1992 (12) TMI 137 - AT - Customs

Issues Involved:
1. Classification of imported goods under the Customs Tariff Act.
2. Eligibility for exemption under Notification No. 69/87-Cus.
3. Applicability of Chapter Notes to determine classification.
4. Consideration of new grounds at the appellate stage.

Detailed Analysis:

1. Classification of Imported Goods under the Customs Tariff Act:

In E/Appeal No. 2127/89-D, the importer sought a refund for excess customs duty paid on 'Filter Bag spares' and 'Filter Bags Woven Type Glass,' initially classified under Heading No. 7019.00. The Assistant Collector maintained that the exemption under Notification No. 69/87-Cus. was not applicable since the goods were not covered under Heading 98.06. The Collector upheld this decision, emphasizing that the issue of classification was not raised before the lower authorities.

In C/Appeal No. 1408/90-D, the imported filter bags were assessed under Heading 9806.00, but the Assistant Collector and the Collector (Appeals) denied the benefit of Notification No. 69/87-Cus. due to the exclusion of glass articles. The appellants argued that the filter bags should be classified under Heading 8421.29 as parts of machinery, which would make them eligible for the exemption.

2. Eligibility for Exemption under Notification No. 69/87-Cus.:

The appellants contended that the imported items should be considered under Heading 98.06, which would make them eligible for the exemption under Notification No. 69/87-Cus. They argued that the filter bags, although made from glass fiber, should not be classified as glass articles. They cited the Supreme Court ruling in Geep Flash Light Industries Ltd. v. U.O.I., which emphasized the importance of common parlance in classification.

3. Applicability of Chapter Notes to Determine Classification:

The appellants argued that Chapter Note 1 to Chapter 98 should be considered, which states that parts of machinery, even if covered elsewhere, should be classified under Chapter Heading 98. However, Note 7(d) provides exclusions, and Notification No. 257/88 excluded certain items from Heading 98.06. They argued that both notifications should be read together to determine the correct classification.

The Collector (Appeals) in C/Appeal No. 1408/90-D concluded that filter bags made of glass fiber fall under Chapter 70 due to Chapter Note 1(c) to Chapter 84, which excludes glass articles. The Explanatory Notes to the Harmonized Commodity Description and Coding System supported this classification, indicating that glass fiber articles are classified under Heading 7019.90.

4. Consideration of New Grounds at the Appellate Stage:

The appellants in E/Appeal No. 2127/89-D argued that their refund claim implicitly included a request for reclassification under Heading 9806. The Collector, however, held that new grounds raised at the appellate stage were not entertainable. The appellants cited rulings in Sunrise Electric Corporation Bombay v. CC Bombay and Premier Tyres Ltd. Kala Massey v. CC Madras to support their argument that correct classification can be raised at the appellate stage.

Conclusion:

The Tribunal upheld the classification of the imported goods under Heading 7019.90 as articles made of glass fiber. The appeals were dismissed on the grounds that the items were appropriately classified under Chapter 70, and the benefit of Notification No. 69/87-Cus. was not available due to the exclusion of glass articles. The Tribunal emphasized that the classification under Chapter 84 was not applicable due to Chapter Note 1(c), and the items were specifically excluded from Heading 8421.39. The Tribunal also held that new grounds raised at the appellate stage were not entertainable, affirming the decisions of the lower authorities.

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