Tata Yodogawa Ltd. vs Commissioner of Customs, Calcutta>2002(02)LCX0094

2002(02)LCX0094

IN THE CEGAT, EASTERN BENCH, KOLKATA

Shri G.R. Sharma, Member (T) and Smt. Archana Wadhwa, Member (J)

TATA YODOGAWA LTD.

Versus

COMMISSIONER OF CUSTOMS, CALCUTTA

Order No. A/294/CAL/2002, dated 18-2-2002 in Appeal No. C/246/93-B

Cases Quoted

Tata Yodogawa Ltd. v. Commissioner 1999(01)LCX0133 Eq 2000 (116) ELT 0560 (Tribunal) Referred. [Paras 2,3]

Star Steels Ltd. v. Collector 1992(11)LCX0055 Eq 1993 (064) ELT 0143 (Tribunal) Referred.......................... [Para 5]

Advocated By : Shri V. Sridharan, Advocate, for the Appellant.

Shri A.K. Pandit, JDR, for the Respondent.

[Order per : G.R. Sharma, Member (T)]. - This appeal has come back from the Honble Supreme Court with the directions reading as under :

We have heard learned Counsel. We are of the view that the order of the Tribunal must be set aside and the matter remanded to the Tribunal to be heard afresh. We only indicate why we so order because a detailed order might prejudice the case on either side. We do not think that the Tribunal has quite correctly appreciated the import of the Notification dated 14th March, 1991 and, in any case, its finding that chill moulds are essential parts of the centrifugal casting machine is based only upon technical data and the respondents memo of appeal and it has not referred to or dealt with what has been found to the contrary by the Authorities below.

2. The facts of the case, in brief, are that M/s. Tata Yodogawa Ltd. filed a home consumption Bill of Entry for clearance of 4 numbers of chilled moulds and claimed assessment thereof under Heading 8480.49 read with Notification No. 98/90-Cus., dated 20-3-90, Customs Authorities assessed the Bill accordingly. After assessment the importers by their letter dated 6-5-92 submitted that the item in question that is chilled mould is especially designed part of centrifugal casting machine and is not interchangeable with any of the machines. Along with the letter, they enclosed the drawing and technical write-up to substantiate their statement. They claimed re-assessment of the item under Heading 8454.90 read with 8454.30 read with Notification No. 23/91. In their letter it was further stated that the practice followed by the Customs to assess the moulds for continuous casting machine was under Heading 8459.19 of Customs Tariff Act as parts of continuous casting machine. A Representative of the importer met the Assistant Collector on 21-5-92 and explained that the chilled moulds are parts of centrifugal machine. Assistant Collector observed that since moulds are to be used with centrifugal casting machine and continuous casting machines are classifiable under Customs Tariff Heading Nos. 68.15, 69.03 or 84.80 according to HSN Explanatory Notes at Page 1265 Vol. 3. Learned Assistant Collector, therefore, observed that the said goods are excluded from the purview of Heading 84.54 and that Customs Tariff Heading No. 84.80 covers moulding boxes for metal foundry; mould bases; moulding patterns; moulds for metals or metal carbides, metal for glass, moulds for mineral materials, metal moulds for rubber or plastic injection or compression type etc., the subject goods are moulds for metal foundry as declared by the importers and amplified as other than ingot moulds; that they are other than injection or compression type, moulds and therefore, the appropriate classification for the subject goods should be 8480.49. The Assistant Collector also observed that at Page 1320 the HSN Explanatory Note D which is meant for moulds metal etc. mentions that this group includes -

1. Chill-moulds (die-casts) : - These take form of a metallic casting consisting of two or .more adjustable parts which reproduce, in hollow form, the shape of the required articles.

2. Pressure-casting moulds, into which the molten metal is forced under pressure. They normally consist of two complementary metallic chill-moulds, with hollows corresponding to the shape of the required articles in their opposing forces; in some cases the halves of the mould compress the molten metal to a certain degree.

3. Moulds for sintering metal powers : - These moulds are heated. They are sometimes also used for sintering metal carbides or ceramic powders.

4. Cylindrical moulds for centrifugal moulding machines (e.g. for casting iron pipes, gun barrels) and thus, it further strength the classification of the subject goods in Heading 8480.49.

The Assistant Collector, therefore, observed that he has considered partys letter and their oral submissions made before me during the course of personal hearing but none of their submissions is convincing that the goods should be classified in Heading 8454.30. Therefore, he concluded that the assessment made under 8480.49 was in order. Being aggrieved by this order the appellants filed an appeal before the Collector (Appeals). The learned Collector (Appeals) referred to Page 1265 of HSN and again Page 1320 of the HSN and held that the goods shall be classifiable under Chapter Heading 8480.90. Learned Collector of Customs (Appeals) also held that the appellants contention that the goods can be used in the particular machinery only and should be classified as part of that machinery, is not correct because of this specific direction for classification in the HSN.

