1996 (7) TMI 294 - AT - Customs

Summary

Issues: Classification of imported globe valves under Heading 84.61(1) or 84.61(2) of the Customs Tariff Act.

The judgment pertains to the classification of imported globe valves for Chlorine Services under Heading 84.61(1) or 84.61(2) of the Customs Tariff Act. The appellants imported the valves from West Germany and sought re-assessment under Heading 84.61(2) based on the argument that the valves were lined with corrosion-resistant materials, such as Hastelloy-C. The dispute arose as the authorities denied the re-assessment, claiming that only valves wholly made of corrosion-resistant materials fall under Heading 84.61(2). The appellants contended that even valves lined with such materials should be classified under Heading 84.61(2), as per their detailed write-up.

The main contention was whether valves lined with corrosion-resistant materials can be classified under Heading 84.61(2) of the Customs Tariff Act. The appellants argued that despite the valve body and bonnet being made of forged carbon steel, the parts directly in contact with chlorine were lined with corrosion-resistant materials like Hastelloy-C. The authorities, however, maintained that the valves did not qualify under Heading 84.61(2) as they were not wholly made of corrosion-resistant materials. The tribunal analyzed the tariff entry and agreed with the appellants, stating that valves lined with corrosion-resistant materials should indeed be classified under Heading 84.61(2).

The tribunal carefully considered the submissions from both sides and observed that the valves, even if not wholly made of corrosion-resistant materials, should fall under Heading 84.61(2) if lined with such materials. It was noted that the department did not dispute the presence of corrosion-resistant lining on the valves. Therefore, the tribunal concluded that the appellants' valves, being lined with corrosion-resistant materials, were correctly classifiable under Heading 84.61(2) of the Customs Tariff Act.

The tribunal highlighted the importance of the wording in the tariff entry, particularly the inclusion of valves lined with corrosion-resistant materials. It was emphasized that the entry encompassed valves lined with materials like stainless steel and hastelloy, indicating that lined valves were intended to be covered. In this case, where the valve components in direct contact with chlorine were lined with Hastelloy-C and other corrosion-resistant materials, the tribunal found the classification under Heading 84.61(2) appropriate. The tribunal upheld the appellants' classification argument and set aside the previous order, allowing the appeal.

In conclusion, the tribunal ruled in favor of the appellants, classifying the imported globe valves under Heading 84.61(2) of the Customs Tariff Act due to the presence of corrosion-resistant linings on the valves, even though the valves were not wholly made of such materials. The judgment clarified the classification criteria for valves lined with corrosion-resistant materials under the relevant tariff entry, emphasizing the inclusion of lined valves within the scope of Heading 84.61(2).