1992 (7) TMI 196 - AT - Customs

Summary

Issues Involved:
1. Classification of the imported item "Master Board" under the Customs Tariff Act, 1985.
2. Applicability of Rule 3(b) of the General Rules of Interpretation of the Tariff Schedule.
3. Consideration of previous rulings and their applicability to the present case.

Detailed Analysis:

1. Classification of the Imported Item "Master Board":
The primary issue revolves around the classification of the imported item "Master Board." The Assistant Collector initially classified the item under sub-heading 6809.90 of CTA, 1985, as "articles of stone, plaster, cement, asbestos, mica or similar materials," with a duty of 100% plus 40% and additional duty of 15%. The importer, however, claimed it should be classified under sub-heading 3823.90 of CTA, 1985, which covers "prepared binders and chemical products and preparations of chemical or allied industries and residual of the chemical or allied products." The Collector (Appeals) held the product to be classifiable under Heading 68.08.

The appellants argued that the "Master Board" is made primarily of calcium silicate reinforced with cellulose and does not contain asbestos or any other inorganic, mineral, or man-made fiber. They contended that the classification should be based on the ingredient chemical providing the essential character, thus falling under Chapter 38. They also argued that the product, being a basic material for fire-resistant products, should not be classified as a 'board' under Heading 68.08 but rather as a chemical product under Heading 38.23.

2. Applicability of Rule 3(b) of the General Rules of Interpretation of the Tariff Schedule:
The Assistant Collector and the Collector (Appeals) applied Rule 3(b) of the General Rules of Interpretation of the Tariff Schedule, which states that goods should be classified based on the material or component that gives them their essential character. The appellants argued that Rule 3(a) should be applied instead, as the item is predominantly a chemical product. However, the Revenue argued that the item, being in the form of a board and not traded as a chemical product, should be classified under Heading 68.08, which specifically mentions boards made of vegetable fiber agglomerated with mineral binders.

3. Consideration of Previous Rulings and Their Applicability:
The appellants cited previous rulings, including a Gujarat High Court ruling in the case of Bhor Industries Ltd. v. Union of India and a Supreme Court ruling in the case of Khandelwal Metal & Engg. Works v. Union of India. However, the Collector (Appeals) held that these rulings were not applicable to the present case. The Gujarat High Court ruling was based on the fact that plastics constituted only 10-15% of the product, which was not the case here. The Supreme Court ruling was based on Section Notes 3(a) to Section XV relating to alloys, which was also not applicable.

The Tribunal, after considering the submissions and the product literature, concluded that the "Master Board" has multiple uses and is not exclusively used for fire protection doors. The product literature described it as a building board made of calcium silicate matrix reinforced with cellulose, which does not contain asbestos or any other inorganic, mineral, or man-made fiber. The Tribunal noted that the product is traded as a board and not as a chemical product, thus supporting the classification under Heading 68.08.

The Tribunal also referred to the ruling in the case of Atul Glass Industries Ltd. & Others v. C.C.E., where the Supreme Court emphasized that the classification of a product should be based on how it is identified by the class or section of people dealing with or using the product. The Tribunal upheld the reasoning given by the Collector (Appeals) that the "Master Board" should be classified under Heading 68.08, as it is more specific than a general heading and is identifiable as a board.

Conclusion:
The Tribunal dismissed the appeals, upholding the classification of the imported item "Master Board" under Heading 68.08 of the Customs Tariff Act, 1985. The Tribunal found that the product, being traded and identified as a board, is more appropriately classified under Heading 68.08 rather than as a chemical product under Chapter 38. The Tribunal also held that the application of Rule 3(b) of the General Rules of Interpretation was not necessary, as the classification could be determined based on the terms of the heading and related Chapter or Section notes.