1983 (7) TMI 315 - AT - Customs

Summary

Issues: Classification of imported carbon rods for dry cell batteries under Customs Act, 1962.

The judgment pertains to the classification of imported carbon rods for dry cell batteries under the Customs Act, 1962. The appellants, an industrial concern manufacturing dry cell batteries, imported carbon rods which were initially assessed under a specific duty item. However, a notice was issued by Customs authorities stating that the goods should have been assessed under a different sub-item, resulting in a short-levied amount. The dispute centered around whether the carbon rods should be classified as battery carbons or as carbon electrodes for electrolysers. The Assistant Collector and the Appellate Collector both held that the goods should be classified as battery carbons under a specific sub-item, rejecting the appellants' argument that the carbon rods should be assessed under a different sub-item meant for electrolysers.

In the appeal, the appellants argued that the carbon rods only become part of the battery after further processing and should be classified under the sub-item for electrolysers as the batteries function based on the principle of electrolysis. The Department, on the other hand, argued that the goods should be classified as battery carbons based on the Explanatory Notes for the relevant heading, distinguishing between carbon electrodes for electrolysis and battery carbons. The Department cited technical definitions to support their classification.

The Tribunal deliberated on whether dry cell batteries, utilizing carbon rods, could be considered as electrolysers. It was noted that while the batteries operate based on the principle of electrolysis, there was no evidence to suggest that dry cell batteries are commonly referred to as electrolysers in trade circles. The Tribunal also considered the Explanatory Notes provided for the relevant heading, which differentiated between carbon electrodes for electrolysis and battery carbons. Ultimately, the Tribunal agreed with the Department's classification, concluding that the imported goods were correctly classifiable as battery carbons under the specific sub-item. As a result, the appeal was dismissed, and the order confirming the duty assessment was upheld.