1983 (4) TMI 280 - AT - Central Excise

Summary

Issues: Classification of goods under Customs Tariff Schedule, Levy of countervailing duty

Classification of Goods under Customs Tariff Schedule:
The judgment involved two appeals concerning the classification of "Diamonds impregnated grinding wires" under the Customs Tariff Schedule. The Customs authorities at Madras initially assessed the goods under Heading No. 68.01/16(1) for duty, while the appellants claimed they should be classified under Heading No. 82.05(1). The dispute centered around whether the goods qualified as tools under Note 1(c) of Chapter 82 or fell under the category of natural abrasives under Heading No. 68.01/16(1). The appellants argued that the wires were akin to a diamond dressing tool, used for precision grinding operations. However, the lower authorities rejected this classification, emphasizing that the wires lacked cutting teeth, flutes, or grooves of base metal as required by Note 1(c). The judgment analyzed the technical aspects of the goods, noting that while the wires had diamond grains coated on a base wire of spring steel, they did not meet the criteria of a tool as defined by the Customs Tariff Schedule. The judgment ultimately concluded that the appropriate classification for the goods was under Heading 68.01/16(1) and not 82.05.

Levy of Countervailing Duty:
The appellants also challenged the levy of countervailing duty under Item No. 51(1) of the Central Excise Tariff Schedule. They contended that the goods, consisting of fine diamond grains impregnated on a spring steel wire, did not fall within the scope of Item No. 51. The judgment acknowledged the appellants' arguments but highlighted that the goods, being in a ready-to-use condition and meeting the description of Item No. 51(1), were subject to the levy of countervailing duty. The judgment noted that the specific sub-item under which the goods were assessed was not clear from the record but deemed it an academic issue due to the uniform duty rate for both sub-items. Consequently, the appeals challenging the classification and levy of countervailing duty were rejected based on the detailed analysis and interpretation of the relevant tariff provisions and technical characteristics of the goods presented during the proceedings.