1998(10)LCX0116
IN THE CEGAT, EASTERN BENCH, CALCUTTA
Shri P.C. Jain, Member (T) and Smt. Archana Wadhwa, Member (J)
I.C.I. INDIA LTD.
Versus
COLLECTOR OF CUSTOMS, CALCUTTA
Order Nos. S-538 & A-896/98-Cal., dated 29-10-1998 in Appeal Nos. SP (SB) 2337/93 & C/(SB) 1503/93
Cases Quoted
Collector v. Western India Plywood (P) Ltd. — 1991(10)LCX0056 Eq 1992 (057) ELT A139 (S.C.) — Referred [Para 6]
Associated Millers Pvt. Ltd. v. Collector — 1990(07)LCX0089 Eq 1990 (050) ELT 0633 (Tribunal) — Referred [Para 11]
Sri Ponkumar Magnesite Mines v. Collector — 1994(01)LCX0065 Eq 1994 (074) ELT 0388 (Tribunal) — Referred [Para 11]
Advocated By : Shri Samir Chakraborty, Advocate, for the Appellant.
Shri S.N. Ghosh, JDR, for the Respondent.
[Order per : P.C. Jain, Member (T)]. - Issue involved in this appeal is classification of a product described in the invoice as “Sandvik Cold Hard Rolled Stainless Steel Conveyor Bands Ends Prepared for Riveted Joint, size 600 mm wide and 0.8 mm thick, Grade 1200 SA Water bed Quantity, circumferential Length 14.935 metres”.
2. Appellants herein claimed the assessment of the aforesaid goods as parts of Band Caster machine under Heading 8479.90. It was accepted. Duty was paid on the goods and thereafter these were cleared on payment.
3. A show cause notice dated 4-12-1989 was issued alleging that according to technical write up submitted by the appellants, the imported goods were meant for conveying rubber chemicals from one end to the other. Such goods are primarily classifiable under sub-heading 7312.90 or under 7314.11 (if endless). As per Note 1(g) to Section XVI the goods are not classifiable under Chapter 84 being parts of general use. It was also alleged that according to Note 1(ij) to Section XVI endless belts of metal wire or strip falling under Section XV are also not classifiable under Heading 8479.90.
4. On adjudication, the Assistant Collector classified the goods under sub-heading 7314.11 holding the goods as stainless steel conveyor bands with ends prepared for riveted joints thereby assuming the character of endless steel belts. He invoked the provision of Section Note 1(ij) of Section XVI of the first Schedule to C.T.A., 1975 to eliminate classification of the goods under Chapter 84.
5. Appellants did not succeed in appeal before the Collector (Appeals). Hence this appeal before the Tribunal.
6. Ld. Advocate Dr. Samir Chkravorti has reiterated the pleas taken by the appellants before the lower authorities. He has emphasised that S. S. bands are parts of band-caster machines in rubber chemical plant of the appellants at Rishra. It is of a special quality steel which is anti-oxidant and can withstand high temperature. These strips are cut to specific shape and size to fit on the said machine with the ends rounded and drilled so as to have rivetted joints with each other as to make a perfect endless belt for conveying the molten liquid and help the liquid in solidifying without deforming the product or getting itself deformed. Classification initially made by the authorities under Heading 8479.90 was correct. He relies on a report from Supreme Court published in C.A. No. 4791/90 [1991(010)LCX0056 Eq 1992 (057) ELT A139 (S.C.)] in the case of C.C. Cochin v. Western India Plywood (P) Ltd. where CEGAT’s Order No. 168/1990-B2, dated 14-3-1990 has been upheld. CEGAT held the S.S. Sheets classifiable as parts of Hydraulic Press under Heading 84.59(2) rather than as S.S. Sheets under Heading 73.15(2).
7. Rebutting the classification made by the lower authorities under Tariff Heading 73.14, he draws our attention to the following Explanatory Notes in H.S.N. pertaining to Tariff Heading 73.14 at page 1024.
(A) Cloth (including endless Bands), Grill Netting and Fencing
“The products of this group are, in the main, produced by interlacing, interweaving, netting, etc., iron or steel wire by hand or machine. The methods of manufacture broadly resemble those used in the textile industry (for simple warp and weft fabrics, knitted or crocheted fabrics, etc.).
