1990 (2) TMI 201 - AT - Customs

Coils - Hot rolled coils imported are semi-finished as is evident from certification given by a firm of Consulting Engineers

Summary

Issues Involved:
1. Classification of hot rolled coils.
2. Eligibility for concessional duty under Customs Notification No. 86/86 and 61/86.
3. Definition and interpretation of "semi-finished" products.
4. Relevance of end-use in determining eligibility for concessional duty.
5. Procedural aspects regarding cross-objections and miscellaneous applications.

Detailed Analysis:

1. Classification of Hot Rolled Coils:
The respondents imported hot rolled coils and sought classification under sub-heading 7208.24, claiming the benefit of concessional duty under Customs Notification No. 86/86 and 61/86. The adjudicating authority assessed the goods under Heading 7208.24 with a duty rate of 80% basic and 40% auxiliary, as per Notification No. 89/86. The respondents argued that the goods should be classified as "coils for re-rolling" under Notification No. 86/86, which offers a concessional rate of 40% duty.

2. Eligibility for Concessional Duty:
The respondents contended that the hot rolled coils met the criteria for "coils for re-rolling" as defined in Notification No. 86/86, which describes them as "coiled, semi-finished, hot-rolled products of a rectangular section not less than 1.5 mm thick, of a width exceeding 500 mm and of a weight of not less than 500 kgs. per piece." The Assistant Collector rejected this claim, stating that the industrial license did not indicate engagement in re-rolling activities and that the coils were intended for manufacturing tubes/pipes, not re-rolling.

3. Definition and Interpretation of "Semi-Finished" Products:
The core issue was whether the imported coils qualified as "semi-finished" products. The Assistant Collector applied the definition from Chapter Note 1(ii) of Chapter 72, which excludes products presented in coils from being considered semi-finished. The respondents argued that this definition should not apply as it was introduced after the notification. They supported their claim with a certificate from M.N. Dastur & Co., stating that the hot rolled coils were semi-finished products. The Collector (Appeals) agreed with the respondents, noting that the Ministry of Finance had clarified that the definition of semi-finished products in Chapter 72 applied only to goods under Heading 72.07, not to coils for re-rolling.

4. Relevance of End-Use:
The respondents argued that the end-use of the coils was irrelevant to the eligibility for concessional duty under Notification No. 86/86. They maintained that the notification did not stipulate that only importers engaged in re-rolling activities were eligible for the concessional rate. The Collector (Appeals) concurred, stating that the notification did not impose any end-use conditions and that the manufacturing process of pipes and tubes involved re-rolling, thereby qualifying the goods for concessional duty.

5. Procedural Aspects:
During the hearing, the Tribunal dismissed the respondents' cross-objections as time-barred and granted permission to withdraw miscellaneous application No. 450/88. The Tribunal also allowed miscellaneous application No. 71/89-B2, filed by the appellants, for the admission of additional documents.

Conclusion:
The Tribunal upheld the Collector (Appeals)'s decision, confirming that the imported hot rolled coils were eligible for concessional duty under Notification No. 86/86. The Tribunal found that the coils met the criteria for "coils for re-rolling" and were considered semi-finished products. The Tribunal also agreed that the end-use of the coils was not relevant to their eligibility for concessional duty. The appeal by the revenue was dismissed.