1986 (10) TMI 145 - AT - Central Excise

Issues: Classification for customs duty of imported goods under Bills of Entry: (1) No. 1712, dated 13-7-1977; (2) No. 3333, dated 13-11-1977; and (3) No. 1154, dated 8-12-1977.

In the judgment delivered by the Appellate Tribunal CEGAT, New Delhi, the issue involved pertained to the classification for customs duty of goods imported under three Bills of Entry. The goods, described as 'drill pipes,' were assessed under T.I. 73.17/19(2) of the Customs Tariff Act of 1977. The appellants contended that the drill pipes were meant for fitting into portable oil rigs falling under T.I. 84.23 of the CTA. The appellants argued that the drill pipes should be classified as parts of machinery under T.I. 84.23 instead of T.I. 73.17/19(2. They relied on Section Note 2(b) of Section XVI and Explanatory Notes to C.C.C.N. to support their classification claim.

The appellants' main contention was that the drill pipes were specifically designed for use with oil rigs falling under T.I. 84.23 of the CTA. They argued that the lower authorities erred in classifying the drill pipes under T.I. 73.17/19(2) instead of T.I. 84.23. The appellants emphasized that the drill pipes' special features, as per specifications provided, indicated their classification as parts of machinery under T.I. 84.23. They also relied on Explanatory Notes to C.C.C.N. to support their classification argument. However, they could not provide concrete evidence that the drill pipes were solely or principally meant for use in oil rigs.

The Respondent, the J.D.R., countered the appellants' arguments by pointing out that T.I. 73.17/19(2) specifically covered drilling tubes, pipes, and blanks thereof, which was a deviation from the C.C.C.N. The Respondent argued that the specific heading in the CTA should prevail over general headings, and the appellants failed to prove that the drill pipes were solely or principally for use in machinery falling under T.I. 84.23. The Respondent also cited a previous judgment to support their position that spare parts need not necessarily fall under the machinery chapter.

After careful consideration, the Tribunal found that the appellants had not substantiated their claim that the drill pipes were specific parts of machinery under T.I. 84.23. The Tribunal agreed with the Respondent that the drill pipes were correctly classified under T.I. 73.17/19(2) based on the materials and design. The Tribunal concluded that the Explanatory Note to C.C.C.N. could not aid the appellants' case, and the classification by the Customs authorities was deemed correct. Thus, the appeals on the classification for basic customs duty were dismissed.

Regarding the quantum of C.V. duty in one of the appeals, the Tribunal noted discrepancies in the rate applied for C.V. duty compared to other similar cases. The Tribunal remanded the matter to re-examine the rate of C.V. duty applicable in that specific case, allowing the appeal only to that limited extent. The Assistant Collector of Customs was directed to re-adjudicate on the rate and quantum of C.V. duty payable within four months.

← Previous Next →