The group includes wire grill in which the wires are welded at the points of contact or bound at those points by means of an additional wire, whether or not the wires are also interlaced.
The term “wire” means hot or cold-formed products of any cross-sectional shape, of which no cross-sectional dimension exceeds 16mm, such as rolled wire, wire rod and flat strip cut from sheet (see Note 2 to this Chapter).
The material of the heading may be used for many purposes e.g., for the washing, drying or filtering of many materials; to make fencing, food protecting covers and insect screening, safety guards for machinery, conveyor belting, shelving, mattresses, upholstery, sieves and riddles, etc.; and for reinforcing concrete, etc.
The material may be in rolls, in endless bands (e.g., for belting) or in sheets, whether or not cut to shape; it may be of two or more ply."
He submits that the goods do not fit in with the description `cloth’. Each band is a strip of 800 m.m. width. There is no interlacing, interweaving, netting etc. resembling broadly in methods of manufacture of these products. By no stretch of imagination, can these be classified under Heading 73.14.
8. He further submits that Revenue’s reliance on Note 1(ij) of Section XVI excluding “endless belts of wire or strip of Section XV” from Section XVI is of no help to the Revenue. Revenue has first to show that the goods fall under Section XV. There is no heading of the said description in Section XV except Tariff Heading 73.14 which as stated above does not cover the goods under consideration. There being no other relevant heading of endless belt, Note 1(ij) of Section XVI is not applicable to the goods.
9. Opposing the contentions ld. JDR, Shri S.N. Ghosh submits that Section Note 1(ij) of XVI clearly excludes “endless belts of metal wire or strip (X Section XV)” from the scope of Section XVI under which Chapter 84 falls. This note while excluding the “endless belt of metal wire or strip” from the scope of Section XVI also, by clear implication, rules that endless belts whether of wire or strip fall under Section XV. In view of this specific Note 1(0ij) of Section XVI, the goods, though specifically meant for band caster machine, are admittedly endless belt of strip, as clear from the technical write-up. Hence classification from Section XVI under which Chapter 84 falls, for the goods is ruled out. Most appropriate heading for the product would be 73.14.
10. He further submits that Explanatory Note under Heading 73.14 relied upon by the ld. Advocate is of no assistance to the appellants. The Explanatory Notes do not refer to `endless belt of strip’ and they merely appear to refer to “endless belt of wires”. But Section Note 1(0ij) of Section XVI, being of a statutory character, specifically excludes “endless belt of strip” from Section XVI. A strip is a flat rolled product which has been defined in the C.E.T.A. in Note 1(00k) of Ch. 72; the goods in question fully satisfy the said definition. The goods are clearly endless belt of strip.
11. He also submits that according to compendium of classification of opinions under C.C.C.N., the goods had fallen under tariff heading 73.40 under C.C.C.N. (B.T.N.) which corresponds to T.H. 73.26 (C.T.A. 1975 aligned to HSN). This tariff heading pertains to “all other articles of iron or steel”. He submits that classification is a question of law and can be raised at any stage as held by the Tribunal in 1990 (050) ELT 633 and 1994 (074) ELT 388.
12. We have carefully considered the pleas advanced from both sides. In order to appreciate the respective contentions, we reproduce below the relevant tariff-headings/sub-headings and Section Notes.
“Section XV (Base Metals & Articles of Base Metals)
Notes :
1. This Section does not cover :
(f) Articles of Section XVI (machinery, mechanical appliances and electrical goods)
“Chapter 72 (Iron & Steel)
Notes : 1. In this chapter and, in the case of Notes (d), (e) and (f) throughout the Nomenclature, the following expressions have the meanings hereby assigned to them :
1(k) Flat-rolled products
Rolled products of solid rectangular (other than square) cross-section, which do not conform to the definition at (ij) above in the form of :
- coils of successively superimposed layers, or
- straight length, which if of a thickness less than 4.75 mm are of a width which exceeds 150 mm and measures at least twice the thickness.
“Chapter 73 (Articles of Iron or Steel)
73.14 Cloth (including endless bands), grill, netting and fencing, of iron or steel wire; expanded metal of iron or steel
- Woven products;
7314.11 - of stainless steel
......................."
