable exemption notification. Both the Tariff rate and the Notification No. 4/91 only refer to the basic duty of customs and not to the additional duty of customs.

13. The assessment had been made on the second check basis under Section 17 of the Customs Act, 1962 and, therefore, it could not be considered that prior to the examination of the goods the assessment be deemed to be completed.

14. In the case of Photophone Industries (I) Ltd. v. Collector of Customs, Bombay [1997 (019) RLT 0412 (Tribunal)] the matter related to the applicability of exemption notification with regard to the machine for which the disc type cutting tools were designed to be used. The facts of the case before us are entirely different.

15. Taking all the relevant facts and considerations into account we do not find any merit in this appeal and the same is rejected. The miscellaneous application is also disposed of in the above terms. Ordered accordingly.

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Equivalent 1998 (103) ELT 82 (Tribunal)