Bharat Electronics Ltd. vs Collector Of Customs, Bombay>1998(06)LCX0139

1998(06)LCX0139

IN THE CEGAT, COURT NO. IV, NEW DELHI

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

BHARAT ELECTRONICS LTD.

Versus

COLLECTOR OF CUSTOMS, BOMBAY

Order Nos. 425-428/98-D, dated 5-6-1998 in Appeal Nos. C/1774-1777/94-D

Cases Quoted

Oil and Natural Gas Commission v. Collector — 1991(10)LCX0001 Eq 1992 (061) ELT 0003 (S.C.) — Referred [Para 3]

Collector v. Fibre Foils Pvt. Ltd. — 1996(02)LCX0110 Eq 1996 (083) ELT 0463 (Tribunal) — Referred [Para 4]

Collector v. Metro Wood Engg. Works — 1989(02)LCX0063 Eq 1989 (043) ELT 0660 (Tribunal) — Referred [Para 4]

Collector v. Lotus Inks — 1996(09)LCX0068 Eq 1996 (087) ELT 0580 (S.C.) — Referred [Para 4]

Advocated By : Shri K. Kumar, Advocate, for the Appellant.

Shri R.S. Sangia, JDR, for the Respondent.

[Order per : Lajja Ram, Member (T)]. - M/s. Bharat Electronics Ltd. (BEL) had imported consignments of Lead Glass Tubings. On import, the Lead Glass Tubings were classified under sub-heading No. 7011.90 of the Customs Tariff and sub-heading No. 7008.90 of the Central Excise Tariff. Under confirmation orders all dated 25-5-1993 the goods imported were classified under sub-heading No. 7002.39 of the Customs Tariff and under sub-heading No. 7001.90 of the Central Excise Tariff. Under his common Order-in-Appeal, dated 31-1-1994, the Collector of Customs (Appeals), Bombay disposed of the four appeals filed by M/s. BEL and confirmed all the four orders all dated 25-5-1993 passed by the Asstt. Collector of Customs.

2. The Committee on Disputes constituted under the Cabinet Secretariat in pursuance of the Supreme Court’s decision in the case of ONGC reported in 1991(10)LCX0001 Eq 1992 (061) ELT 0003 (S.C.), had allowed M/s. BEL to pursue the appeals in the Tribunal, under minutes of the Meeting held on 6-9-1994 circulated under No. COD/15/1994, dated 9-9-1994.

3. All the four appeals were posted for hearing on 10-3-1998 when Shri K. Kumar, Advocate appeared for BEL. Shri R.S. Sangia, JDR represented the respondent/Revenue.

4. Shri K. Kumar, Advocate submitted that the imported Lead Glass Tubings were for the manufacture of Television (TV) Picture Tubes. The Tubings were especially made for the above purposes and had Lead content of more than 28%. The goods imported were not ordinary glass tubings. They were in running length and out of one tubing of 1420 mm. length, 12 tubes were to be made. He submitted that the picture tube was completed only after the fitting of the gun on the glass neck made out of the imported lead glass tubings. It was his submission that sub-heading No. 7011.90 in the Customs Tariff and sub-heading No. 7008.20 in the Central Excise Tariff were specific while the sub-heading No. 7002.39 of the Customs Tariff and sub-heading No. 7001.90 in the Central Excise Tariff were general. It was his submission that the specific heading was to be preferred to a general Heading. He referred to the Tribunal’s decision in the case of (1) Collector of Central Excise, Bangalore v. Fibre Foils Pvt. Ltd. - 1996(02)LCX0110 Eq 1996 (083) ELT 0463 (Tribunal) and (2) Collector of Central Excise v. Metro Wood Engg. Works - 1989(02)LCX0063 Eq 1989 (043) ELT 0660 (Tribunal). He also submitted that when two views were possible then the one in favour of the assessee should guide the classification. He relied upon the Supreme Court’s decision in the case of Collector of Customs, Madras v. Lotus Inks - 1996(09)LCX0068 Eq 1996 (087) ELT 0580 (S.C.).

