INDIAN ORGANIC CHEMICALS Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THIS appeal arises from Order -in -Appeal No. M. Cus. 799/95, dated 5 -5 -95. The appellants have imported thread guides and in the Bill of Entry, they claimed the item to be made of plastic. Therefore, it was assessed as parts of plastics under Chapter sub -heading 3926.90. Later, they filed a refund claim seeking the item to be parts of textile machinery classifiable under chapter sub -heading 8448.20. The Asstt. Collector in the Order -in -Original noticed that they had not proved convincingly that the items are parts of machines classifiable under Heading 8445 of CTA. He also noted that they had indicated in the Bill of Entry that the imported goods are of plastic and hence, upheld the classification done in the Bill of Entry. Before the Commissioner (Appeals), they produced the evidence to show that the item thread guide was made of "ceramics" and not plastics and hence, the item cannot be classified under Chapter 39 and since, it was a part of textile machinery, it should be classified under the respective heading under Chapter 84.

(2.) AFTER due scrutiny of the material on record, the Commissioner accepted their contention that the item is made of ceramics. However, on examination of the Note (1)(c) of Section XVI (which pertains to both the Chapters 84 and 85), he noticed that it excludes "Bobbins, spools, cops, cones, reels or similar supports, of any material (for example, Chapters 39, 40, 44 or 48 or Section XV). He noted that thread guides can be considered as a support for yarns and threads and, therefore, held it to be excluded from the scope of Section XVI. He noticed the Harmonised Tariff which includes thread guides for textile machinery under Heading 69.09 and Chapter 69 covers ceramic products. He has noted that it is the case of the appellant that the impugned thread guides were made of ceramic. In that view of the fact, he held that there is no room for doubt that the impugned thread guides made of ceramic and used for textile machinery, were correctly classifiable under Heading 69.09 (6909.90) with rate of duty at 85%. He has clearly noted that although the rate of duty was collected under sub -heading 3926.90, but CVD was paid by the appellant at 30% under Heading 3926.90, whereas CVD was payable at 35% under sub -heading 6909.90. He has noted that at the appeal stage, no action can be taken for recovery of the said higher CVD. In view of determining the correct classification of the goods, he directed the Custom House to classify thread guides made of ceramics correctly in future.

(3.) LD . Counsel Shri R. Raghavan contests this finding and submits that the appellate Commissioner was not right in reclassifying their product without notice to the party when the classification adopted in the Bill of Entry has not been challenged by the Revenue. He submits that the Bombay Bench in the case of Brooke Bond Lipton India Ltd. v. CCE, Mumbai - 2001 (127) E.L.T. 569 (Tri. -Mum.) has held that the classification proposed by the department before the Commissioner (Appeals) not the one proposed in the corrigendum to notice replacing the heading and as such the order is not maintainable. He submits that the item is required to be treated only as parts of textile machinery for classification under chapter 84 and its exclusion in the light of Note (1)(c) of Section XVI. He also points out that the Heading 69.09 refers to ceramic wares for laboratory, chemical or other technical uses and therefore, that heading is not proper.