1993 (3) TMI 123 - HC - Central Excise

Summary

Issues: Classification of "Components for Cable Jointing Kits" under Chapter 85 Heading 47 or Chapter 39 Heading 26 of the Customs Tariff Act.

The judgment by the High Court of Judicature at Bombay dealt with the classification of "Components for Cable Jointing Kits" under the Customs Tariff Act. The main issue was whether these articles should be classified under Chapter 85 Heading 47 or Chapter 39 Heading 26. The court noted that the subject articles were used in a sophisticated manner for insulating joints in electrical cables to ensure continued power supply. The articles were previously classified under Heading 85.46 but were later classified under Heading 39.26, which was challenged in the petitions. The court emphasized that the Customs Tariff had not undergone any change to justify the reclassification.

The court analyzed the relevant headings under the Customs Tariff Act. Chapter 39 covers "Plastics and Articles thereof," while Chapter 85 includes Insulating Fittings. The court applied the principle of "Generalia Specialibus non Derogant," which means that specific provisions prevail over general ones. The court also considered how the articles were identified by users, with certifications from Mahanagar Telephone Nigam Limited and Delhi Electric Supply Co. Ltd. confirming the articles as 'heat shrinkable insulating material for cable jointing.' Additionally, a Customs Tariff Advice stated that Heat Shrinking material falls under Chapter 85.

Regarding the description of the articles in Bills of Entry, the court found that even if described as raw materials for manufacturing components for cable jointing kits, they should not be classified under the general plastic articles heading of 39.26. The court concluded that the articles were more akin to Heading 85.47, which covers insulating fittings for electrical equipment. The court rejected the argument that alternate remedies under the CTA should be pursued, as the point of law was clear, and the goods had already been released by an interim court order.

Ultimately, the court declared that the subject goods should be classified under Heading 85.47 and quashed the decision to classify them under Heading 39.26. The court also directed the discharge of bonds related to interim orders after 12 weeks. All the petitions were allowed, and no costs were awarded.