2000 (5) TMI 198 - SC - Customs

Whether hydrochloric acid synthesis unit of combustion chambers is classifiable under Heading 84.17(1) or Heading 68.01/16(1) of the Customs Tariff Act, 1975? Held that - In view of this categorical finding, there can be no hesitation in holding that the goods in question fall within Heading 84.17(1) of the CTA unless it is shown they being millstones, grindstones and other articles falling within Chapter 68 have to be excluded from Heading 84.17(1) of the CTA in view of Note 1(a) of Chapter 84. Obviously the articles in question are not millstones, grindstones or the like. We have carefully gone through various sub-headings of Chapter 68 of the CTA and we are of the view the contention that the goods in question fall within Chapter 68 has no substance. In view of the finding recorded by the Tribunal that the goods in question constitute a complete unit, an equipment, and are not made only of graphite they are clearly classifiable under Heading 84.17(1) of the CTA find no illegality in the order of the Tribunal. The appeal fails and it is accordingly dismissed with costs.

Summary

Issues: Classification of hydrochloric acid synthesis unit under Heading 84.17(1) or Heading 68.01/16(1) of the Customs Tariff Act, 1975.

Analysis:
1. The appeal questioned the classification of a hydrochloric acid synthesis unit under Heading 84.17(1) or Heading 68.01/16(1) of the Customs Tariff Act, 1975. The dispute arose when the Assistant Collector of Customs rejected the claim of classification under Heading 84.17(1) and classified it under Heading 68.01/16(1). The Collector of Customs (Appeals) later agreed with the respondent's classification under Heading 84.17(1), which was confirmed by the Customs Excise and Gold (Control) Appellate Tribunal (CEGAT). The appellant challenged this decision, leading to the current appeal.

2. The appellant contended that the imported parts were articles of graphite, falling under Heading 68.01/16(1), and not under Heading 84.17(1) as claimed by the respondent. Reference was made to previous judgments to support this argument, emphasizing that spare parts made of carbon were classified under Heading 68.01/16(1) in earlier cases.

3. On the other hand, the respondent argued that machinery and mechanical appliances fell under Heading 84.17(1) of the Customs Tariff Act, citing the title of the relevant chapters to differentiate between articles of stone, plaster, cement, etc., under Chapter 68 and machinery under Chapter 84. The respondent maintained that the goods in question were rightly classified under Heading 84.17(1) by the Collector of Customs (Appeals) and CEGAT.

4. The Court analyzed the definitions and exclusions under Chapter 68 and Chapter 84 of the Customs Tariff Act, emphasizing that machinery and mechanical appliances fell under Chapter 84, while articles of stone, plaster, etc., were covered under Chapter 68. Note 1(a) of Chapter 84 excluded articles falling within Chapter 68 from being classified under Heading 84.17(1).

5. The Tribunal's findings highlighted that the goods constituted a complete unit, forming part of a synthesis unit for producing hydrochloric acid. It was determined that the goods were not millstones or grindstones falling under Chapter 68 but were machinery classified under Heading 84.17(1) due to their composition and function.

6. Previous cases, such as Saurashtra Chemicals and Ballarpur Industries, were referenced to distinguish between spare parts classified under Chapter 68 and machinery parts falling under Chapter 84. The Court concluded that the goods in question, being a complete unit and not solely made of graphite, were correctly classified under Heading 84.17(1) of the Customs Tariff Act.

7. Ultimately, the Court dismissed the appeal, upholding the classification of the hydrochloric acid synthesis unit under Heading 84.17(1) based on its composition, function, and exclusion from Chapter 68. The decision was made after a thorough analysis of relevant legal provisions and precedents.