1997 (11) TMI 115 - AT - Central Excise

Summary

Issues Involved:
Classification of Karbate Tubes of artificial graphite impregnated with phenolic resin under sub-heading 6815.10 or 8419.50.

Issue-Wise Detailed Analysis:

1. Classification Dispute:
The primary issue is whether the Karbate Tubes of artificial graphite impregnated with phenolic resin, used as part of heat exchangers, should be classified under sub-heading 6815.10 as per the department or under sub-heading 8419.50 as claimed by the importer.

2. Appellant's Argument:
The appellants argued that the imported goods should fall under Chapter Heading 84.19, as they are parts of heat exchangers and are made of artificial graphite, not covered by Chapter Heading 68.15. They cited several judgments to support their claim, including the decision of the Hon'ble Supreme Court in Ballarpur Industries Limited [1995 (75) E.L.T. 6 (S.C.)], and other Tribunal decisions like Shriram Foods and Fertilisers Industries [1994 (71) E.L.T. 1047], Shriram Vinyl and Chemical Industries [1989 (43) E.L.T 87], and Graphite Vicarb India Limited [1997 (93) E.L.T. 710].

3. Revenue's Argument:
The Revenue contended that the goods should be classified under Chapter Heading 68.15, specifically under sub-heading 6815.10, which includes non-electrical articles of graphite or other carbon. They relied on the Harmonised System of Nomenclature (HSN) Explanatory Notes, which include non-electrical articles of artificial graphite under Chapter Heading 68.15. They also referred to the decision of the Larger Bench of the Tribunal in Saurashtra Chemicals, Porbandar [1986 (23) E.L.T. 283], which was confirmed by the Apex Court [1997 (95) E.L.T. 455 (S.C.)].

4. Examination of HSN Explanatory Notes:
The Tribunal noted that the Customs Tariff is fully aligned with the HSN and its Explanatory Notes, which provide that non-electrical articles of artificial graphite are covered under Chapter Heading 68.15. The Tribunal also referred to several Supreme Court decisions, including Bakelite Hylam Limited [1997 (91) E.L.T. 13 (S.C.)] and Wood Craft Products Ltd. [1995 (77) E.L.T. 23 (S.C.)], which emphasized the relevance of HSN Explanatory Notes in resolving tariff classification disputes.

5. Analysis of Previous Decisions:
The Tribunal analyzed previous decisions, noting that earlier decisions under the 1975 Customs Tariff Act, prior to its alignment with HSN, may not be applicable. The Tribunal distinguished between the earlier tariff aligned with CCCN and the current tariff aligned with HSN, emphasizing that the latter should guide the classification.

6. Conclusion:
The Tribunal concluded that the imported Karbate Tubes of artificial graphite impregnated with phenolic resin should be classified under Chapter Heading 68.15, specifically under sub-heading 6815.10. The Tribunal found that the exclusion in Note 1(a) to Chapter 84 applies, thereby excluding the goods from classification under Chapter 84, even though they are parts of machinery.

7. Separate Judgments:
Justice U.L. Bhat, President, and other members delivered separate concurring judgments, agreeing with the conclusion that the goods should be classified under sub-heading 6815.10. They emphasized the alignment of the Customs Tariff with HSN and the persuasive value of HSN Explanatory Notes.

Final Decision:
The appeal was rejected, and the impugned order classifying the goods under sub-heading 6815.10 was upheld.