IMPORTANT POINT
Hydrochloric acid synthesis unit of combustion chamber is classifiable under Heading 84.17(1) and not under Heading 68.01/16(1) of the Customs Tariff Act.

Headnote:Customs Tariff Act, 1975-Heading 84.17(1) -Hydrochloric acid synthesis unit of combustion chambers-Department s plea that above article classifiable under Heading 68.01/16(1)-Not tenable-What is brought under Chapter 68 are articles of stone, plaster, cement, asbestos, mica or similar material-There is no scope to bring within that chapter machinery and mechanical appliances and parts thereof-Though combustion chamber of goods in question is made of graphite they constitute complete unit-Hydrochloric acid synthesis unit of combustion chambers is classifiable under Heading 84.17(1).
       Held : A perusal of the title of Chapter 68 of the CTA and the description of the sub-heading shows that what is brought in thereunder are articles of stone, plaster, cement, asbestos, mica or similar materials. There is no scope to bring within that Chapter machinery and mechanical appliances and parts thereof. (Para 6)
       The title of Chapter 84 of the CTA leaves no room for doubt that the goods falling within it are boilers, machinery and mechanical appliances and parts thereof. The description and the sub-headings enumerate various categories of machinery and appliances falling thereunder. At the beginning of the Chapter are Notes which specify what articles are excluded from that Chapter. There can be no controversy about the proposition that if the goods in question are machinery, plant and similar laboratory equipment or parts thereof, they fall within Chapter 84 of the CTA; but if they are millstones, grindstones or other articles that fall within Chapter 68 of the CTA, they get excluded from chapter 84. (Paras 7 & 9)
       A perusal of the order of the Tribunal shows that though the combustion chamber of the goods in question is made of graphite, they constitute a complete unit, consisting of three parts fitted with burners and other accessories forming part of synthesis unit of caustic soda plant and thus an equipment. In that equipment hydrogen is but with chlorine and thereby a new product-hydrochloric acid-is produced. 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 . (Paras 10, 11 & 14)

JUDGMENT

Syed Shah Mohammed Quadri, J.- The short question that arises in this appeal is: 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.

2. The appeal came up before us on reference by a Bench of two learned judges, taking the view that the decision of this Court in Ballarpur Industries Ltd. v. Collector of Customs, Madras1, holding that a part of paper finishing machinery was classifiable under Heading 84.31 of Customs Tariff Act, 1975 (for short, the CTA ) and not under Heading 68.01/16(1) of the CTA, is seemingly different from what is stated in Saurashtra Chemicals v. Collector of Customs2.

3. The facts giving rise to this appeal fall in a short compass. The respondent imported four cases of hydrochloric acid synthesis unit of combustion chambers and claimed that they are classifiable under Heading 84.17(1) of the CTA. By order dated October 7, 1982, the Assistant Collector of Customs, Bombay, rejected the claim and classified them under Heading 68.01/16(1) of the CTA. The Collector of Customs [Appeals], Bombay, acceded to the contention of the respondent for their classification under Heading 84.17(1) of the CTA. The appellant appealed before the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi (for short, the CEGAT ). On November 11, 1991, the CEGAT confirmed the order of the Collector of Customs (Appeals) and dismissed the appeal. The appellant challenges the order of the CEGAT in this appeal.

4. Mr. N.K. Bajpai, learned counsel appearing for the appellant, has contended that the respondent imported parts of machinery which are articles of graphite falling within Heading 68.01/16(1) of the CTA and as Note 1(a) of Chapter 84 of the CTA specifically excluded articles falling within Chapter 68 of the CTA, they were wrongly held to be classifiable under Heading 84.17(1) of the CTA. He submitted that in Saurashtra Chemicals, Porabandar v. Collector of Customs, Bombay3, the larger Bench of the Tribunal by majority held that the spare parts of the machinery made of carbon were classifiable under Heading 68.01/16 of the CTA which was approved by this Court in Saurashtra Chemicals v. Collector of Customs (supra). Therefore, the order under appeal has to be set aside.

5. In support of the order under appeal, Mr. Joseph Vellappally, learned senior counsel appearing for the respondent, drew our attention to title of Chapters 68 and 84 of the CTA to point out that plants and machinery fell within Heading 84.17(1) of the CTA and not within Heading 68.01/16(1) of the CTA. According to the learned counsel, Note 1(a) to Chapter 84 of the CTA has no application to machinery or part of machinery covered by Heading 84.17(1) of the CTA. As such the Collector of Customs (Appeals) as well as the CEGET rightly classified the goods under Heading 84.17(1) of the CTA.

6. Inasmuch as the controversy relates to the interpretation of Headings 68.01/16(1) and 84.17(1) of the CTA, it would be useful to quote them here :

"CHAPTER 68

ARTICLES OF STONE, OF PLASTER, OF CEMENT, OF ASBESTOS, OF MICA AND OF SIMILAR MATERIALS

NOTES

This Chapter does not cover :

(a) to (n) *** *** ***

Heading Sub-heading No. and description Standard Rate Central Excise No. of article of duty Tariff Item

68.01/16 Articles of natural or artificial stone, of 22F, 23C, 51

agglomerated natural or artificial abrasives, of plastering material, of cement, of concrete, of asbestos, of asbestos-cement or cellulose fibre cement, or of mica; articles of vegetable materials agglomerated with mineral binders; mineral wools; expanded mineral materials; articles of other mineral substances, not elsewhere specified or included :

(1) Not elsewhere specified 100%

(2) Grindi

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2000 Supreme(SC) 1033

IMPORTANT POINTHydrochloric acid synthesis unit of combustion chamber is classifiable under Heading 84.17(1) and not under Heading 68.01/16(1) of the Customs Tariff Act.

Cases Referred (3)

IMPORTANT POINT
Hydrochloric acid synthesis unit of combustion chamber is classifiable under Heading 84.17(1) and not under Heading 68.01/16(1) of the Customs Tariff Act.