Customs, Excise and Gold Tribunal - Delhi
East West Exporters vs Collector Of Customs on 26 July, 1991
Equivalent citations: 1992(39)ECC63, 1991ECR415(TRI.-DELHI), 1992(57)ELT635(TRI-DEL)
ORDER
Harish Chander, Vice President
1. M/s. East West Exporters, 157, St. Patricks Complex, Brigade Road, Bangalore-25, has filed an appeal being aggrieved from the order passed by Collector of Customs (Appeals), Madras.
2. Briefly the facts of the case are that M/s. East West Exporters, Bangalore, had imported Max HD-3R Staplers (Industrial use packaging machine). The same was assessed duty under Heading 84.51/55(1) CTA and under 33(D) CET. The appellant had claimed the assessment before the Assistant Collector under Heading 84.32 with additional duty under Tariff Item 68. The appellant had claimed assessment under this Heading on the basis of appellate decision in C3/514/83 dated 26th March, 1983 passed by the Collector (Appeals) and subsequent assessment of the identical consignments. A notice dated 25th October, 1983 was issued to the appellants to explain their case intimating that the proposal of the Revenue for assessing the stapler type HD-3R under Heading 84.51/55(1) with additional duty under Item 33(D) CET. In their reply dated 2nd November, 1983 the importers stated that they want a speaking order. In the catalogue for type HD-3R it has been mentioned - a new desk type stapler. One-touch open system is used for easy loading of staple. Staple use - Max No. 3(24/6) Stapling capacity - 30 sheets of good quality paper. Possible for use as a tacker with protective base. The Chapter Heading No. 84.32 under which the appellants claimed staplers HD-3R as classifiable reads - "Book binding machinery, including book-sewing machines". The Assistant Collector was of the view that stapling machine was neither a book stitching machine nor a box making machine. The catalogue mentioned the same as desk type stapler suggesting its use in office. The Assistant Collector observed that type HD-3R staplers was of a kind used to fix documents together. It was an office machine within the meaning of Chapter Heading 84.54 CCN corresponding to 84.51/55(1) CTA. It is used by the importers for making card board boxes, i.e., for a purpose not intended or designed will not take it away from Chapter Heading 84.51/55(1) CTA. Being not satisfied from the orders passed by the Assistant Collector, appeals were filed before the Collector (Appeals). The Collector (Appeals) confirmed the findings of the Assistant Collector and had also observed that he had held that the main goods could not be considered as a packing machine and to packing to have the benefit of import under OGL, he had held that the import was not covered under OGL and for classification, he had held that on the basis of the Max catalogue as well as sample inspected, it could not be treated as a machine for making cartons to give the benefit of re-assessment and had held that the classification as office machine, as assessed by the Assistant Collector, was correct and had upheld its findings and had rejected the appellants claim for re-assessment. Being aggrieved from the aforesaid order, the appellant has come in appeal before the Tribunal.
3. Shri K.L. Jain, Partner of the appellant firm, has appeared. He has reiterated the facts. He pleaded that the Revenue had assessed the same under Heading 84.51/55(1) CTA whereas the appellant has claimed the assessment under Heading 84.32. Shri K.L. Jain referred to Smt. Varalaxmi Rajamanickam's order-in-appeal No. C-III/514/83 dated 26th March, 1983, where the Collector (Appeals) had allowed the appeal. He referred to a decision in the case of J.K. Synthetics v. Union of India, reported in 1981 ECR 333-D. He referred to para No. 17. He also referred to the Assistant Collector's order passed in November, 1983 and read page 8 of the Collector (Appeals) order. He pleaded that in case the appellants plea is not accepted, alternatively it may be assessed under Heading No. 82.05. He has pleaded for the acceptance of the appeal.
4. Shri M.K. Sohal, learned JDR, who has appeared on behalf of the respon-dent, relied on the Order-in-Original and the Order-in-Appeal. He referred to the description given under Heading 84.51/55(1) which is office machines, sub-heading other machines "Stapling machines". He referred to the description as given in the invoice as stapling machines. Shri Sohal argued that Heading 84.32 is a generic entry. He argued that the Collector (Appeals) has looked into the matter correctly. He pleaded that when there is a specific entry, there is no question of resorting to a generic entry and the specific entry is 84.51/55(1). Shri Sohal argued that the stapling machines imported cannot be used for books and the design of the machine catalogue are different. He referred to In-terpretary Rule 3(A) which makes it clear that heading which is more specific that heading resorted to. He also referred to Interpretary Rule 3(C). He referred to catalogue HD-3R which appears on page 26 of the paper-book. Shri Sohal pleaded that there is no infirmity in the order passed by the Collector of Customs (Appeals), and as such, the appeal should be dismissed.
5. Shri Jain, in reply, stated that the learned JDR has not advanced any argument for designing. He has again pleaded for the acceptance of the appeal.
6. We have heard both the sides and have gone through the facts & circumstances of the case. For the proper appreciation of the correct position, the description of type HD-3R, as given in the catalogue, is reproduced below :-
HD-3R : A new desk type stapler. One-touch open system is used for
easy loading of staple.