“Section XVI
Notes :
1. This Section does not cover :
(ij) Endless belts of metal wire or strip (Section XV)
2. Throughout the Nomenclature, the expression “parts of general use” means :
(a) Goods described in Headings Nos. 73.20, 73.25, 73.29, 73.31 and 73.32 and similar goods of other base metals;
(b) Springs and leaves for springs, of base metal, other than clock and watch springs (Heading No. 91.11);
Tariff Heading :
84.79 Machines & mechanical appliances having individual functions, not specified or included elsewhere in this Chapter 8479.90 Parts.
13. From the technical write-up, detailed specifications of the goods, it is apparent that the imported goods are required for Band Caster Machine. They form the endless belt over the rollers of that machine for conveying the hot molten (liquid) chemicals and helping the chemicals in solidifying with the help of cold water spray from beneath. Specifications of the goods and the stainless steel are such that the bands, despite a high temperature gradient from 200 Degree Celsius to room temperature during the period of rotation, the bands do not warp and corrode ensuring long life of the bands. It can be said, without any two opinions on this aspect, that the imported goods are solely and principally required for Band Caster Machine. In any case Revenue has not pointed out the alternative use of the S.S. bands. Goods, therefore, satisfy the terms of Clause (b) of Note 2 of Section XVI of C.T.A. 1975. Therefore, read with Section Note 1(f) of Section XV, there would have been no difficulty in classi-fying the goods under sub-heading 8479.90 as contended by the appellants.
14. But we observe that Section Note 2 is inter alia, “subject to note 1" of Section XVI. Clause (ij) of note 1 categorically rules that ”endless belts of metal wire or strip (Section XV)" are not covered by Section XVI under which Chapter 84 falls. By virtue of note 1(ij) of Section XVI, classification of the goods from Chapter 84 is ruled out. Ld. JDR Shri S.N. Ghosh is right in his submission that Note 1(ij) of Section XVI not only excludes the classification of goods under consideration from Section XVI but also, fixes the classification of the said goods under Section XV (under which Chapter 73 falls). It is also to be noted that exclusion of “endless belts of metal wire or strip” is irrespective of the quality and specifications of the constituent metal.
15. Ld. Advocate, Dr. Chakravorti for the appellants has argued that Tariff Heading 7314.11, as contended by the Revenue applies to “cloth” of iron or steel wire which is a woven product as a textile fabric is woven. This position becomes clear from a plain reading of the Heading 73.14. It becomes crystal clear from the HSN Explanatory Notes referred to above. At the first blush, there appears to be substantial force in the plea of the ld. Advocate. But then, on a close reading of the said Heading 73.14, as already set out above, we are of the view that the above submission is not correct. We observe that “endless bands” have been specifically included within the description “cloth” in the said heading. It is a well settled proposition that the word “including” expands the meaning of the word preceding it to the extent of the inclusion specifically made which in its normal sense namely the expression following the word `including’ would not have been included within the expression preceding the word “including”. In the present instance “endless bands” of the type of stainless strips would not have been included in the expression “cloth” which is generally a woven product (in the nature of interlocking/interlacing of horizontal and vertical yarn). Specific inclusion of endless bands of stainless steel, even though not woven, will get specifically included by the terms of Heading/sub-heading 7314.11.
16. If such a view as above is not adopted, it would be difficult to reconcile the expressions “or strip (Section XV)” occurring in Note 1(ij) of Section XVI.
17. Ld. Advocate’s reliance on the HSN Explanatory Notes do not advance appellants case. These Notes state that products of this group are “in the main” produced by interlacing etc. Use of the expression “in the main” indicates that the Explanatory Notes are not speaking exhaustively. Products covered “mainly” and not exhaustively by the said heading have been set out in the HSN Explanatory Notes. For this reason, `strips’ are not set out in those notes. Explanatory Notes do not have a statutory character. But Section Notes, Chapter Notes are part of the Statute, C.T.A., 1975.
18. We are, therefore, of the considered view that the goods in question have been rightly classified by the lower authorities under tariff sub-heading 7314.11.
19. Further reliance placed by the ld. Advocate on a Supreme Court report dismissing Revenue’s appeal in respect of `stainless steel sheets’ for hydraulic press is of no help to the appellants since Note 1(ij) of Section XVI, as in this case, was not in the way of the assessee therein.
20. No other plea has been pressed before us.
21. In view of the foregoing discussion, we reject the appeal.
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Equivalent 1999 (105) ELT 402 (Tribunal)