1. Dispute regarding the classification of PVC impregnated cotton conveyor belting under the Central Excise Tariff Act. (Para 1 )
Back
Next 
1995 Supreme(SC) 460
SUPREME COURT OF INDIA
A.M. AHMADI, C.J.I. AND S.P. BHARUCHA AND K.S.PARIPOORNAN, JJ.
FENNER (INDIA) LTD.
Versus
COLLECTOR OF CENTRAL EXCISE, MADURAI
Civil Appeals No. 4600 of 1989 with No. 4421 of 1989
Decided on 28-3-1995
Advocates appeared:
Lakshmi Kumaran, V. Balachandran, R.N. Banerjee, R.N. Karanjawala, P.K. Mullick, Bhaskar Pradhan and Ms M. Karanjawala, Advocates, for the Appellant;
M. Gowri Sankaramurty, P. Narasimhan and V.K. Verma, Advocates, for the Respondent.
Advocates:
BHASKAR PRADHAN, LAKSHMI KUMARAN, M.GOURI SHANKAR MURTHY, M.KARANJAVALA, P.K.MULLICK, P.Narasimhan, R.N.BANERJEE, R.N.KARANJAWALA, V.BALACHANDRAN, V.K.VARMA
BHASKAR PRADHAN, LAKSHMI KUMARAN, M.GOURI SHANKAR MURTHY, M.KARANJAVALA, P.K.MULLICK, P.Narasimhan, R.N.BANERJEE, R.N.KARANJAWALA, V.BALACHANDRAN, V.K.VARMA
Important Points
Classification of goods under the Tariff Schedule is determined by the terms of the headings and relative section or chapter notes. Specific chapter notes designating conveyor belts under Heading 39.22 prevail over general dictionary definitions of terms like 'strip' used for classification.
Subject
Tax Law - Central Excise
Act Referred
CENTRAL EXCISE ACT: S.35(l)
Headnote
Central Excise Tariff Act, 1985 - Tariff Entries - Rigid Or Flexible Strips - Each of two appellants manufactures PVC impregnated cotton conveyor belting and PVC impregnated flame resistant colliery conveyor belting - Appellants contended before Tribunal that their products were classifiable under Tariff Entry 3922.90, whereas it was case of Excise authorities that they were classifiable under Tariff Entries 3920.11 or 3920.12, depending upon whether they were rigid or flexible strips – Held, Tariff Heading 39.26 must, therefore, be read as applicable to appellants conveyor belts - For later period, Explanatory Note to Tariff Heading 39.26 in Harmonised Coding System, which is identical to Tariff Heading 39.26 of Tariff Schedule, must be taken to be a guide, for Tariff Schedule is based upon Harmonised Coding System - That apart, we are unable to uphold Tribunals finding that belting made by appellants is a strip - An article which is over 100 m but only up to 1200 mm in width cannot be described as a strip - Respondents are directed to classify appellants conveyor belts under Tariff Heading 39.22.90 for period December 1986 and under Tariff Heading 39.26.90 for period to June 1987 – Appeal Allowed.
Legal Category Hierarchy
Table of Contents
2. Appellants claimed classification under Tariff Entry 3922.90/3926.90, while Excise authorities argued for Tariff Entries 3920.11/3920.12 or Tariff Heading 59.08. (Para 1 , 8 , 9 )
3. The court observed that specific Chapter Notes include conveyor belts under Heading 39.22 and that the product's dimensions do not satisfy the dictionary definition of a strip. (Para 14 )
4. Classification shall be determined according to the terms of the headings and relative section or chapter notes, which prevail over general dictionary meanings. (Para 4 , 14 )
5. Appeals allowed; conveyor belts classified under Tariff Heading 39.22.90 for the first period and 39.26.90 for the second period. (Para 15 )
6. How is the classification of goods determined under the Central Excise Tariff Act?
Classification is determined according to the terms of the headings and any relative section or chapter notes. If these do not otherwise require, the general rules of interpretation are applied. (Para 4 , 14 )
7. Does a general dictionary meaning of a term override specific Chapter Notes in a Tariff Schedule?
No. The court held that classification must be determined by the terms of the headings and relative section or chapter notes, which take precedence over general dictionary meanings. (Para 14 )
8. Can the Excise authorities change the proposed classification of a product during the appellate process if a previous commitment was made?
