1984 (4) TMI 186 - AT - Central Excise

Summary

Issues: Classification of imported goods under Customs Tariff Entry 65 (Rubber processing chemicals) or Entry 68 (Other chemicals); Predominant use of goods for classification purposes

In the present case, two appeals were filed against the orders of the Collector of Customs, Bombay, regarding the classification of imported goods under Customs Tariff Entry 65 or Entry 68. The first appeal involved the import of Phenyl Alpha Napthylamine, which was assessed by Customs authorities under Item No. 28 I.C.T., charging customs duty at 60% + 15%. The Assistant Collector of Customs determined the item as a rubber anti-oxidant chargeable to Countervailing Customs duty (C.V.D.) under C.E.T. 65 at 10%. The appellants contended that the goods were used as a Dye-intermediate in the manufacture of Basic Dyes and should be classified under Item 68. The Collector of Customs (Appeals) upheld the classification under Item 65. The second appeal also involved a similar import, with the Collector of Customs concluding that the goods could be used as a Rubber Anti-oxidant. The appellants argued that the predominant use of the goods should determine the classification, relying on specific references and the Colour Index. The Department failed to provide sufficient evidence of the goods' predominant use as a rubber processing chemical. The Tribunal held, following precedent, that the goods should be classified under Item 68, not Item 65, as the predominant use was for dye manufacturing, allowing the appeals.

The primary issue in the appeals was the correct classification of the imported goods under Customs Tariff Entry 65 (Rubber processing chemicals) or Entry 68 (Other chemicals). The appellants contended that the goods, Phenyl Alpha Napthylamine, were predominantly used as a Dye-intermediate in the manufacture of Basic Dyes and should be classified under Item 68. The Customs authorities had classified the goods under Item 65 as a rubber anti-oxidant. The Tribunal analyzed the predominant use of the goods and the lack of concrete evidence from the Department to establish the goods' primary use as a rubber processing chemical. Relying on legal precedents and the arguments presented, the Tribunal held that the goods should be classified under Item 68, not Item 65, as the predominant use was for dye manufacturing.

The second issue revolved around the consideration of the predominant use of the imported goods for classification purposes. The appellants argued that the primary use of the goods as a Dye-intermediate should be the basis for classification, emphasizing references to specific publications and industry practices. The Department failed to provide substantial proof of the goods' predominant use as a rubber processing chemical, leading to ambiguity in classification. The Tribunal emphasized the importance of determining the predominant use of the goods in cases with multiple potential uses. Relying on legal principles and established precedents, the Tribunal concluded that the goods should be classified under Item 68 based on their predominant use for dye manufacturing, rather than under Item 65 as a rubber processing chemical.