SOMANY PILKINGTONS LTD Vs. COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) THE Revision Application dated 13 -4 -1981 against order -in -Appeal No. 2023 dated 6 -11 -1980 passed by the Appellate Collector of Customs, Calcutta, has been transferred to the Tribunal for disposal in terms of Sec. 131B(2) of the Customs Act, 1962.

(2.) THE Appellants had imported a Solid/Liquid Separator which was classified under heading 84.59 (1) of the CTA 75, as a general purpose Screening Machine. Duty was paid on 12 -8 -1980. In a letter dated 30 -8 -1980 a claim for re -assessment under heading 84.56 was made to the Asst. Collector on the ground that the Separator is for use in the manufacture of glazed tiles (ceramic making machine) mainly for separating ceramic minerals. They also drew attention to Note 5 to Chapter 84 which stated that a machine which is used for more than one purpose is to be treated as if its principal purpose was its sole purpose. They also relied on the Explanatory Notes to the CCCN under heading 84.56 relating to machinery of a kind used mainly in the extractive industry for separating etc. of solid mineral products and also machines combining two or more of the functions in question. They also contended that certain machines normally used for treatment of mineral products can, as a secondary use, also treat non -mineral products and the Separator has been imported for use exclusively for the treatment of ceramic minerals. It was, however, held that the catalogue showed that the Separator is a screening machine for separating wet and dry materials for hundreds of applications throughout scores of industries including food products, sugar, fertilisers, foods refractories, abbrasives, chemicals, minerals etc. The purpose of the machine is essentially for separation of materials and does no other function. Thus it is a general purpose mechanical appliance and it is immaterial, for purposes of classification, that it would be used for the manufacture of glazed tiles. Further, Heading 84.56 covers machinery, used mainly in the extractive industries of solid mineral products (in general, the products of Sec. 5 of CCCN) and it is clear from the catalogue that It is neither so designed, nor does it handle only mineral substance. Since the machine is not covered specifically by any other heading it is correctly classifiable under heading 84.59(1). The claim tinction between the design of the Screening Machine and the use to which it was going to be put by the Appellants. He held that the machine is not designed for dealing with only minerals and in fact, the catalogue indicates extensive possible use with non -minerals and cannot be covered by heading 84.56. He also found that the machine has been designed so that no particular purpose of usage can be described as its principal purpose. He, therefore, declined to interfere with the order appealed against.

(3.) IN the present appeal it is stated that the Rotex Automatic Tensioning Model Screener imported from the manufacturers is described in the invoice as "202'A' AL/MS Solid/Liquid Separator fitted with 1 -29" X 68" -80M X 39 SWG, l - -29'x 59" -150M X43 SWG complete with Vee Rope drive Guard, pulleys, M/s. Motor Base Place, 1.1/2 H.P. 1440 RPM TEFC Motor 380 Volts, 3 phase 50 cycles" and the invoice also show BTN Heading 84.56. The machine value at Rs. 1,23,672/ - was for screening/ separating ceramic materials (mineral substances) for the manufacture of glazed tiles and is covered by a valid import licence after satisfying the import authorities regarding its actual use. It is a machine in the flow line of the manufacturing unit and has an essential stage in the production of the end product. Heading 84.56 reads as "Machinery for sorting, screening, separating, washing, crushing, grinding or mixing earths, stones, ores or other mineral substances..". The Assessing Appraiser applied heading 84.59(2). This heading reads..84.51 "Machine and mechanical appliances having individual functions, not falling in other heading of this Chapter (1) not elsewhere specified, (2) designed for the production of the commodity etc. The Customs authorities, however, applied heading 84.59 (1) as they were of the opinion that, according to the catalogue and design, the machine is a general purpose one dealing with diverse materials as food products, fertiliser, grain, chemicals, ores, minerals etc. However, it will be seen from the catalogue that different models of screeners are made and each has particular specifications and applications. There is also an instruction for buyers to select the specific type required and that these are self -contained production Screening machines, and general purpose screeners are given in a separate catalogue. If all the models were suitable for all the advertised applications, there was no need for different models. The finding of the Appellate Collector that the machine is a general purpose machine is basically wrong and entirely erroneous. It is further contended that each machine becomes specific when fitted with a particular screen with other relevant factors as given in the catalogue. Thus the grain Screeners cannot be used for mineral substances and vice -versa, unless the minor and unintended uses are also considered. This is borne out by the Explanatory Note in the BTN to Heading 84.56, where certain machines for production of mineral products can also treat non -mineral products, for example, wood or bone, as a secondary use to what still remains within this heading. Moreover, heading 84.56 suffers from vagueness as it covers only few specified Screeners. A Screening machine cannot be designed only for particular application as a basic Screener (without screen) may be versatile in application. Since the heading covers only a few specified Screeners it must be understood that it is in reference to Screeners complete with specific fittings for application enumerated in the heading. If this view is not accepted, no Screening machines will be covered by the heading and the onus of proving the contrary would fall on the Department. It is further argued that Heading 84.59(1) has no relevance at all, and (sic) heading 84.59 has, it should be sub -item (1), since it is a production type screener as would be amply clear from the catalogue. The Supreme Court has held that the Customs Tariff Act and the C.E.T. are cognate legislation and the word "manufacture" is defined in Sec. 2(f) of the latter Act. The Calcutta High Court has held that each process that results in the transformation of raw material into a new and distinct article amounts to manufacture. Since production of glazed tiles is impossible without this Screening Machine, it is a part of the composite system for production of the end product and if Heading 84.59 has to be applied sub -item (1) is uncalled for. The appellants pleaded that they have always claimed assessment under heading 84.56 and the lower authorities were biased in favour of 84.59(1) due to superficial considerations of the various applications shown in the catalogue and have failed to discharge their quasi -judicial function by acting in an arbitrary, biased, erroneous manner against the principles of natural justice. They therefore, request that the order be quashed, the goods be classified under 84.56 or alternatively 84.59(2) and consequential refund be granted.