Ideal Sheet Metal Stampings & Pressings Pvt.Ltd. vs Commissioner of Customs, Ahmedabad>2001(07)LCX0040

2001(07)LCX0040

IN THE CEGAT, WEST ZONAL BENCH, MUMBAI

S/Shri Gowri Shankar, Member (T) and G.N. Srinivasan, Member (J)

IDEAL SHEET METAL STAMPINGS & PRESSINGS PVT. LTD.

Versus

C.C., AHMEDABAD

Order Nos. 1750-51/2001-WZB/C-I, dated 13-7-2001 in Appeal No. C/603/2001-Bom.

Advocated By : S/Shri J.C. Patel and S.N. Kantawala, Advocates, for the Appellant.

Shri B.B. Sarkar, JDR, for the Respondent.

[Order per : Gowri Shankar, Member (T)]. - The appeal is taken up for disposal with consent of both sides after waiving deposit.

2. The question for consideration in this appeal is the classification of “regrind polycarbonate” imported by the appellant. In its earlier order relating to identical goods imported by the same appellant (appeal C/1023/00), the Tribunal had held that the regrind polycarbonate would be correctly classified under Heading 3907.40 of the Customs Tariff, and accordingly, Heading 390740 00 of the Import Policy. It had noted that, by application of the provisions of Note 7 to the Chapter Heading 3915 which is for waste, parings and scrap of plastics would not apply to such waste, parings and scrap of a single thermoplastic material transformed into primary forms, further noting that this provision was based upon the Explanatory Notes to the Harmonised System of the World Customs Organisation. Since the goods in question were made entirely of polycarbonate which is a single thermoplastic material and were in one of the primary form specified in the Chapter, they would not be classified under Heading 39.15 and would therefore, be classified as polycarbonate under Heading 39.07.

3. In the proceedings following the issue of the show cause notice proposing to treat the goods as scrap, the importer had cited this order to the Commissioner. The Commissioner has found that the Tribunal’s decision is not applicable to the facts before him. The reason that he advances for this conclusion is that the provisions of Note 3 to Chapter 39 of the Tariff were not cited in the notice issued to the importer in regard to the earlier consignment and therefore, were not considered by the Tribunal. He finds this note to be “basis for the classification of the goods under CTH 39.01 to 39.11”.

4. We will now proceed to examine this contention Note 3 to Chapter 39 reads as follows :

“Heading Nos. 39.01 to 39.11 apply only to goods of a kind produced by chemical synthesis, falling in the following categories :

(a) Liquid synthetic polyolefins of which less than 60% by volume distils at 300°C, after conversion to 1,013 millibars when a reduced pressure distillation method is used (Heading Nos. 39.01 and 39.02);

(b) Resins not highly polymerised, of the coumarone-indene type (Heading No. 39.11);

(d) Silicones (Heading No. 39.10);

(e) Resols (Heading No. 39.09) and other prepolymers.”

5. It is not possible for us to conclude from the contents of this note that scrap of a single thermoplastic material transformed into a primary form recognised in the Chapter would not be classifiable under any of the headings from 01 to 11 of Chapter 39. This Note clearly is intended to provide guidelines for classification, in the first 11 headings of the Chapter of goods based on their origin or level of polymerisation. Thus, resins not highly polymerised, of the coumarone-indene type will be classifiable under Heading 39.11 and silicones under 39.10. Application of the principles contained in this note to waste, parings or scrap of a single thermoplastic material in a primary form will not have the effect of excluding such goods from classification under any of these eleven headings. It is worth emphasising that this note deals with classification of goods, not on the basis of their physical form, or intended use, as would be the case with waste, parings or scrap, but on the methods by which they have come into existence, and their degree of polymerisation. The scope of Note 3 is made clear from Page 593 of the Explanatory Notes to explain that how in sub-chapter I relating to primary forms, the products of Headings 39.01 to 39.11 are obtained by chemical synthesis and those of Headings 39.12 and 39.13 are either natural polymers or are obtained therefrom by chemical treatment. Heading 39.14 covers ion-exchangers based on polymers of Headings 39.01 to 39.13.

6. There is nothing in the Chapter or the Tariff (or, indeed, in the Explanatory Notes to suggest that this note comes in the way of the application of Note 7 to the Chapter to such goods of a single thermoplastic material satisfy the requirement contained in this note; if, for any reason, they are not classifiable under Heading 15, and, because they are of a kind produced by chemical synthesis, are prima facie classifiable under any of the first eleven headings, their specific classification in one out of these eleven headings will be governed by this note. To put it simply, Note 3 lays down principles governing classification based on the nature and extent of the chemical processes which the primary material in question has undergone. Note 7 provides that goods which would otherwise be classifiable under waste, parings or scrap would not be so classifiable if they are made out of a single thermoplastic material or one of the primary forms recognised in the note. (We have explained, in our earlier order the probable reasons for such an exception). There is thus no conflict between the provisions of Note 3 and Note 7 to the Chapter. Neither one of them overrides the other. The provisions of any one of them cannot be invoked to exclude the operation of the other. On the contrary, if the Commissioner’s views are to be accepted, it would result in Note 7 being rendered meaningless - waste parings and scrap at all. The goods were, therefore, correctly classifiable under Heading 3907.40 of the Tariff and 390740 00 of the Policy.

7. It is also difficult for us not to accept the contention of the Counsel for the appellant that the Commissioner has indulged in an exercise to avoid following the ratio of our earlier order. The situation of facts in both cases is identical as is the issue, classification of regrind polycarbonate. The fact that the first show cause notice did not cite the provisions of Note 3 to the Chapter does not give the Commissioner the liberty not to apply the Tribunal’s earlier order on the pretext that it is distinguishable. If the Commissioner were of the view that the Tribunal’s order was incorrect, the correct and proper course for him to adopt was to proceed to have that order set aside in accordance with law.

8. The appeal is allowed and the impugned order set aside.

Equivalent 2001 (133) ELT 0807 (Tri. - Mumbai)