1995 (3) TMI 89 - SC - Central Excise

Whether PVC impregnated cotton conveyor belting and PVC impregnated flame resistant colliery conveyor belting will be classified under Tariff Entries 3922.90 or 3920.11 or 3920.12? Held that - The appeals, therefore, succeed. The judgment and order under appeal is set aside. The respondents are directed to classify the appellants' conveyor belts under Tariff Heading 3922.90 for the period December 1986 to 9th February 1987 and under Tariff Heading 3926.90; for the period 10th February 1987 to June 1987.

Summary

Issues: Classification of PVC impregnated cotton conveyor belting and PVC impregnated flame resistant colliery conveyor belting under Tariff Entries 3922.90, 3920.11, or 3920.12.

In this judgment, the Supreme Court addressed the classification issue of PVC impregnated cotton conveyor belting and PVC impregnated flame resistant colliery conveyor belting under Tariff Entries 3922.90, 3920.11, or 3920.12. The Customs, Excise and Gold (Control) Appellate Tribunal had dismissed the appeals filed by the appellants, upholding the Excise authorities' contention that the products should be classified under Tariff Entries 3920.11 or 3920.12 based on whether they were rigid or flexible strips. The Tribunal relied on the dictionary meaning of "strip" and a previous court judgment. The period of concern was December 1986 to June 1987.

The Central Excise Tariff Act, 1985, provided rules for interpreting the tariff schedule. Rule 1 emphasized classification based on headings, notes, and provisions. Rule 2(a) included incomplete goods if they had the essential character of complete goods. Rule 3 guided classification based on specificity, and Rule 4 applied when goods couldn't be classified per previous rules. Chapter 39 included "Plastics and articles thereof," noting that Heading No. 39.22 applied to transmission, conveyor, or elevator belts.

The judgment analyzed the changes in Tariff Headings from 1986 to 1987, highlighting the transition from 39.20 to 39.26 and the relevant classifications. The Explanatory Note to Tariff Heading 39.26 specified the inclusion of transmission, conveyor, or elevator belts. The Tribunal's assessment of the belting's characteristics as "strip" was challenged, considering the length, width, and thickness of the belting, which did not align with the definition of "strip." The appellants argued for classification under Tariff Entries 3922.90 and 3926.90 based on the rules and explanatory notes.

The judgment addressed the Excise authorities' attempts to classify the belting under Tariff Heading 59.08, which was dismissed based on previous court actions. It was noted that the Excise authorities could not introduce new arguments at that stage. The Tribunal's reliance on a previous court judgment was deemed misplaced as the tariff schedule rules required classification based on headings and notes. The belting was not considered a "strip," leading to the conclusion that Tariff Heading 39.26 applied to the appellants' conveyor belts for the respective periods.

Ultimately, the appeals were successful, setting aside the previous judgment and directing the classification of the appellants' conveyor belts under Tariff Heading 3922.90 for December 1986 to 9th February 1987 and under Tariff Heading 3926.90 for the period from 10th February 1987 to June 1987. The respondents were ordered to pay the costs of the appeals.