1997 (4) TMI 207 - AT - Customs

Summary

Issues Involved:
1. Classification of stainless steel screws with plastic washers.
2. Applicability of Notification 133/86 for Polyol for CV duty purposes.

Issue 1: Classification of Stainless Steel Screws with Plastic Washers

The primary issue was whether stainless steel screws with plastic washers should be classified under Tariff Heading 7318.15 or 3907, considering the interpretative rules and Section 19 of the Customs Act, 1962. The Revenue argued that since the screws and washers were made of different materials, they should be assessed under the highest applicable rate, which in this case was for plastic washers under Tariff Heading 3907. The respondent contended that the screws should be classified under 7318.15, which includes screws of iron or steel, whether or not with nuts or washers.

The Tribunal observed that the screws and washers, being imported together and intended for use together, should be considered as a set of articles. Since Tariff Heading 7318 specifically covers articles made of iron and steel, and the plastic washers do not fall under this category, the set cannot be classified under 7318.15. The Tribunal ruled out the application of Interpretative Rule 3(b) because the goods were not put up in sets for retail sale. Consequently, the assessment had to be done under Section 19(b) of the Customs Act, which mandates that the highest rate applicable to any item in the set be used. The Tribunal concluded that the goods should be assessed under Section 3926.90, applicable to plastic washers, and allowed the Revenue's appeal.

Issue 2: Applicability of Notification 133/86 for Polyol

In the cross appeal, the issue was whether the Polyol imported by the respondents should be given the benefit of Notification 133/86 for CV duty purposes. The lower appellate authority had classified the goods under Heading 3907.99 and held that the appellants were eligible for the benefit of Modvat. The respondents argued that they should be given the benefit of Notification 133/86, which applies to polyester resins under sub-heading 3907.99.

The Tribunal examined the applicability of Notification 133/86 and noted that polyester polyols and polyester resins are distinct products. The benefit of the notification was extended only to polyester resins. The Tribunal found no evidence to establish that the imported Polyol was a polyester resin. The Tribunal referred to the McGraw Hill dictionary definition of polyester resin and found that the Polyol did not meet this description. Therefore, the Tribunal upheld the lower appellate authority's decision and dismissed the cross appeal, denying the benefit of Notification 133/86 to the respondents.