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Larsen and Toubro Limited Vs. Collector of Customs - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1984)(18)ELT402TriDel
AppellantLarsen and Toubro Limited
RespondentCollector of Customs
Excerpt:
.....of the various varieties of graphite on page 563 under chapter 38 of the cccn does not cover the goods imported by the appellants. we have gone through the explanatory notes under chapter 38 of the cccn. while the cccn contains two sub-headings, 38.01 and 38.19, relating to graphite in chapter 38, the corresponding chapter of the cta has first clubbed as many as 19 sub-headings of the cccn and then broken up the combined heading into nine sub-headings on a pattern different from that of cccn. the explanatory notes on page 563 of the cccn relate only to sub-heading 38.19 of the cccn. in addition, there are separate explanatory notes under heading 38.01 of the cccn relating to artificial graphite. further, the explanatory notes under both these sub-headings of the cccn make it amply.....
Judgment:
1. The short point involved in these two appeals is whether extruded graphite rounds imported by the appellants fall under Heading 38.01/19(4) of the Customs Tariff Act, 1975, as urged by them, or under heading 68.01/16 of the CTA, as held by the lower authorities. Heading 38.01/19(4) relates to "artificial graphite". The relevant portion of heading 68.01/16 reads as "articles of other mineral substances, not elsewhere specified or included".

2. The appellants, in reply to a query from the Bench, stated that they were no longer asking for classification of their subject goods under heading 25.01/32 (7) since the goods were rounds of artificial graphite while heading 25.01/32 (7) related to graphite, natural. Their grievance was that the Custom House and later on both the lower authorities proceeded on the assumption that they had imported graphite moulds. The appellants stated categorically that they imported only rounds and not moulds and that they were manufacturing moulds themselves out of the imported rounds. They pleaded that the goods should be classified for assessment on the basis of their condition at the time of import and not what they became after importation.

3. The Department's representative stated that there was no dispute that the goods in these two appeals were artificial graphite. He relied on the Explanatory Notes under Chapters 38 and 68 of the CCCN to say that the corresponding Chapter 38 of the CTA covered semi-manufactures of graphite and that the subject goods, being finished articles of graphite and being non- electrical, fell within the scope of the corresponding Chapter 68 of the CTA. The Department's representative maintained that moulds and rounds were one and the same thing. At this stage, his attention was drawn by the Bench as Well as by the appellants to the fact that the appellants' claim all along had been that they used the imported rounds for manufacture of moulds and that even the Appellate Collector had accepted this position. It was also mentioned to him that the onus to establish classification under one heading or the other of the tariff was on the Department and that there was no evidence on record to show that rounds and moulds were one and the same. At this, the Department's representative accepted that the imported graphite rounds were semi-manufactures and not finished articles but stated that they could not yet be classified under Chapter 38 of the CTA because the Explanatory Notes on page 563 under Chapter 38 of the CCCN did not cover the particular variety of the graphite imported by the appellants.

4. We have carefully considered the matter. The position after the hearing before us is that both sides accept the goods as being semi-manufactures of graphite. It is also conceded by both sides, based on the Explanatory Notes of the CCCN, that semi-manufactures of graphite are covered by Chapter 38 while finished articles of graphite, of the non-electrical category, fall under Chapter 68. The only objection now made by the Department's representative against classifying the imported graphite rounds under Chapter 38 of the CTA is that listing of the various varieties of graphite on page 563 under Chapter 38 of the CCCN does not cover the goods imported by the appellants. We have gone through the Explanatory Notes under Chapter 38 of the CCCN. While the CCCN contains two sub-headings, 38.01 and 38.19, relating to graphite in Chapter 38, the corresponding chapter of the CTA has first clubbed as many as 19 sub-headings of the CCCN and then broken up the combined heading into nine sub-headings on a pattern different from that of CCCN. The Explanatory Notes on page 563 of the CCCN relate only to sub-heading 38.19 of the CCCN. In addition, there are separate Explanatory Notes under heading 38.01 of the CCCN relating to artificial graphite. Further, the Explanatory Notes under both these sub-headings of the CCCN make it amply clear that the list of items and varieties of graphite listed therein is by no means exhaustive. In sum, the position is that sub-headings 38.01 and 38.19 of the CCCN taken together cover all articles of artificial graphite and carbon in primary forms as well as up to the stage of semi-manufactures. The question of further classification under Chapter 68 or Chapter 85, depending on whether the articles are for electrical or non-electrical use, arises only in the case of finished articles of graphite and carbon. Since, in the two appeals before us, it is now the accepted position that the rounds imported by the appellants were semi- manufactures, inasmuch as they were used by the appellants as intermediate goods for further manufacture of moulds (the finished articles), they appropriately fall under heading 38.01/19 (4) of the CTA and not under Chapter 68. Accordingly, we allow both the appeals with consequential relief to the appellants.


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