2022 (3) TMI 1489 - AT - Customs

Classification of imported goods - Aluminum slugs - classifiable under heading no. 7616 99 90 or under the sub-heading 7606 91 10 - HELD THAT - Admittedly the imported goods are used by the importer to manufacture the finished goods classifiable under Chapter Heading 7608. The classification as proposed by the Revenue under Heading 7616, goes contrary to the General Structure of Tariff, which classifies the raw materials used in the manufacture of the finished goods under heading which occur prior to the heading of the finished goods. In case of Shalimar Textile Mfg. 1990 (3) TMI 162 - CEGAT, NEW DELHI relied upon by the Commissioner (Appeals) Tribunal was not concerned with the classification of aluminum slugs , but was concerned with admissibility of exemption under Notification No. 173/77-Cus. - As per this decision also the Slug is a plate, sheet or strip prepared for subsequent fabrication. When it is in circular shape it is circle. Undisputedly if the classification of the said product is to be determined by the application of this decision also then by application of the Note d to Chapter 76, these slugs will be classified under Heading 7606 only. There are no merits in the impugned order - appeal allowed.

Summary

Issues Involved:
1. Classification of Aluminum Slugs.
2. Adherence to past customs classification practices.
3. Applicability of specific versus residuary tariff headings.
4. Interpretation of relevant tariff headings and notes.
5. Treatment of aluminum slugs in the context of the manufacturing process.

Issue-wise Detailed Analysis:

1. Classification of Aluminum Slugs:
The primary issue is the classification of "Aluminum Slugs" imported by the appellant. The appellant claimed classification under Heading 7606 91 10, which pertains to "Aluminium Plates, Sheets and Strip, of a thickness exceeding 0.2 mm," specifically under the sub-heading for "circles." The customs authority, however, classified the goods under Heading 7616 99 90, which covers "Other articles of Aluminium."

2. Adherence to Past Customs Classification Practices:
The appellant argued that the customs had previously classified the same goods under Heading 7606 91 10, and the change in classification for the goods imported in November 2009 was done without any notice or speaking order. The appellant provided copies of past Bills of Entry to support this claim.

3. Applicability of Specific Versus Residuary Tariff Headings:
The tribunal emphasized that classification should be made under specific entries in preference to residuary entries. The appellant contended that the aluminum slugs, being circular pieces obtained by punching from an aluminum strip, should be classified under Heading 7606 as "circles." The tribunal noted that the revenue intended to classify the goods under a residuary heading, which is generally less specific.

4. Interpretation of Relevant Tariff Headings and Notes:
The tribunal examined the competing tariff headings. Heading 7606 covers "Aluminium Plates, Sheets and Strip, of a thickness exceeding 0.2 mm," including "circles." Heading 7616 is a residuary heading for "Other articles of aluminium." The tribunal referred to Note "d" to Chapter 76, which states that plates, sheets, strip, and foil of aluminum, including those of shapes other than rectangular or square, should be classified under Heading 7606 or 7607, provided they do not assume the character of articles or products of other headings.

5. Treatment of Aluminum Slugs in the Context of the Manufacturing Process:
The appellant used the aluminum slugs to manufacture aluminum collapsible tubes through an impact extrusion process. The tribunal noted that the classification proposed by the revenue under Heading 7616 would be contrary to the general structure of the tariff, which classifies raw materials used in manufacturing under headings that occur prior to the heading of the finished goods. The tribunal also referred to the case of Shalimar Textile Mfg., where it was observed that slugs are distinct from circles but are prepared for subsequent fabrication.

Conclusion:
The tribunal concluded that the aluminum slugs imported by the appellant should be classified under Heading 7606 as "circles," based on the specific description provided in the tariff and the general rules of interpretation. The impugned order was set aside, and the appeal was allowed.

Order:
The tribunal set aside the impugned order and allowed the appeal, pronouncing the order in open court.