2004(06)LCX0205

IN THE CESTAT, WEST ZONAL BENCH, MUMBAI

Ms. Jyoti Balasundaram, Member (J) and Shri Moheb Ali M., Member (T)

COMMISSIONER OF CUSTOMS, MUMBAI

Versus

H.C.L. LTD.

Order No. A/1100/2004-WZB/C-I, dated 15-6-2004 in Appeal No. C/982/97-Bom.

CASES CITED

Collector v. Hydranautics Membrane (India) Ltd. — 1994(01)LCX0073 Eq 1994 (071) ELT 0711 (Tribunal)  — Referred [Paras 3, 5]

Director of Telegraphic Microwave Project v. Collector — 1983(05)LCX0027 Eq 1983 (013) ELT 1048 (Tribunal)  — Relied on       [Paras 5, 6, 7]

REPRESENTED BY :        Shri K.K. Srivastava, JDR, for the Appellant.

Shri R. Parthasarthy, Consultant, for the Respondent.

[Order per : Moheb Ali M., Member (T)]. - M/s. HCL, the respondents in this appeal by the Revenue imported a consignment of flexwell wave guide  E 130 TD PDR 120 and claimed classification under Heading 8548.90 with the benefit of Notification No. 36/96-Cus. meant for microwave passive components. The imported goods are copper tubings with protective covering of plastic. The goods are in running length, the longest being 200 mts. These goods, after cutting them into required sizes, are installed between the transmeters and the antenna to carry the electro magnetic waves. The lower original authority classified the goods under Chapter Heading 83.07 and denied the benefit of Notification No. 36/96 which exempts Microwave Passive Components from customs duty. Chapter Heading 83.07 at the relevant time reads as follows :- 83.07 flexible tubings and base metal with or without fittings :-

2. The lower authority referred to HSN explanatory note which says that this heading covers corrugated flexible tubing and tubings covered with plastic, to hold that the goods under import are classifiable under Chapter Heading 8307.90 of Customs Tariff Act.

3. In appeal, the Commissioner (A) reversed this decision and held that the goods are correctly classifiable under 85.29 and also held that the goods are eligible for the benefit of Notification No. 36/96-Cus., dt. 23-7-96. The Commissioner (A) held this view mainly for the following reasons :

(i)         The Department of Tele-communications in their letter dated 23-4-96 stated that wave guide is a microwave passive component.

(ii)       In this case of Director of Telegraphic Microwave Project v. CC, Mumbai [1983 ECR 1265D] the Tribunal held that flexible wave guides fall under Item 73(13) ICT which at the relevant time read :

73.13 Sheets and plates of iron or steel, hot-rolled or cold-rolled;

(a)      NES 60%

(b)      Tinned Sheets and Plates.

             Surely the above heading would not have covered the goods. There appears to be a typographical error while reporting. 7317.90 appears to be more appropriate which reads as follows :

7317.90      Tubes and Pipes and blanks therefore of Iron or Steel

(1)   NES

(2)   Drilling tubes and pipes and blanks therefore.

(3)   Tubes and pipes for boilers falling within Heading No. 84.01, 02

(4)   Tubes and pipes sheathed or lined with corrosion, resisting material, such as glass rubber and plastic.

(iii)      The decision in the case of CC v. Hydranautics Membrane (India) Ltd. [1994(01)LCX0073 Eq 1994 (071) ELT 0711 (Tribunal)] which held that material in running length are not treatable as parts relied upon by the lower original authority, is not applicable in all cases.

4. Heard both sides.

5. Shri K.K. Srivastava the ld. JDR argued that classification of imported goods has to be determined taking the form in which they are imported. The goods in question are flexible tubing in running lengths. There is a specific heading covering these goods under 8307. The impugned goods fall under 8307.90 as they are made of copper with an outer covering of plastic. The fact that after cutting these flexible tubings the importer would use them as Microwave Passive Components (List 9 Item 18 of Notification No. 36/96) is immaterial for the reason that end use is not important. He relied on the decision of CEGAT [1983(05)LCX0027 Eq 1983 (013) ELT 1048 (T) = 1983 ECR 1265D] which held that goods similar to the present ones are classifiable under Chapter 73 as the base metal used in the tubing is iron and steel. In the present case the base metal used is copper and therefore the goods are classifiable under 8307.90 meant for flexible tubing of other base metals. He argued that the Assistant Commissioner rightly relied on the decision of the Tribunal cited supra [1994 (071) ELT 711]. The Commissioner erred in discarding the ratio by a sweeping remark that the decision does not apply in all cases.

6. The ld. Consultant Shri R. Parthasarathy defended the order of the Commissioner (A) on the ground that the Commissioner has taken expert opinion (Department of Telecommunication) while deciding the issue of classification. He cited several Supreme Court decisions and other pronouncement and argued that expert opinion has to be taken into consideration while deciding complex issues of classification.

7. We observe that Notification No. 36/96 is applicable to parts/goods which fall under Chapter 85. The eligibility to the benefit of notification depends on the classification of goods. In the present case the goods under import are flexible tubings with protective plastic covering. There is a specific heading for such goods under 8307. We observe that note 1(k) of Section XVI rules out articles of Chapter 83 from the purview of this Section in which Chapters 84 and 85 fall. The fact that the goods would be ultimately cut to size and filled as microwave passive components should not make any difference to the issue. Secondly while deciding the classification of similar goods where the base metal used was iron and steel, the Tribunal in its decision reported [1983(05)LCX0027 Eq 1983 (013) ELT 1048 (T) = 1983 ECR 1265D] held them to be classifiable under Chapter 73 as an article of iron/steel of the erstwhile ICT and not under Chapter 85 as part of Telecommunication machinery. The same principle should apply here is the only difference appears to be that in the present case the base metal used is copper. Insofar as the expert opinion is concerned we observe that there is no doubt that the goods imported would ultimately be used as microwave passive components when cut to size but we are not concerned with the end use of the product. We also rely on the Tribunal’s decision cited Supra that goods imported in running lengths cannot be termed as parts but can be termed as raw material only. The goods as imported can be classified under 8307 which is a specific heading for such goods. Had the Notification 36/96 covered goods falling under Chapter 83 of ICT there would have been no difficulty in extending the benefit of that notification to the imported goods.

8. The appeal is allowed. The order of the Commissioner (Appeals) is set aside.

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Equivalent 2004 (172) ELT 0425 (Tri. - Mumbai)