Customs, Excise and Gold Tribunal - Delhi
Consolidated Petrotech Industries ... vs Collector Of Customs on 11 February, 1992
Equivalent citations: 1993(66)ELT244(TRI-DEL)
ORDER S.V. Maruthi, Member (J)
1. These 3 appeals are disposed of by a common order as the issue involved is common to all the appeals. The case of the appellants is that they have imported 5000 Glass Fibre Filter Bags with 5000 clamps. The said clamps are part and parcel of the Glass Fibre Filter Bags as the bags cannot be used without the clamps. The clamps are packed in separate cartons in order to prevent damage to glass fibre bags during transportation. As the clamps were packed separately the value of it has been shown separately by the supplier. The appellants claimed that the bags could be used only when it is fitted with clamps and therefore, clamps are classifiable under T.I. 70.20 on the ground that they are Glass Fibre (including wool), yarns, fabrics and articles made therefrom. The Assistant Collector classified the clamps under Tariff Heading 73.33/40(2) of the CET on the ground that they are articles of stainless steel. On appeal, the Collector confirmed the order of the Assistant Collector. Hence, the appeal before us. The Collector held that the claim of the appellants that the clamps should be classified as fibre glass bags relying on interpretation of Rule 2(a) of the CTA cannot be accepted as that rule applies only to articles which are in an unfinished and incomplete state but have the essential characteristics of the complete finished articles when they are assembled. In other words, according to him, Rule 2(a) only talks about certain unfinished or incomplete products which on their assembly take complete form of the finished or complete articles. According to him, Rule 3(a) of the Interpretative Rules is relevant which says that heading which provides the most specific description shall be preferred to headings providing a more general description. Therefore, according to him, the clamp being a stainless steel article should be classified under 73.33/40(2) of the Tariff.
2. The contention of Shri Khaitan appearing on behalf of the appellants is that the Glass Fibre Filter Bag cannot be used without the clamp which is of a specific size suitable for the bag and essential for its utilisation. Therefore, it should be classified under 70.20 of the Tariff. In support of his contention, he also relied on an order of this Tribunal in Electrosteel Castings Ltd. v. C.C.E. reported in 1989 (43) E.L.T. 305 and a judgment of the Supreme Court in C.C.E. v. Eastern Paper Industries Ltd. -1989 (43) E.L.T. 204, Shri. Khaitan pointed out that the clamp being a component part of Glass Fibre Filter Bag, it must be regarded as an essential ingredient or part of that Glass Fibre Filter Bags. Therefore, it should be classified under the entry claimed by them.
3. Shri Roy appearing for the Department contended that there is no evidence that the clamps are specially designed for the fibre glass filter bags. Invoice also makes it clear that the clamps are to be separately classified. The clamps are of general purpose. According to him, the judgments relied upon by the appellants are not relevant.
4. The Collector relied on Rule 3(a) of the Interpretative Rules whereas the appellants rely on Rule 2(a) of the said rules. In our view Rule 2(a) is not applicable to the facts of the present case. It: only deals with articles which are incomplete or unfinished should be treated as a complete or finished article provided they have the essential characteristics of the complete or finished article. In the instant case, the Glass Fibre Filter Bags are complete by themselves. Secondly, the clamps are used only for the functional purposes of the Glass Fibre Filter Bags, without which the Glass Fibre Filter Bags cannot be used for any purpose. It is not clear how Rule 2(a) is applicable to the facts of the present case. Admittedly, these clamps are articles of stainless steel. Therefore, Rule 3(a) of the Interpretative Rules appears to be more appropriate which provides that the most specific description shall be preferred to headings providing a more general description. The judgment relied upon by Sh. Khaitan says that a component whose absence will disable a machine or appliance, it must be regarded as an essential ingredient part of that machine. The mere fact that a component or a part is essential part of a particular machine does not determine the classification. The classification is to be decided on the basis of the tariff headings. If there is a specific tariff entry providing specifically for the articles which are imported, then the classification should be governed by the said specific entry. In the absence of specific entry, it may be that a component part which will disable a machine and it may be classified under that tariff item i.e. classifying it under the main headings. If there is a specific entry governing the classification of goods, it is not necessary to refer to another tariff heading. Therefore, the judgments relied upon by Shri Khaitan are not relevant.
5. Admittedly, the clamps are made of stainless steel and articles of stainless steel are classifiable under Heading 73.33/40(2) whereas the Tariff Item 70.20 deals with glass fibre (including wool), yarn fabrics and articles made therefrom. The fact that the glass fibre filter bags falling under T.I. 70.20 become useless or non-functional without clamps and therefore, clamps being component part should be classified under T.I. 70.20 as articles of Glass Fibre is meaningless in view of the specific entry classifying articles of stainless steel. Therefore, we are of the view that the clamps have to be classified under Heading 73.33/40(2) as articles of stainless steel. For the reasons mentioned above, we see no reason to interfere with the orders of the lower authorities. The appeals are accordingly rejected.