1993 (6) TMI 149 - AT - Customs

Summary

Issues Involved:
1. Correct classification of "Grinding Steel Balls" under the Customs Tariff Act, 1975.
2. Applicability of Section Notes and Chapter Notes for classification.
3. Determination of whether the item is stainless steel.
4. Reassessment of the item under a different sub-heading.

Detailed Analysis:

1. Correct Classification of "Grinding Steel Balls":
The primary issue revolves around the correct classification of "Grinding Steel Balls" under the Customs Tariff Act, 1975. The importer claimed assessment under tariff sub-heading 73.33/40, while the Assistant Collector classified the item under sub-heading 73.33/40(2) as articles of stainless steel. The Collector (Appeals) reassessed the item under sub-heading 84.56, arguing that the item is used in clinker grinding mills of cement plants and constitutes an integral part of the grinding mill.

2. Applicability of Section Notes and Chapter Notes for Classification:
The Revenue contended that as per section notes of Chapter 84, steel balls should be classified under sub-heading 73.33/40, except for polished steel balls. They relied on Note 1(f) of Section XV, which excludes articles falling within Section XVI, and Note 1(a) of Section XVI, which excludes other articles of a kind used for machinery. The Revenue argued that the item should be classified under sub-heading 73.33/40 based on these notes and explanatory notes at page 1036 of CCCN.

3. Determination of Whether the Item is Stainless Steel:
The Assistant Collector noted that the importer declared the item as alloy steel balls containing chromium in the range of 10-20%. The Assistant Collector referred to the definition of stainless steel, which categorizes steel containing more than 12% chromium as stainless steel, and thus classified the item under sub-heading 73.33/40(2). However, the show cause notice dated 14-10-1983, adjudicated by the Collector of Customs, Bombay, accepted the importer's plea that the goods were not stainless steel, allowing clearance under OGL. This decision undermined the basis for the Assistant Collector's classification.

4. Reassessment of the Item Under a Different Sub-Heading:
The Collector (Appeals) classified the item under sub-heading 84.56, arguing that the steel balls are integral parts of the grinding mill in a cement plant and not usable by themselves. The interpretative rules for the Customs Tariff were considered, noting that the imported steel balls should not be seen as mere steel balls but as parts of the grinding mill. The Collector emphasized that the grinding mill for crushing clinkers in the cement plant is a Ball Mill, and the steel balls are essential for its operation. Thus, the classification under sub-heading 84.56 was deemed appropriate.

Judgment:
The Tribunal upheld the Collector's reasoning, stating that the imported steel balls are integral parts of the Ball Mill of the Cement Plant. The Tribunal found no infirmity in the Collector's reasoning and upheld the classification under sub-heading 84.56 of the Customs Tariff Act, 1975. The appeal by the Revenue was dismissed, affirming that the explanatory notes to Heading 73.40 of CCCN cannot override the Section Notes and Chapter Notes of CTA, 1975. The imported item, being an integral part of the grinding mill, was correctly classified under sub-heading 84.56.