2001(10)LCX0026

IN THE CEGAT, COURT NO. II, NEW DELHI

S/Shri V.K. Agrawal, Member (T) and Krishna Kumar, Member (J)

ALPS INDS. LTD.

Versus

COMMISSIONER OF CUSTOMS, (AIR CARGO), NEW DELHI

Final Order No. 478/2001-B, dated 5-10-2001 in Appeal No. C/210/2001-B

Cases Quoted

Collector v. Kumudum Publications (P) Ltd. — 1995(12)LCX0085 Eq 1997 (096) ELT 0226 (S.C.) — Referred.... [Para 3]

Dunlop India Ltd. v. U.O.I. — 1975(10)LCX0016 Eq 1983 (013) ELT 1566 (S.C.) — Referred........................ [Paras 2, 3]

Interarch Building Products (P) Ltd. v. Collector — 1992(12)LCX0012 Eq 1993 (065) ELT 0080 (Tribunal) — Distinguished           [Paras 2, 3, 4, 5]

DEPARTMENTAL CLARIFICATION CITED

C.B.E. & C. Circular No. 28/89-CX4, dated 26-9-1989 ....................................................... [Para 2]

Advocated By :   S/Shri N.C. Sogani, Consultant, K. Kumar, Advocate and M.S. Gupta, Consultant, for the Appellant.

Shri R.D. Negi, SDR, for the Respondent.

[Order per : V.K. Agrawal, Member (T)]. - The issue involved in this appeal, filed by M/s Alps Industries Ltd. is whether the “Aluminium Coils Alloy - width 1” (25 mm), thickness 0.15 mm before coating, 0.18 mm after coating,” imported by them, are classifiable under sub-heading 7607.19 of the first schedule to the Customs Tariff Act as claimed by them or under sub-heading 8302.41 CTA as venetian blinds confirmed by the Commissioner of Customs (Appeals), under the impugned order.

2. Shri K. Kumar, learned Advocate, alongwith Shri N.C. Sogani, learned Consultant, submitted that the Department has classified the impugned goods under sub-heading 8302.41 relying upon the decision in the case of Interarch Building Products (P) Ltd. v. Collector of Customs - 1992(12)LCX0012 Eq 1993 (065) ELT 0080 (T); that the said decision is not applicable to the facts of the present matter; that the impugned goods, imported by the Appellants, are only aluminium coils alloy in a running length of 1000 Mts for use in the manufacture of venetian blinds in their factory; that sub-heading 8302.41 of C.T.A. deals with the miscellaneous Articles of base metal and not with the base metal itself; that they have not imported articles of base metal; that the aluminium coils alloy imported by them is a raw material for manufacturing venetian blinds and hence cannot be regarded as articles of base metal at all; that the impugned goods satisfies the definition of plates, sheets, strips and foils as given in the Note (d) to Chapter 76. The learned Advocate, further, submitted that in the case of Interach Building Products, the goods on examination were found to have undergone complete process of converting the same into venetian blinds ready to be used as it is after cutting to a required length; that on the other hand, the material imported by them is in the form of raw material only and to make them articles of base metal, the goods have to undergo many processes; that coil is to be given curvature that is formed on forming and punching machines; that thereafter webbing is done on webbing stand for putting cord in the punch holes of the formed slots; top and bottom head rails are punched and cord lock, tilter lock, cradle and drum with D. Rod are fitted in Head Rail; that in bottom rail, only web cord lock and end lock are fitted and the entire venetian blind is attached to Head Rail; at the end Tilter hand is attached with tilter lock and Tressel. The learned Advocate referred to the decision in Interarch Building Products to show that the products therein were in the shape of a channel tapered at one end, having holes and fine cutting, besides being painted and contended that the goods were completely processed articles and there was no other process left to be worked on them except cutting them into required length. He also mentioned that merely because the aluminium strips in question are to be used in the manufacture of venetian blinds, these cannot be classified as venetian blinds or components for venetian blinds; that it is settled law that “end use” cannot be made the basis for deciding classification of a product under the Tariff. He relied upon the decision in Dunlop India Ltd. v. U.O.I., 1975(10)LCX0016 Eq 1983 (013) ELT 1566 (S.C.). He finally relied upon the Circular No. 28/89-CX 4, dated 26-9-1989 in which it was clarified that aluminium foils, cleared in running length in the form of strips and subsequently used for sealing the milk bottles would be classifiable under Heading 76.06 or 76.07; that the impugned goods have consistently been assessed by the Department under sub-heading 7607.19 C.T.A and in support of his contention he drew our attention to Bills of Entry at Pages 43 to 56 of the paper book.

