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Pigments and Dyestuffs Ltd. Vs. Collector of Customs - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1989)(43)ELT511TriDel
AppellantPigments and Dyestuffs Ltd.
RespondentCollector of Customs
Excerpt:
.....at 10%. he confirmed the demand already issued. then the appeal was preferred to the collector of customs (appeals) who held, on a reference to text books and chemical dictionary, that the classification of the product under item 65 c.e.t. was proper.2. the other appeal relates to a similar import. the collector of customs in appeal passed orders on 19-3-1983 holding that the possibility of the material being used as rubber anti-oxidant could not be ruled out. the appeal was rejected.3. mr. sogani, the learned consultant appearing for the appellants, submitted that predominant use of the goods must be considered. he relied on the decision reported in 1983 elt 2483. he stated that even though the possibility of the goods being used for other purposes could not be ruled out, the.....
Judgment:
1. Appeal No. 963/81 has been filed against the order of the Collector of Customs, Bombay dated 19-3-1981. Appeal No. 1372/83 has been filed against the order of the Collector of Customs, Bombay dated 16-3-1983.

As common questions of fact and law are involved, both the appeals were heard together. In Appeal No. 963/81, appellants imported Phenyl Alpha Napthylamine during 1974 under Bill of Entry No. 976/84 dated 4.11.1974 and the consignment was released under ex-bond Bill of Entry Cash No.1108 and 1109 dated 10-1-1978. The Customs authorities assessed the goods under Item No. 281.C.T. charging customs duty at 60% + 15%. The goods were cleared in early January, 1978. On 16-5-1978, the Asstt.

Collector of Customs, Gr.(V) issued a 'less-charge' memo directing the appellants to pay Rs. 16,068.65 towards duty short-levied erroneously.

The appellants submitted the reply on 20-5-1978, informing the Deptt.

that the item imported by them was Dye-intermediate used in the manufacture of Basic Dyes viz. Victoria Blue, Colour Index No. 44045 with the Hue No. Basic Blue 26. The Assistant Collector ultimately passed an order on 23-9-1980 rejecting the contentions of the appellants. The Assistant Collector held that the item Phenyl Alpha Napthylamine was being used very commonly as Rubber and oxidant as a compounding ingredient in rubber and chargeable to Countervailing Customs duty (C.V.D.) under C.E.T. 65 item at 10%. He confirmed the demand already issued. Then the appeal was preferred to the Collector of Customs (Appeals) who held, on a reference to text books and Chemical Dictionary, that the Classification of the product under Item 65 C.E.T. was proper.

2. The other appeal relates to a similar import. The Collector of Customs in appeal passed orders on 19-3-1983 holding that the possibility of the material being used as Rubber Anti-oxidant could not be ruled out. The appeal was rejected.

3. Mr. Sogani, the learned Consultant appearing for the appellants, submitted that predominant use of the goods must be considered. He relied on the decision reported in 1983 ELT 2483. He stated that even though the possibility of the goods being used for other purposes could not be ruled out, the predominant user of the goods should be the basis in order to classify the item. He placed reliance on the Colour Index published by the Society of American Colourists and Dyers, and pointed out that this item is mainly used for the manufacture of dyes.

According to him, the Tariff Entry did not contemplate any 'end-use'.

The Deptt. has also not given adequate proof of the predominant use of the goods. He argued that the product could not be assessed under Item 65, but, only under Item 68 C.E.T. He urged that in view of the enormous delay, the appellants could not avail themselves of the benefit of proforma credit of the c.v.d. which otherwise they could have availed of.

4. Mr. Sunder Rajan, the J.D.R., pointed out that the general purpose of the anti-oxidant should be taken into consideration. According to him, when the Entry was specific reliance could not be placed on Tariff Entry 68. He placed reliance on 1983 ELT 1566; 1983 ELT 17 . He also stated that an appeal has been filed against the ruling reported in 1983 ELT 2483. The J.D.R. urged that when there is specific entry, question of predominant use had no relevance.

5. The facts of the present case are not disputed. The appellants have imported Phenyl Alpha Napthylamine which is derived from alpha-napthylamine and aniline, and purified by distillation. It is a chemical used in dyes. It is also a 'rubber-antioxidant'. With these facts in mind, we may examine the relevant Tariff Entry which is as follows:- The learned Counsel relied on 'Condensed Chemical Dictionary' wherein in respect of phenyl-alpha-naphthylamine the uses are set out as follows:- The learned counsel tor the appellants argued that the predominant use of the goods should be taken into consideration. Item No. 65 refers to 'rubber processing chemicals'. Before the goods are assessed under this Item it has to be capable of being described not only as an 'anti-oxidant' but also a 'rubber processing chemical'. The goods in these cases have, admittedly, several alternative uses. As laid down in 1983 ELT 2483 in such cases the predominant use of the chemical concerned has a vital bearing. The Deptt. has not adduced sufficient evidence to make out that in respect of these goods, the predominant use is only as rubber processing chemical. The claim of the appellants that commodity imported has been used by them as 'Dye-intermediate' in the manufacture of Dye-stuffs remains unrebutted. The Collector of Customs has stated in his order that only those goods which are predominantly/principally/mainly used as 'rubber antioxidant' or chemicals will deserve to be classified under Item 65 C.E.T. He has relied mainly on Technical Books to conclude that the Classification under Item No. 65 C.E.T. was correct. But as already pointed out, in the absence of specific proof that these goods are predominantly used as 'rubber anti-oxidant', mere reliance on technical data will not suffice. Following the ruling in 1983 ELT 2483 we hold that the goods cannot be classified under Item 65. They are classifiable only under


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