K.L. Rekhi, Member (T)

1. A common issue is involved in both these appeals. They relate to the same appellants and were argued before us together. This common order is passed to dispose of both of them.

2. The appellants imported 70/30 Copper-Nickel Tubes for fittings to heat exchangers installed in their petroleum refinery. Heading 84.17 of the Customs Tariff Act, 1975 relates, inter alia, to heat exchangers and condensers. The appellants seek re-assessment of the imported tubes under this heading on the ground that the goods were sophisticated tubes conforming to ASTM B 111-71-C and B.S. 1464-1957-CN 107, they were exclusively designed for use in heat exchange system in their refinery and had been imported under their Actual User Licence for "refinery equipment and spares". They also relied on Note 1 (f) to Section XV of the Customs Tariff Act, which excludes articles falling within Section XVI (machinery, mechanical appliances and electrical goods) from the scope of Section XV. The stand of the lower authorities has been that the imported tubes were "parts of general use" and thus stood excluded from Section XVI, vide Note 2 to Section XV and Note Kg) to Section XVI. This ground, however, was given up by the learned representative of the department before us. Instead, he put-forth a new ground saying that the heading No. 75.94/06 (other articles of nickel) was more specific to cover the goods and that the tubes, as imported, were in straight length and were not identifiable as spare parts of any machinery. It was the common ground of both sides that even though the subject tubes were made of an alloy containing 30% nickel and 70% copper, yet they would be treated as 'nickel tubes' by virtue of Note 3(a) in Section XV, which laid down that an alloy of base metals containing more than 10%, by weight, of nickel was to be classified as an alloy of nickel, except in the case of an alloy in which iron predominated by weight over each of the other metals.

3. We have carefully considered the matter. According to the details furnished in the import documents, the goods were 70/30 Copper-Nickel tubes in two sizes-(1) 3/4" SWG 16 Length 192" and (2) 3/4" O.D X16 SWGX240" Long. The size specifications suggest that these were straight length tubes, made of base metal. By their looks, one could hardly associate them with particular machinery components. The appellants were at pains to convince us that the goods were machinery parts by virtue of their special physical standards and chemical composition conforming to ASTM and BSS to make them suitable for fitment in refinery heat exchangers. Even assuming that it were so, it does not necessarily follow that the goods will fall under heading 84.17 for classification. There is no universal rule in the Customs Tariff Act, 1975 to the effect that all spare parts would necessarily fall in the machinery chapter only. Indeed, it is deliberate scheme of the Tariff that spare parts made of certain materials should be classified in the respective material composition heading rather than in the machinery heading. This scheme is created by a number of Section Notes and Chapter Notes which are a part and parcel of the statutory Tariff and which limit or expand the scope of the tariff headings themselves. Then there are the Interpretative Rules, the sort of ground rules for classification, which are also statutory. Coming to the heading 84.17 canvassed by the appellants, we observe that it is specific, inter alia, for heat exchangers and condensers , that is for the complete machines or systems. It is not specific for parts of those machines and systems. If the parts are such as have a more appropriate or specific heading elsewhere, there is no reason why they should not be classified under the latter heading. Interpretative Rule 3(a) says so. Within the Machinery Section XVI , Note 2(a) also says so.

4. The material composition heading 75.04/06-"other articles of nickel" invoked by the department does