1996(08)LCX0047

IN THE CEGAT, EASTERN BENCH, CALCUTTA

Shri P.C. Jain, Member (T) and Ms. Jyoti Balasundaram, Member (J)

ESSKAY MACHINERY PVT. LTD.

Versus

COLLECTOR OF CUSTOMS, CALCUTTA

Order No. A-569/CAL/1996, dated 8-8-1996 in Appeal No. C-755/94B

CASE CITED

Collector v. Woodcraft — 1995(03)LCX0070 Eq 1995 (077) ELT 0023 (SC)                                                             [Para 3.1]

Advocated By : Shri P.R. Biswas, Consultant, for the Appellant.

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

[Order per : P.C. Jain, Member (T)]. - Short controversy in this Appeal is whether the Steel Tubes of special quality withstanding very high temperature to be used into a machinery part described as “recuperator” will fall under Tariff Heading 8419.90 as part of machines falling under Tariff Heading 8419.50, as contended by the Appellants herein or under Tariff Heading 7304.49, as assessed by the lower authorities.

 

2.1 Learned Consultant Shri P.R. Biswas for the Appellants urges that Section Note 1 to Section 15 specifies certain items in various clauses thereof viz. (a) to (p), which are excluded from the scope of Section XVI of the Customs Act, 1962 under which Chapter 84 falls. His submission is that the goods under consideration viz. Steel Tubes of about three metres in length do not fall under any of those sub-clauses viz. (a) to (p) of Note 1. Ipso facto, therefore, he submits, the Appellants would be covered under Tariff Headings 8419.50 and 8419.90. To bring home his points, he has elaborated that the tubes imported by the Appellants are of a very special type withstanding very high degree of temperature. These are not ordinary tubes of ordinary value. He points that tube of just three metres in length costs about Rs. 4,700/- approximately. He also draws our attention to the technical data in Annexure “B” and Annexure “C” to the Appeal Memo. Annexure “B”, of Part-C thereof refers to the following seamless tubes and welded tubes giving certain specifications therein to be used in the said recuperators. The specifications therein to be used in Part-C of Annexure “B” of the Seamless Tubes and Welded Tubes, on which the learned Consultant relies upon, are given below :

 

Seamless tubes - Grade Din : 1.4749 (27% Cr) 44.5 mm OD x 2.6 mm thick x 3100 mm.

 

Welded tubes Grade - 430 TI (17%) Gr. 44.5 mm OD x 2.55 mm thick x 3100 mm.

 

2.2 Drawing attention to Annexure “C” dealing with technical parameters of the recuperator, he points out that the recuperator is designed to handle flue gas of 950oC and 532oC. He, therefore, submits that the Steel Tubes meant for the said recuperators will have to handle that high degree of temperature. These, by no means can be called ordinary steel tubes which are required to be classified under Chapter 73. These Steel Tubes are, therefore, made of such special quality of steel that it cannot be denied that these are parts of heat exchanger and, therefore, the correct Tariff Heading for their classification would be 8419.90 for machines falling under 8419.50. He submits that Explanatory Notes to Tariff Heading 84.19/20 has no application because it speaks of Metal Tubes as not identifiable parts whereas his contention is that the Tubes imported by the Appellants are identifiable parts of heat exchanger or recuperators.

 

2.3 He has also submitted that the length of the Tubes imported by the Appellants has to be strictly in accordance with the specifications given in Annexure “D” to the Appeal Memo. There is no scope for any tolerance or deviation from the specification given in it. Annexure “D”, therefore, he submits makes the goods identifiable parts of heat exchanger.

 

3.1 Opposing the aforesaid contentions of the learned Consultant, Shri K.K. Biswas, learned SDR for the Respondents submits that no special shape or design has been given to these tubes. What is claimed is that the Steel Tubes are of steel of special quality withstanding very high temperature and that the Steel Tubes are made of very exact specification as given in Annexure “D” to the Appeal. But he submits that the fact remains that they are Steel Tubes. He submits that the Customs Tariff is strictly designed and fully aligned in so far as Chapter 84 is concerned. Therefore, Explanatory Notes to HSN have a very high persuasive value, as held by the Hon’ble Supreme Court in the case of Collector of Central Excise, Shillong v. Woodcraft reported in 1995(03)LCX0070 Eq 1995 (077) ELT 0023 (S.C.). The relevant observations of the Supreme Court are as follows :-

 

“......Since the Central Excise Tariff Act, 1985 is enacted on the basis and pattern of the HSN, the same expression used in the Act must, as far as practicable, be construed to have the meaning which is expressly given to in the HSN when there is no indication in the Indian Tariff of different intention....” [Para-18]

 

3.2 Learned SDR also submits that in the Explanatory Notes to Tariff Heading 84.19/20 relates to all machinery and parts thereof. The said Explanatory Notes, reliance on which has been placed by him, is reproduced below :

 

“ Subject to the general provisions regarding the classification of parts (see the General Explanatory Note to Section XVI), the heading covers parts of the above. Such parts include certain elements of distillation apparatus or rectifying columns, such as retorts, bubble caps and rings, plates and certain tube elements, revolving plates and drums, etc., for roasters or dryers.

 

Metal tubes and pipes which have been bent or curved but not otherwise worked, presented unassembled are not identifiable as parts of goods or this heading and are therefore to be classified in Section XV."

 [Emphasis by learned SDR]

 

In particular, he submits that this Heading viz. 84.19/20 relates to parts of all machinery and not relating to last machinery i.e. [liquefying air]

 

3.3He, therefore, submits that the goods being of very special quality steel even though manufactured to the exact specifications regarding the size of the tubes, nevertheless would be outside the Tariff Heading 84.19/20. The assessment, therefore, has been rightly made by the lower authorities and the Appeal deserves to be dismissed.

 

4. We have carefully considered the pleas advanced from both sides. We are inclined to agree with the submissions of the learned SDR in view of the alignment of the Customs Tariff with the HSN and the ruling handed down by the Apex Court in the case of Woodcraft mentioned supra. Explanatory Notes being of very high persuasive value, we are to accept the Explanatory Notes relied upon by the learned SDR. Merely because the goods are made of definite specifications and of special quality steel withstanding very high degree of temperature, it does not take away the goods from the general category of pipes and tubes of steel falling under Tariff Heading 7304.49. If we look at this Tariff Heading, it does not mention that Tubes of steel of any special quality would not be covered by Tariff Heading 7304.49, apart from Explanatory Notes relied upon by the learned SDR. There is not an iota of doubt that the goods would be covered under the said Tariff Heading 7304.49. Consequently, we do not find any substance in the Appeal. Hence we reject the same.

Equivalent 1996 (88) ELT 779 (Tribunal)

Equivalent 1996 (016) RLT 0751 (CEGAT-EB)