1993 (5) TMI 32 - HC - Customs

Summary

Issues Involved:
1. Classification of the imported machine under the appropriate tariff heading.
2. Relevance of the actual use of the machine in determining its classification.
3. Determination of whether polypropylene tapes are considered textiles.

Issue-wise Detailed Analysis:

1. Classification of the Imported Machine:
The primary dispute revolves around whether the imported Criss-Cross Winding Automatic Machine should be classified under Heading No. 84.45 sub-heading 8445.40, which pertains to textile winding machines, or under sub-heading 8479.89, which is a residuary category for machines not specified elsewhere. The machine was initially classified under sub-heading 8479.89 but was later reassessed to 8445.40 upon the petitioners' request. However, the Customs Authorities reverted to the original classification under 8479.89.

2. Relevance of Actual Use:
The petitioners argued that the actual use of the machine is immaterial for its classification. They contended that the machine should be classified based on its description and not its end-use. The respondents countered that the machine was primarily for winding polypropylene tapes, as indicated in the manufacturer's brochure and the proforma invoice, and thus should not be classified under a textile machine heading. The court held that the word 'for' in Tariff Heading 84.45 is used descriptively and does not imply actual use. The court cited several precedents, including Dunlop India Ltd. and Madras Rubber Factory Ltd. v. Union of India and Ors., to support the principle that end-use is irrelevant when the tariff entry does not reference it.

3. Determination of Whether Polypropylene Tapes are Textiles:
The court examined whether polypropylene tapes, which the machine was intended to wind, could be considered textiles. The DGTD noted that such machines are generally used in textile industries for winding yarns. The court referred to the Harmonised Commodity and Description and Coding System, which describes polypropylene as a synthetic fibre used in the textile process. Additionally, Tariff Item 54.04, which covers strips not exceeding 5mm, falls under Chapter 54 dealing with man-made filaments within Section XI relating to textiles and textile articles. The court concluded that the strips to be wound by the machine are indeed textile articles.

Final Judgment:
The court ruled that the machine in question falls within the Tariff Heading 8445.40, as it is a textile winding machine. The classification under sub-heading 8479.89 was deemed perverse and unreasonable. The court emphasized that a specific entry should exclude a general entry, citing precedents such as Superintendent of Central Excise v. VAC Mat Corporation Pvt. Ltd. and Bharat Forge and Press Industries (P) Ltd. v. Collector of Central Excise. The writ application was allowed, and the Customs Authorities were directed to classify the machine under sub-heading 8445.40 and clear it accordingly. Any proceedings based on the classification under sub-heading 8479.89 were quashed.

Additional Orders:
The court ordered the cancellation and return of the bank guarantee provided by the petitioner. A xerox copy of the judgment was to be given to the parties upon their undertaking to apply for a certified copy and payment of usual charges.

Conclusion:
The court's decision underscores the importance of adhering to specific tariff classifications based on the description of the goods rather than their end-use, ensuring consistency and fairness in customs assessments.