Staple Used : MAX No. 3 (24/6)
Stapling 30 sheets of good quality paper
Capacity :
Possible for use as a lacker with protective base
A simple perusal of the catalogue which appears on page 26 of the paper-book shows that it is a desk type stapler and staples used are Max No. 3(24/6) and the stapling capacity is of 30 sheets of good quality paper and its possible use is as a tacker. The appellants had claimed assessment under Heading 84.32 whereas the Revenue has assessed the same under Heading 84.51/55(1) of CTA. The description, as given in the Headings 84.32 and 84.51/55(1) of CTA is reproduced below :-
84.32 - "Book binding machinery, including book sewing machines."
Relevant extract from the Heading No. 84.51/55(1) of CTA is reproduced below:
84.51/55(1): Typewriters, other than typewriters...; other office machines (for example, hectograph or stencil duplicating machines, dressing machines, coin-sorting machines, coin-counting and wrapping machines, pencil sharpening machines, perforating and stapling machines) (1) Not elsewhere specified 100% A comparative study of both the headings show that Heading 84.32 relates to book binding machinery, including book-sewing machines, whereas relevant Heading 84.51/55(1) deals with other office machines including perforating and stapling machines. We have reproduced above all necessary extract from the catalogue and the extract shows that the stapling capacity is of 30 sheets of good quality paper. Book binding or book-sewing machines normally cannot be for 30 sheets. In addition to 30 sheets, the quality of the paper has to be good quality paper. The authorised representative of the appellant firm, Shri K.L. Jain, had laid greater emphasis on the earlier order passed by the Collector of Appeals dated 26th March, 1983 where she had observed that goods imported fall under Heading 84.32. It is a settled law that the principles of res judicata do not apply to adjudication or assessment proceedings before the Revenue authorities. Hon'ble Mysore High Court in the case of West Coast Paper Mills v. Superintendent, C.E. reported in 1972 Taxation Laws Report 2631 had held as under :-
"It is true that a prior decision concerning the classification of goods for purposes of taxation under the Act does not bind the Department for all times as the adjudication under the Act is not by a court of law but by officers who have to adjudicate in a quasi-judicial manner. But the decision reached in one year is a cogent factor in the determination of a similar question in a following year. That decision being a relevant factor in the determination of the same question at a subsequent period the failure to take into consideration the earlier decision clearly vitiates the subsequent orders. Further, the classification for purposes of rate of duty can be made only by the legislature and not by the taxing authorities. It is not open to the Central Board of Revenue or any of the Central Excise authorities to classify under Item 17(1) the varieties of paper which do not fall under the said classification." [Paras 12, 22] Hon'ble Supreme Court in the case of M.M. Ipoh v. C.I.T. reported in (1968) 67 ITR 106 had held that the doctrine of res judicata does not apply so as to make a decision on a question of fact or law in a proceeding for assessment in one year binding in another year. The assessment and the facts found are conclusive only in the year of assessment; the findings on questions of fact may be good and cogent evidence in subsequent years, when the same question falls to be determined in another year, but they are not binding and conclusive. Relevant extract from the said judgment is reproduced below :-
"The doctrine of res judicata does not apply so as to make a decision on a question of fact or law in a proceeding for assessment in one year binding in another year. The assessment and the facts found are conclusive only in the year of assessment : the findings on questions of fact may be good and cogent evidence in subsequent years, when the same question falls to be determined in another year, but they are not binding and conclusive. The findings recorded by the High Court that in the year 1951-52 there was no association of persons constituted by Meyyappa (I) and Chettiappa for earning income from M.M. Ipoh properties will not in the present case have any effect on the finding of the Tribunal that in the year 1952-53 and the subsequent years such an association existed. It must again be remembered that the association of persons which traded in 1952-53 and the subsequent years was an association different from the association of 1951-52. After the reduction in the shares of Meyyappa (I) and Chettiappa in the "M.M. Ipoh properties" a fresh arrangement for entrustment of the management of the properties to the M.S.M.M. firm was necessary and according to the findings of the Tribunal, Alagammal assented on behalf of Chettiappa to that arrangement."
Shri K.L. Jain, Partner of the appellant firm, had laid great emphasis on the decision of the Supreme Court in the case of J.K. Synthetics v. Union of India reported in 1981 ECR 333-D where the Supreme Court .It is a Delhi High Court Decision Editor had held that Excise authorities could not take a different view without any valid reasons.
Shri M.K. Sohal, learned JDR, has referred to the description given in the invoice as stapling machine. Heading 84.32 is a generic entry, whereas Heading 84.51/55(1) is a specific entry. The design and the specifications of the imported machines clearly show that it cannot be used for book binding. It is a settled law that in classification matters a heading which is more specific should be resorted to. The judgment cited by Shri Jain in the case of J.K. Synthetics v. Union of India reported in 1981 ECR 333-D does not help him.
8. Alternatively the appellant had pleaded for assessment under Heading 82.05 BTN. Resorting to BTN has only persuasive value and in the present matter, we do not find any reason for resorting to BIN.
9. In the result we hold that the goods fall under Heading No. 84.51/55(1). Accordingly, we confirm the findings of the Collector of Customs (Appeals) and dismiss the appeal.