No. If the authorities have stated before a court that they would classify a product under a specific entry and the court acted on that statement, they cannot later urge a different classification. (Para 10 , 11 , 12 )
JUDGMENT
BHARUCHA, J.-
These appeals impugn the order dated 14-9-1989, passed by the Customs, Excise and Gold (Control) Appellate Tribunal dismissing the appeals filed before it by the two appellants. Each of the two appellants manufactures PVC impregnated cotton conveyor belting and PVC impregnated flame resistant colliery conveyor belting. The appellants contended before the Tribunal that their products were classifiable under Tariff Entry 3922.90, whereas it was the case of the Excise authorities that they were classifiable under Tariff Entries 3920.11 or 3920.12, depending upon whether they were rigid or flexible strips. The Tribunal upheld the contentions of the Excise authorities basing itself, in the main, upon the dictionary meaning of strip and upon the judgment of this Court in Geep Flashlight Industries Ltd. v. Union of India (1985)22 ELT 3 (SC).
2. We are concerned in these appeals for the period December 1986 to June 1987.
3. With effect from 28-2-198.6 and up to 9-2-1987, Tariff Heading 39.20 (so far as is relevant) read thus :
"39.20
Other plates, sheets, film, foil and strip, of plastics, non-cellular, whether lacquered or matallised or laminated, supported or similaraly combined with other materials or not
-Of polymers of vinyl chloride :
3920.11
-Rigid plates, sheets, film, foil and strip
60%
3920.12
-Flexible plates, sheets, film, foil and strip
60%
Tariff Heading 39.22 read thus :
"39.22
Other articles of plastics and articles of materials of Headings Nos. 39.01 to 39.14
3922.10
-Articles of ployurethane foam
75%
3922.90
-Other
30%
4. It is relevant to mention that the Central Excise Tariff Act, 1985, itself contains rules for the interpretation of the tariff schedule. Rule 1 states : "The titles of sections and chapters are provided for ease of reference only; for legal purposes classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided such headings or notes do not otherwise require, according to the provisions hereinafter contained." Rule 2(a) states that any reference in a heading to goods shall be taken to include a reference to those goods incomplete or unfinished, provided that the incomplete or unfinished goods have the essential character of the complete or finished goods. Rule 3 states that when goods are prima facie classifiable under two or more headings, classification will be effected thus - the heading which provides the most specific description shall be preferred to headings providing a more general description. Also, when goods cannot be classified by reference to sub-rules (a) or (b) of Rule 3, they shall be classified under the heading which occurs last in the numerical order among those which equally merit consideration. Rule 4 states that goods which cannot be classified in accordance with Rules 1 to 3 shall be classified under the heading appropriate to the goods to which they are most akin. Chapter 39 is entitled "Plastics and articles thereof and Note 11 therein states that Heading No. 39.22 applies, inter alia, to "(k) Transmission, conveyor or elevator belts, endless, or cut-to-length and joined end to end, or fitted with fasteners".
5. Subsequent to 10-2-1987 Tariff Heading 39.22 became Tariff Heading 39.26; it read :
"39.26
Other articles of plastics and articles
of other materials of Headings Nos.
39.01 to 39.14
3926.10
-Of polyurethane foam
60% plus Rs 40 per kg
3926.90
-Other
30%"
Note 11 (k) was omitted. Reference was made by Mr V. Lakshmi Kumaran, learned counsel for the appellants, to the Customs Cooperation Councils publication of the Explanatory Notes to the Harmonized Commodity Description and Coding System which is adopted in the Tariff Schedule. The Explanatory Note with reference to Tariff Heading 39.26 of the Harmonised Coding System states that it covered "articles, not elsewhere specified or included, of plastics ... or of other materials of Headings 39.01 to 39.14" and included "(7) Transmission, conveyor or elev
