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TMI Blog1992 (5) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... the light of Chapter Note 10 of Chapter 39 CTA '75 and the corresponding Explanatory Note to HSN that the discs imported which are in circular form are more appropriately classifiable as articles of plastic under Heading 39.20 CTA and not as sheets under Heading 39.20 or 39.21 CTA and that the exemption under Notification 226/76 which is available to C.N. sheets cannot be extended to the discs imported. Hence the present appeal. 2. Shri Iqbal I. Khatri authorised representative appearing for the appellants submitted that C.N. Sheet in disc form is not an article ready for use as no consumer can use it directly as an article of plastic. He also relied upon the Delhi High Court decision in the case of Super Traders v. Union of India 1983 (12) E.L.T. 258 wherein the Court held that stainless steel sheets in the form of circles are stainless steel sheets only. He further urged that similar goods were allowed clearance in the past under Notification 226/76 and that this general practice has been unlawfully changed without notice. The appellants also assailed the legality of the impunged order on the ground that the Addl. Collector had on 28-7-1989 already assessed the goods extending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o not fall under 39.20 CTA cannot be held to be eligible for the exemption. The Customs Tariff Act since 1985 has been aligned to the Harmonised System of Nomenclature (HSN) and as such it is now well settled that the Explanatory Notes to HSN do have a persuasive value though not statutory force. It is seen that the Additional Collector has considered HSN Explanatory Notes which indicate that sheets cut into shape other than rectangular are inter alia classifiable under Heading 39.26 which would appear to be well founded when it is seen that Heading 39.26 covers inter alia articles made of Cellulose nitrate falling under Heading 39.12. It is also observed that reliance on the Delhi High Court judgment in the case of Super Traders may not advance the appellants' case because firstly the Court in that case was interpreting the erstwhile Tariff Schedule based on Customs Co-operative Council Nomenclature (CCCN) which has since been replaced by the Harmonised System of Nomenclature, secondly it was with reference to a different chapter relating to stainless steel and not plastics with which we are concerned in the present case, and thirdly the Court was interpreting Chapter Note 1(n) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he proceedings and resulting in passing of the impugned order denying the exemption to the imported Cellulose nitrate sheet in discs shapes but granting it only to C.N. Sheet in circle shape. 5. The question that arises for consideration is as to whether C.N. sheet in disc shape and in circular form is an article of plastic falling under heading 3926.90 of Customs Tariff Act, 1975 or they are sheets falling under Heading 39.20 or 39.21 Customs Tariff Act and entitling for exemption under Notification No. 226/76-Cus., dated 2-8-1976? The Tariff Heading 39.20 of Customs Tariff Act and Note 10 to Chapter 39 have already been extracted in the main order. The learned Additional Collector in the impugned order has concluded after noting Chapter Note 10 of Chapter 39 of the Customs Tariff and HSN Note at page 554, 572 and 573 that the discs which are in circular form are more appropriately classifiable as article of plastic under heading 39.26 and benefit of exemption under Notification No. 227/76-Cus. available to C.N. sheets cannot be extended to C.N. Discs. He has also not accepted the Chief Controller of Imports & Exports, New Delhi's classification dated 10-8-1989 cited by the impor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under which the petitioner's imports could be covered would be the residuary one i.e. 73.15(1) i.e. not elsewhere specified. The respondent's plea however, is that circle is nothing else but 'sheet' which is specifically mentioned in 73.15(2) and, therefore, it would be covered by sub-heading (2). We agree with the interpretation given by the respondents. Reference in this connection be made to clause (n) of Chapter 73 of the Schedule to the 1975 Act, which defines sheets, plates in heading inter alia to sheets or plates which have been cut to non-rectangular shape perforated...(emphasis supplied). Now Heading 73.15 requires two things, namely (a) that goods must be of alloy steel, stainless; (b) they must be in the form mentioned in Headings 73.06/7 to 73.14. Admittedly the goods of the petitioner are of stainless steel. 73.13 deals with sheets and plates of iron and steel. But sheets in terms of clause (n) of Note-1 of Chapter 73 is to be taken to apply to sheets which have been cut to non-rectangular shape. The petitioner is importing stainless steel circle which really means sheet cut to non-rectangular shape. So there does not seem to be any justification to say as to why sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the Brussels Tariff Nomenclature, though some of the individual headings have been merged or sub-divided to accord with the pattern of Indian import trade. The entries in the Schedule are common because without it international trade would suffer serious problems in being able to tax and identify various articles. As a matter of fact many a article bear lower rates of duty by virtue of General Agreement on Tariff and Trade (GATT). In that context the fact that international customs opinion describe sheets and plates under 73.15 to include sheets cut to circular shape would be a very strong reason not to interfere with the findings of the authorities under the Customs Act which have taken the view that stainless sheets would include stainless steel circles also. 6. Mr. Sen urged that whenever the legislature wanted to include circles under any heading it say so specifically and refers us to Items 27 and 26A of the First Schedule of the Central Excises and Salt Act, 1944. Item No. 27 of Aluminium under clause (b) contains the description of manufacture of plates, sheets, circles mentioned separately. Similarly, Item No. 26A dealing with copper and copper alloys contains the desc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risen : "Whether cellulose nitrate discs imported in this case are classifiable under Heading 39.20 CTA, 1975 as sheets and whether the exemption under Notification 226/76 will be applicable thereto, or whether the goods are classifiable under Heading 39.26 as articles of plastics and as such ineligible for exemption." The point of difference is referred to the President in terms of Section 129C(5) of Customs Act, 1962. 9. [Order per : S.K. Bhatnagar, Vice President]. - This matter has been referred to me by the Hon'ble President in view of the difference of opinion between Hon'ble Member (Technical) and Hon'ble Member (Judicial) on the following point, "Whether cellulose nitrate discs imported in this case are classifiable under Heading 39.20 CTA, 1975 as sheets and whether the exemption under Notification 226/76 will be applicable thereto, or whether the goods are classifiable under Heading 39.26 as articles of plastics and as such ineligible for exemption." 10. I have thereupon heard the appellant and the respondent and also gone through the orders passed by my two learned colleagues. 11. During the course of hearing both the appellants and respondents have reiterated thei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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