Customs, Excise and Gold Tribunal - Delhi
Kerala Books And Publication Society vs Collector Of Customs on 27 March, 1992
Equivalent citations: 1992(61)ELT686(TRI-DEL)
ORDER S.L. Peeran, Member (J)
1. In both the appeals, common question of law and facts arises. Hence, they are taken up together for disposal as per law.
2. The appellants in C/Appeal No. 1426/91-C imported Rubber blankets with description in the invoice as 'Reeves Vulcan 714 Compressible blankets 38-1/2" x 26-7/16" 3 ply with bars'. They filed bill of entry for classification under Chapter Heading 4008.21 of CET and claimed benefit of Notification No. 192/80 dated 26-9-1980. The same was cleared by the Customs House. However, a short levy demand notice dated 5-6-1990 was issued for reclassification of the item under Heading 4016.19 of C.E.T. for levy of CV duty as the item had end fittings (bars) and is stated to be in ready for fitment condition. The appellants vide their reply dated 4-8-1990, contended that the item is in the form of rectangular rubber sheets. The provisions of the bars at the end does not make it anything other than a rectangular rubber sheet. The bars are provided mainly to protect the ends of the rubber sheets to ensure proper fitment while use in the machine. The description 'rectangular' rubber sheet under Heading 4008 is more specific than 'other articles of vulcanised rubber other than hardened rubber' under Heading 4016; which is a residual one. Therefore, they claimed that the classification under Heading 4008.29 is proper and correct.
3. The Asstt. Collector held that the goods imported are not mere sheets of rectangular shape but are sheets fitted with metal bars at the ends. The Asstt. Collector relied on Note 9 to Chapter 40, C.E.T. which states that the expression 'plates, sheets' apply to 'plates, sheets etc. of regular geometric shape uncut or simply cut to rectangular (including square) shape, whether or not having the character of articles and whether or not printed or otherwise surface-worked but not otherwise cut to shape or further worked and hence rejected their contention. The learned Collector (Appeals) has upheld these findings and has also held that the fact that metal strips are fixed at the 2 edges of the rubber sheets would mean that the rubber sheets have been subjected to a process which can be treated as further work having been carried out on the rubber sheets. Therefore, the classification under Heading 4016 of C.T.A. was upheld.
4. In C/Appeal No. 1663/91-C, the item is described in the bill of entry as 'Rubber blankets' and Spare parts for web offset press. The goods were cleared under Heading 4008.21 of C.E.T. with benefit of Notification No. 192/80 read with No. 110/89. In this case also, a short levy demand notice dated 27-6-1990 for reclassification under Heading 4016.99 of C.E.T. for CV duty @ 15%. Their claim was rejected by both the lower authorities.
5. We have heard Sh. Kunhi Krishnan, learned Consultant for the appellant and Sh. L.N. Murthy learned DR for the Revenue. It is contended by the learned Consultant that the imported item is a special rubber sheet and a counter sheet with an aluminium gripper fixed on it. This aluminium gripper is known as 'V bars or 'Z' bars. The blankets are without fittings. The counter sheet is only to protect the blankets. The aluminium grippers (L Bars) on the rubber blankets are only to protect the edges from, smudging, as precision at the edges are very essential for fixing the blankets to the machine properly for precision printing. It is further contended that the item is simply cut to rectangular shape not further worked and not having the character of an article. Only aluminium grippers are at the edges and there are no fittings and that they have not undergone any manufacture and that there is no transformation into a different commodity. He contended that only if there is a transformation with a different commodity, it amounts to manufacture and it is only then it could be considered as an article of rubber. He relied on the term 'working as appearing at page 1450 of 'Webster Comprehensive' which states 'working' -
"1. Engaged actively in some employment. 2. That works or performs its function; This is a working model. 3. Sufficient for use or action; They formed a working agreement. 4. Relating to or occupied by work: a working day. 5. Throbbing with pain; also twitching ; said especially of the face muscles. 6. Fermenting, as wine - The act or operation of any person or thing that works, in any sense. That part of a mine or quarry where excavation is going on or has gone on".
He drew the analogy of 'wood working' as appearing at page 398 of World Book Encyclopaedia Vol. 17 which states as follows -
"Wood working is the forming and shaping of wood to make useful and decorative objects. It is one of the oldest craft and ranks as a popular hobby and an important industry."
He contended that as there is no 'working' as in 'wood working' the item should not be considered as an article of Rubber. Referring to the words 'otherwise' in Note 9 of Chapter 40, he contended that the term 'otherwise' should be considered as ejusdemgeneris and relied on its interpretation as appearing in the ruling Sakthi Pipes Ltd., Madras v. Collector of Customs, Madras [1990 (47) E.L.T. 675 (Tri.)].
6. Sh. L.N. Murthy, learned DR contended that Note 9 of Chapter 40 of C.E.T. was quite clear and that the fact that metal strips were fixed at the edges of the item would mean that the rubber sheets have been subjected to a process and could be treated as further work being carried out on the rubber sheets and hence the item was no longer a rubber sheet but an article of rubber sheet. He supported the order of the lower authorities.