5. In reply, Shri R.S. Sangia, JDR submitted that the goods imported were Lead Glass Tubings in running length. They were required to be cut and then on separate machines, glass necks were to be manufactured. These glass necks were used for sealing the funnels to make the glass bulb for T.V. picture tubes. In the form imported they were not a part of glass envelopes, glass bulbs or the picture tubes. They were tubings in running length and as all types of glass tubings irrespective of their composition were classifiable under Heading No. 70.02 of the Customs Tariff and Heading No. 70.01 of the Central Excise Tariff, they have been correctly classified in the confirmation orders passed by the Asstt. Collector of Customs whose orders had been confirmed by the Collector of Customs (Appeals), Bombay.

6. We have carefully considered the matter. The BEL had imported Lead Glass Tubings with length 1420 mm. and diameter of 29 mm. per piece. Out of a single piece of tubing with 1420 mm. length, 12 tubes were to be made. These tubes were further processed and fabricated to make glass necks. Such glass necks were then used to seal the funnels which in turn were sealed with panel to form a glass bulb for picture tubes. In the Technical Write-up at page 61 of the paper book, the functioning of the tubings had been explained as under :-

“Technical write-up for 20’’ & 14’’ neck tubing - For making 20’’ & 14’’ glass bulbs for picture tube, panels and funnels are made separately and thereafter funnels are sealed with necks of specific quality and dimension, which in turn is sealed with panel to form a complete glass bulb. These necks are being imported in the form of neck tubing having 30% PBO which is fabricated to necks of specific design at our end in our neck fabrication machine. Apart from the strict dimensional tolerance, the most important feature of these necks tubing is the expansion and the X-ray absorption co-efficient of the glass of which, former property, i.e. expansion must match our 9008 TV Glass to have perfect sealing so that at the line of introduction of electron gun, there must not be any mis-match, crack etc. which will result in complete rejection of the picture tube.”

7. It is seen that the Lead Glass Tubings were fabricated to manufacture glass necks of specific design by the appellants on their neck fabrication machine. The lead glass tubings were imported in running length of 1420 mm. They were in the nature of a raw material for manufacturing glass necks for the glass bulbs of T.V. picture tubes. The appellants had admitted that out of one tubing of 1420 mm. length, 12 tubes were to be made which were fabricated into glass necks by a separate and distinct process. The tubing as such was a raw material and could not be used in the bulbs as such. It was to be converted into glass necks and such glass necks were used for sealing the funnels. On the funnel sealed with the neck tube, the electron gun was to be mounted by sealing after the bulb was evacuated. Such funnels were further sealed with the panel on which the picture is projected, to form a glass bulb in the T.V. Picture tube.

8. The appellants have sought classification of the goods imported under sub-heading No. 7011.90 for the Customs Tariff purposes and under sub-heading No. 7008.20 under the Central Excise Tariff. Heading No. 70.11 of the Customs Tariff covered glass envelopes (including bulbs and tubes), open and glass parts thereof, without fittings, for electric lamps, cathode-ray tubes or the like. This Heading according to the Explanatory Notes to the Harmonised Commodity Description and Coding System (HSN) covers tubes with narrowed ends, clearly intended for electric lamps, tubes lined with a fluorescent substance such as zinc silicate, cadmium borate, calcium tungstate. It has been specifically made clear in the HSN Explanatory Notes that this Heading does not include glass tubes merely cut to length. The Lead glass tubing imported were in a running length. They were required to be cut to make 12 tubes from each piece of tubing measuring 1420 mm. in length. The individual tubes so cut were subjected to the process of fabrication to produce glass necks of specific design on the neck fabrication machine in the factory of the appellants. At the point of import and assessments, such lead glass tubings could not be considered as clearly intended for electric lamps. The goods were required to be assessed to customs duty in the form they were so presented for assessment.