3. The appellant was not satisfied with the above order and came up in appeal before the Tribunal. The Tribunal in its Order No. A-68, dated 28-1-1999 [1999(01)LCX0133 Eq 2000 (116) ELT 0560 (Tribunal)] held that chill moulds would be entitled to the benefit of the Notification No. 23/91 irrespective of their classification under any of the rival headings under Chapter 8454 or 8480. Against this finding of the Tribunal Revenue filed an appeal before the Honble Supreme Court who have referred the matter back to the Tribunal as indicated above.

4. Shri V. Sridharan learned Counsel appearing for M/s. Tata Yodogawa Ltd. explained the process of manufacture of bi-metal steel mill rolls and sleeves on the said centrifugal casting machine. From the process of manufacture, he tried to derive that the chill mould is an essential individual component of the machine in question; that the machine has been incorporated with thrust assemblies to locate and hold these moulds and can take static as well as dynamic load of the chill mould while it is on rotation with metal during casting. He also referred to technical material placed on record. Learned Counsel also referred to Circular No. 29/88, dated 30-6-88 issued by the Central Board of Excise & Customs under which it has been clarified that Modvat credit will not be available on inputs used in the preparation of sand moulds and ceramic moulds, by considering the same as part and parcel of the machinery used for casting. By referring to this Circular the learned Counsel explains that it becomes evident that moulds are necessarily parts of machinery.

5.Learned Counsel also referred to Notification No. 23/91-Cus., dated 14-3-1991 (as amended) and submitted that the notification exempts parts of the machine irrespective of their classification stating that there was no doubt that chill moulds are parts of centrifugal casting machine. Therefore, the benefit under Notfn. No. 23/91-Cus., dated 14-3-1991 (as amended) should not be denied to them whether the moulds are classified u/h 8454.30 or u/h 8480.49. Learned Counsel also referred to the decision of the Tribunal in the case of Star Steels Ltd. v. C.C. reported in 1993 (064) ELT 143 stating that Notification No. 112/87 which was similarly worded which exempts goods from auxiliary duty of customs and the Tribunal granted exemption to copper moulds irrespective of their classification u/h 98.06 of C.T.A., 1975.

6. Shri A.K. Pandit, learned DR submits that moulds are not parts of casting machines. He submits that machine in question was imported earlier and the moulds are subsequently imported from a different country. Therefore, this factor shows that the moulds are not part and parcel of the machine and the same are giving shape to the castings and can be imported in thousands. He submitted that Notification No. 23/91-Cus., dated 14-3-91 (as amended) under Serial No. 35 specifically mentions the ingot moulds only and since the goods in dispute are not ingot moulds the benefit cannot be extended to them. In so far as classification of the goods is concerned, he reiterated the findings of the Authorities below.

7. We have heard the rival submissions. We note that two issues were raised before the Authorities below as well as before us. The first issue was as to what was the classification of the goods described as chill moulds and the second issue was whether they were entitled to the benefit of Notification No. 23/91-Cus. dated 14-3-91.

8. We note that whereas the Authorities below have discussed at great length the question of classification of the goods but they have not dealt with the admissibility of the Notification No. 23/91-Cus., dated 14-3-1991 (as amended) to the imported goods.

9. In so far as the classification of chill moulds is concerned we note that chill moulds are specifically mentioned on Page 1320 under Heading D of Chapter Heading 84.80 of the HSN. We also note that under Chapter Heading 84.54 on Page 1265 it has been stated that the moulds to be used with the machines of group Chapter Heading 84.54 fall usually in Headings 68.15, 69.03 or 84.80. On perusal of the submissions made before us we find that according to HSN Explanatory Notes under Chapter Heading 84.54 moulds do not qualify for classification under that chapter. Thus classification of the goods under Chapter Heading 84.54 is out of question in view of the fact that HSN Explanatory Notes are very clear on this issue. Therefore, looking to the fact that the importer in the first instance had claimed classification of his goods under Chapter Heading 8480.49 and having regard to the fact that chill moulds are specifically mentioned under Chapter Heading 84.80. Coupled with the fact that moulds are excluded classification under Chapter Heading 84.54; we agree with the findings of the learned Collector (Appeals) that the goods merit classification under Chapter Heading 8480.49.

10. We note that second issue regarding admissibility of concessional rate of duty under Notification No. 23/91 was also raised by the importer before the Lower Authorities. We have perused the orders both of the Assistant Collector as also that of the Collector (Appeals). We find that there is a mention of Notification No. 23/91 being claimed by the importer, however, there is no discussion. Since this issue was specifically raised before both the Lower Authorities and since it was not discussed and decided by them we consider it a fit case for remand. The matter is, therefore, remanded to the Commissioner (Appeals) concerned to examine the issue of availability of concessional rate of duty under Notification No. 23/91-Cus., dated 14-3-1991 (as amended) as claimed by the importer and pass appropriate orders in accordance with law after providing the appellants an opportunity of being heard in question.

11. The appeal is, therefore, allowed by way of remand.

Equivalent 2002 (142) ELT 0651 (Tri. - Kolkata)