7. We have carefully considered the submissions made by both the sides and perused the records. Note 9 of Chapter 40 and the competing headings are noted below -
"In Heading Nos. 40.01, 40.02, 40.03, 40.05 and 40.08, the expressions 'plates, sheets and strips' apply only to plates, sheets and strips and to blocks of regular geometric shape, uncut or simply cut to rectangular (including square) shape, whether or not having the character of articles and whether or not printed or otherwise surface-worked, but not otherwise cut to shape or further worked.
________________________________________________________________________________ Heading Sub- Description of goods Rate of duty No. heading ________________________________________________________________________________ 40.08 Plates, blocks, sheets, strip, rods and profile shapes of vulcanised rubber other than hard Rubber Of cellular rubber:
4008.11 Plates, blocks, sheets and strip 60%
4008.19 Other 60%
Of non-cellular rubber:
4008.21 Plates, sheets and strip for resoling or repair- Rs. 12.60 per kg.
ing or retreading rubber tyres
40.16 Other articles of vulcanised rubber other than
hard rubber
Articles of materials of heading No. 40.08
4016.11 Of Cellular rubber 60%
4016.19 Other 15%
Other:
4016.91 Floor coverings and mats, erasers, gaskets, 15%
washers and other seals, inflatable articles"
________________________________________________________________________________
8. The question that arises for our consideration is as to whether the fixing of the aluminium strips at the two edges of the rubber sheet, could be considered as 'further worked' and as a result be excluded under Heading 40.08 as contemplated per Note 9 of Chapter Heading 40. The learned Asstt. Collector has relied on Note 9 of Chapter 40 and has held that as the imported items are fitted with metal bars at the end, they are not mere sheets of rectangular shape and hence would not fall under Heading 4008. The learned Collector has confirmed the said findings and has held that the fact that metal strips are fixed at the two edges of the rubber sheets mean that the rubber sheets have been subjected to a process which could be treated as 'further worked' having been carried out on the rubber sheets and held therefore, to be classifiable under 4016.19 'Other'.
9. As can be seen from the exclusion clause of Note 9 (supra), the expression plates, blocks, sheets, strip cannot apply to those items which are cut to shape and where further work has been carried out. The contention of the importer is that there has been no further work carried on the rectangular rubber sheets and the mere fact that metal strips have been fixed on the edges, cannot be considered as 'cut to shape' or 'further worked' to be excluded from the Heading of 40.08 and that the item would go as an article of vulcanised rubber in general catagory 'Other' falling under Heading 4016.19. As can be seen from the invoice, and the bill of entry, the importer has declared these as rubber blankets and also has declared as spare parts for Web offset press. The clear understanding of the importer is that this item is not a mere rubber sheet in the form of plates, sheets and strips of a geometrical shape but they have been cut to a particular specification and fixed with metal strips for ready to use as rubber blankets for Web offset printing machines. It has been imported as a spare. Therefore, the rubber sheets which have been cut to a specification and fitted with metal strips, has become an article of rubber and the fact that it is being used for a specific purpose in a printing machines, goes with the common understanding of an article. Therefore, the contention of the appellants that the item cannot be considered as an article and that the fitting of the metal strips has not resulted in a process of manufacture, is not acceptable. The common understanding of the article having been imported as a spare part for Web offset printing press is sufficient to consider it as an article. As is very clear from Note 9, Heading 4008 would not cover those plates and sheets which have been cut to a particular shape, meaning thereby, that an article has emerged from such 'cut to shape or further worked'.
10. Sh. Kunhi Krishnan had attempted to draw an analogy from the wood working and had quoted from World Book Encyclopaedia which is extracted above. The classification of the items has to be done as per the chapter note and section note and hence, this analogy would not be appropriate. The aluminium metal strips which have been fixed as end fittings, has been done with a particular purpose. The contention that the bars are provided merely to protect the ends of the rubber sheets to ensure proper fitment while use in the machine, would also indicate that these end fittings have been done to a specification, and without it, the rubber blankets cannot be fixed to the machine properly for precision printing; as admitted by the importer themselves. Therefore, such fittings have to be considered 'further worked' and the items excluded from Heading 4008 as per Note 9 of Chapter 40. As such, to consider the item as a mere rectangular sheet to fall under Heading 40.08 is not proper. There is no merit in these appeals and the same are dismissed.
V.P. Gulati, Member (T)
11. I agree. I would however like to add that the goods imported are for fitment on to the machine. For that purpose the rubber sheets have been prepared to the desired specifications and have been fitted with metal strips making them fit for being used in the Printing machine. The sheets therefore, do not pass muster as being simply cut. As pointed out by learned brother the same have to be considered as having been further worked. Therefore, they fall outside the purview of heading 4008 of Chapter 40.