1987 (6) TMI 313 - AT - Customs

Summary

Issues: Classification of imported parts of heat exchanger under Customs Tariff Act, 1975

In this judgment by the Appellate Tribunal CEGAT, New Delhi, the issue revolved around the classification of imported parts of a heat exchanger under the Customs Tariff Act, 1975. The Appellate Collector had dismissed the appellants' claim for assessment of the imported parts under Heading No. 84.17 and upheld the classification under Heading No. 68.01/16. The reason given was that the goods, though parts of a heat exchanger, were excluded from Chapter 84 as they were considered articles of carbon falling within Chapter 68.

The first key argument presented by the appellants was based on a previous decision by the Tribunal in Sawrashtra Chemicals v. Collector of Customs, Bombay, where it was held that carbon rings, as parts of machinery, should be classified under Heading No. 84.65 and not under Heading No. 68.01/16. The appellants relied on this decision to support their classification claim.

However, a subsequent decision by a Five-Member Bench of the Tribunal in Sawrashtra Chemicals, Porbandar v. Collector of Customs, Bombay, contradicted the earlier decision. In this case, it was ruled that even fully furnished machinery parts made of carbon would fall under Chapter 68 and not under Heading 84.65. This decision went against the appellants' argument.

The appellants further contended that since the subject goods were made of graphite, a form of carbon, and carbon was not specified in Chapter 68, the goods should be classified under Heading 84.65. They argued that carbon, being specified in Chapter 28, was not covered by Chapter 68. Additionally, they cited Note 2(b) to Section XVI, stating that parts should be classified under the same heading as the machinery of which they are parts.

The Tribunal, however, rejected the appellants' contentions, stating that the issue had already been addressed in the previous Five-Member Bench decision. It was clarified that Chapter 28 covered chemical elements, including carbon, and chemically defined compounds, not articles made of them. The Tribunal also emphasized that Note 2(b) to Section XVI was subject to Note 1 to Chapter 84, which had been fully considered in the previous decision, leading to the classification of machinery parts made of carbon under Chapter 68.

Additionally, a previous Tribunal order in the case of M/s. Hindustan Zinc Ltd., Udaipur, had classified graphite blocks imported for fitment as spares in heat exchangers under Heading 68.01/16, further supporting the classification of the goods in question under Chapter 68.

Ultimately, the Tribunal upheld the classification of the goods under Heading 68.01/16, confirming the Appellate Collector's decision and dismissing the appeal made by the appellants.