1998(08)LCX0049

IN THE CEGAT, COURT NO. II, NEW DELHI

S/Shri P.C. Jain, Member (T) and S.S. Kang, Member (J)

JINDAL ALUMINIUM LTD.

Versus

COLLECTOR OF CUSTOMS, BOMBAY

Final Order No. 639/98-B2, dated 11-8-1998 in Appeal No. C/1041/91-B2

Advocated By : Shri T. Vishwanathan, Advocate, for the Appellant.

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

[Order per : P.C. Jain, Member (T)]. - Question involved in this appeal is the classification of the goods described in the bill of entry as also in the invoice of the supplier as “Alloy steel bars of Grade Thyrotherm 2344 EFS in forged, annealed and premachined condition”. This is the description given in all the three invoices, though all of different diameter involved in the present case. Along with the invoices, the appellants have produced some record i.e., test reports of the product indicating the composition of the imported goods. In the two said test reports, the goods had been described as bars annealed, peeled. In the one test report, these have been described as in forged, annealed and premachined condition.

2. Lower authorities have classified the aforesaid product under tariff sub-heading 7228.40, description of which reads as “other bars and rods, not further worked than forged”. Tariff heading 7228.60 under which the appellants claim the classification reads as “other bars and rods”.

3. Hence this appeal before the Tribunal. Ld. Advocate Shri T. Vishwanathan, for the appellants submits that tariff sub-heading 7228.40 will cover only those bars and rods which are not further worked. He states that this sub-heading cover only those bars which are only forged. From the two test reports accompanying the invoices, he pointed out that these bars are not merely forged but they are also peeled.

3.1. Drawing attention to the Explanatory Notes under Chapter 72 and under Heading 72.28 he submits that the Explanatory Notes under Headings 7228.14 and 7228.60 apply mutatis mutandis to the products under this Heading. Therefore, drawing attention to the Explanatory Notes to 7228.14 under Section (C) pertaining to subsequent manufacturing and finishing, he points out the following Explanatory notes :

“The finished products may be subjected to further finishing treatments or converted into other articles by a series of operations such as :

(1) Mechanical working, i.e. turning, milling, grinding, perforation or punching, folding, sizing, peeling etc.; however it should be noted that rough turning merely to eliminate the oxidation scale and crust and rough trimming are not regarded as finishing operations leading to a change in classification.

(2) Surface treatments or other operations, including cladding, to improve the properties or appearance of the metal, protect it against rusting and corrosion, etc. Except as otherwise provided in the text of certain headings, such treatments do not affect the heading in which the goods are classified. They include :

(a) Annealing, tempering, case-hardening, nitriding and similar heat treatments to improve the properties of the metal.

(b) Descaling, pickling, scraping and other processes to remove the oxide scale and crust formed during the heating of the metal.

(c) Rough coating intended solely to protect products from rust or other oxidation, to prevent slipping during transport and to facilitate handling e.g., paints containing an active anti-rust pigment (red lead, zinc powder, zinc oxide, zinc chromate, iron oxide, iron minium, jewellers’ rouge), and non-pigmented coatings with a basis of oil, grease, wax, paraffin wax, graphite, tar or bitumen.

(d) Surface finishing treatment, including :

(i) Polishing and burnishing or similar treatment;"

In para 1 of that Section (C), he points out that peeling is a process of machining, working of which will make a change in the classification whereas annealing is a process of eliminating the oxidation scale and crust and rough trimming which does not bring about any change in the classification of the goods. Since two of the test reports indicate that the goods are peeled, therefore, he submits that working other than forged has also been taken on the bars and rods. Consequently he prays that the sub-heading 7228.60 will be appropriate rather than tariff Heading 7228.40.

4. Opposing the aforesaid contention, ld. JDR Shri Sangia submits that invoice given by the supplier describe the goods as forged, annealed and premachined condition. There is no reference to peeled or peeling of the bars. He submits that invoice is the most appropriate document to rely upon for the purpose of description of the goods. The two test reports relied upon by the Advocate, submits that ld. JDR, are the internal documents of the manufacturer/supplier, describing the goods as they liked to the laboratory. The purpose of describing the products in the test memo so to say, while sending the goods to a laboratory for the purpose of determining the composition of the product would not be as accurate as in the invoice. The same description was given in the bill of entry which is legally binding on the importers, the appellant herein. Its description is the same as in the invoice. He has further pointed out that as admitted by the ld. Advocate that this question of fact that the bars imported were peeled as referred to in the accompanying test reports were not brought to the notice of the lower authorities and it is for this reason that the lower authorities had no occasion to comment upon the aspect whether the goods were peeled and whether that would change the classification. Ld. JDR submits that this plea of fact that on the basis of the test report, though accompanying the invoice, cannot be taken at this stage because the lower authority have no occasion to examine this plea. He further submits that annealing is a process which is only a surface treatment, as per Explanatory Notes produced by the appellants, this does not change the classification of the goods. In that view of the facts, he submits that classification adopted by the Revenue i.e. 7228.40 is the correct sub-heading.

5. We have carefully considered the pleas advanced by both the sides. We are inclined to agree with the submissions of the ld. JDR, Shri Sangia that description given in the invoice and the bill of entry are more reliable then the description given in the two test reports. We also agree with the ld. JDR that this plea was not taken before the lower authorities. This being plea of fact cannot be taken at this stage. Consequently we hold that the products imported are only forged product and they are not worked other than forged. Hence classification adopted by the lower authority under sub-heading No. 7228.40 is correct. Consequently the appeal is dismissed.

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Equivalent 1998 (104) ELT 531 (Tribunal)