9. The Revenue had classified the goods under sub-heading Nos. 7002.39 of the Customs Tariff and sub-heading No. 7001.90 of the Central Excise Tariff. Under Heading No. 70.02 of the Customs Tariff all type of glass tubes un-worked were covered. The glass tubes un-worked could be of fused quartz and other fused silica. Glass tubes could also be of other glass having a linear co-efficient of expansion not exceeding 5 x 10^-6per kelvin within a temperature range of 0OC to 300OC. Even if the glass tubes were not covered by the above description they remained under Heading No. 70.02. It has been explained in the HSN Explanatory Notes that un-worked signify as obtained direct from the drawing process or merely cut into lengths, the end of which may have been simply smoothed. According to the HSN Explanatory Notes Chapter 70 of the Customs Tariff covered glass in all forms other than those especially excluded or those covered specifically elsewhere. The “glass” has been explained as a fused homogeneous mixture in varying proportions of an alkali silicate of sodium or potassium with one or more silicates of calcium and lead and accessorily of barium aluminium, megnesium, etc. There are many varieties of glass according to their composition. It is thus clear that the chemical composition of the glass tubings will not exclude them from the purview of this Heading. Under Heading No. 70.02 among others glass rods and tubings of various diameters, which are generally obtained by drawing combined with blowing in the case of tubing are covered. Such tubings may be used for many purposes, for chemical or industrial apparatus; in the textile industry; for further manufacture into thermometers, ampoules, electric or electronic bulbs or valves; or ornaments. It could not be said that this Heading covers only those glass tubes which were meant for the manufacture of general purpose glass items. The argument that the imported glass tubes were required for T.V. Picture tubes and for that purpose had to conform to the given specifications, will have no bearing on the classification under this Heading as the goods are otherwise covered by the Tariff description. Only those tubings which were made into finished articles or parts of finished articles recognised as such were excluded from the coverage under Heading No. 70.02. We do not consider that the imported lead glass tubings were in the nature of finished articles or parts of the finished articles recognisable as such. We, therefore, consider that the goods had been correctly classified by the Collector of Customs (Appeals), Bombay.

10. Similar considerations will apply for classification under the Central Excise Tariff.

11. There is no ambiguity or overlapping in and in between the Heading No. 70.02 and Heading No. 70.11 of the Customs Tariff. Heading No. 70.02 covers goods in the nature of raw materials or which are usable for further manufacture into other products. Heading No. 70.11 of the Customs Tariff covers goods which are in the nature of intermediate products and which had assumed definite shape for specific use. The coverage under Heading No. 70.11 as explained in the HSN Explanatory Notes is as under :-

(A) “All open glass envelopes (including bulbs and tubes) of any shape or size, without fittings, for the manufacture of electric lamps, valves and tubes, whether these are for illuminating or other purposes (incandescent or vapour discharge lamps, X-ray tubes, radio valves, cathode-ray tubes, rectifier valves or other electronic tubes or valves, infra-red lamps, etc.). Most of these envelopes are mass-produced by automatic machines; they may be frosted, coloured, opal, metallised, coated with fluorescent material, etc.

Glass parts of envelopes (such as faceplates or cones of cathode-ray tubes for television receivers, spotlight bulb reflectors) remain in this heading.

(B) Tubes with narrowed ends clearly intended for electric lamps, or bent into shape for advertising signs.

By means of a series of operations (including, insertion of filaments of electrodes, exhaustion of the envelope, introduction of one or more rare gases, of mercury, etc., fitting of caps or connectors), these envelopes are made into electric lamps, cathode-ray tubes or the like of Chapter 85.

All the above-mentioned articles may be of ordinary glass, crystal glass or fused quartz.

The heading does not include :

(a) Glass tubes merely cut to length, whether or not the ends have been fire polished or otherwise smoothed, or tubes which have had fluorescent materials (e.g. sodium uranate) added to the glass in the mass (Heading No. 70.02).

(b) Glass bulbs, tubes and envelopes, closed or with fittings, and finished bulbs, tubes and valves (see Headings 85.39, 85.40, 90.22, etc.)."

12. As the coverage under Heading No. 70.11 is different from the coverage under Heading No. 70.02 and as the goods in the form presented for assessments were clearly classifiable under sub-heading No. 7002.39 of the Customs Tariff and sub-heading No. 7001.90 of the Central Excise Tariff, we do not find any infirmity in the views taken by the lower authorities. The case law referred by the ld. Advocate had no relevance to the facts of the present case.

13. Taking all the relevant facts and circumstances into account, we do not find any merit in all these four appeals and all the four appeals are rejected. Ordered accordingly.

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Equivalent 1998 (102) ELT 717 (Tribunal)