3. Countering the arguments, Shri R.D. Negi, learned S.D.R. submitted that admittedly the impugned goods are to be used in the manufacture of venetian blinds; that in Heading 83.02 the expression used is “suitable for furniture,.......blinds,.......etc.”; that as such the heading itself refers to “use” and accordingly enduse has to be a criterion for determining the classification under this Heading; that in view of this, the ratio laid down in Dunlop India case, supra, is not applicable; that similar views were expressed by the Tribunal in Interarch Building Products case wherein it was observed that “use of an article is a necessary ingredient for classification under Tariff Heading 83.02. Reliance was also placed on the decision in Collector of Customs v. Kumudum Publications (P) Ltd., 1995(12)LCX0085 Eq 1997 (096) ELT 0226 (S.C.) wherein the Apex Court observed that “It may not also be entirely correct to say that in no case can the end use or function of the goods is relevant on the question of classification.” He also referred to the examination report recorded on the reverse side of the Bill of Entry according to which “The goods appear to be correctly classifiable under CTH 83.02 in accordance with decision of CEGAT 1992(12)LCX0012 Eq 1993 (065) ELT 0080 (T).” He also mentioned that the Aluminium Strips imported by them are colour coated and not meant for any other use. In reply, the learned Advocate submitted that the expression “suitable for” has been used in relation to Words “base metal mountings, fittings and similar articles” and the coils imported by them cannot be classified under Heading 83.02 by giving an unlimited interpretation to the said expression; that this cannot be applied to each and every thing; that ‘suitability’ is to be judged in conjunction with the things mentioned in the heading.

4. We have considered the submissions of both the sides. The description of goods given on the Bill of Entry is “Aluminium Coils Alloy JIS 518 2H19 or Equivalent width 1” (25 mm) thickness 0.15 mm. Before coating 0.18 mm after coating 626 smoky gray”. The Appellants have contended forcefully that the imported goods are raw materials for manufacturing venetian blinds and no process had been taken thereon to treat the impugned coils as venetian blinds or components of venetian blinds. We find substantial force in this submission of the Appellants. The Revenue, except relying on the decision in Interarch Building Products case, has not brought any material on record to show that the impugned goods have acquired the shape of venetian blinds and can be used as venetian blinds by the simple process of cutting to required length. As per Explanatory Notes of H.S.N., Heading 76.07 “covers the products defined in Chapter Notes 1(d), when of a thickness not exceeding 0.2 mm. The learned Advocate has relied upon Note (d) to Chapter 76, which is same as Note 1(d) to Chapter 76 in H.S.N. There is no rebuttal from the Revenue that the impugned product does not satisfy the definition as given in Note (d) to Chapter 76. As observed earlier, there is no material on record to suggest that the impugned goods have assumed the character of articles or products of other headings. Mere fact that these goods are going to be used in the manufacture of venetian blinds cannot put them under Heading 83.02 of the Tariff. As per Explanatory Notes of HSN, Heading 83.02 “covers general purpose classes of base metal accessory fittings and mountings, such as are used largely on furniture, doors, windows, coach work, etc. Goods within such general classes remain in this heading even if they are designed for particular uses (e.g., door handles or hinges for automobiles).” Further, the Explanatory Notes clarifies that “the heading does not, however, extend to goods forming an essential part of the structure of the article, such as windows frames, or switch devices for revolving chairs.” It is thus evident that Aluminium coils cannot by itself be considered as mounting, fittings and similar articles suitable for blinds. Some of the examples of articles suitable for blinds given in Explanatory Notes are hooks, fastners, stops, brackets and roller ends for shutters or blinds.

5. The Revenue has placed heavy reliance on the decision in the case of Interarch Building Products case. In the said case, the examination report of the goods clearly mentioned that Aluminium rolled products were colour coated, given shape and design for ready fitting with little effort, viz fabricated, punched pressed but in the length of 16.5 ft. Similarly the examination report mentioned that Iron & Steel section was colour coated, fabricated pressed at specific angles and was in the length of 16.5 ft. In view of such an examination report and categorical finding of the lower appellate authority that the sample of iron & steel section is not merely a channel; It is a kind of bracket with edges of the two types bent inwards and is also colour coated. The Tribunal in the said case concluded that the goods “have been given shape and design made suitable for a specific purpose;” No such findings by both the lower authorities has been given nor is there any examination report as existed in the Interarch Building Products case. Accordingly, we set aside the impugned order and allow the appeal.

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Equivalent 2001 (134) ELT 740 (Tri. - Del.)

Equivalent 2001 (047) RLT 0529