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Indian Aluminium Co. Ltd. Vs. Collector of Customs - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1983)(13)ELT979TriDel
AppellantIndian Aluminium Co. Ltd.
RespondentCollector of Customs
Excerpt:
.....the appellants explained their case with the help of photographs. it was explained that when hot rolled sheets came out after the final pass of rolling, their length was about 410 fit.while the length of their rolling table was only 220 ft. therefore, as an operational necessity, they had installed the blocker at the end of the final pass of hot rolling. the blocker picked up the hot rolled sheet, coiled it and transported it to a conveyor for further cold rolling. apart from the shorter length of the hot rolling table, the hot roiled sheet had to be coiled for two more reasons. first, a long strip of over 400 ft. cannot be handled and transported further in straight length. secondly, their cold rolling mill, which was an operation subsequent to hot rolling, was designed to take the.....
Judgment:
2. In this case, the appellants seek reassessment of "Hot mill blocker and ancillary equipment" (hereinafter referred to as 'the blocker') at lower rate of duty under heading 84.22 of the Customs Tariff Act, 1975 as a handling equipment or, in the alternative, under heading 84 59(2) CTA as a mechanical appliance designed for production of a commodity, namely, aluminium strips or sheets in coil. The Assistant Collector and the Appellate Collector rejected their claim and upheld the original assessment made under heading 84.59(1). The appellants filed a revision application before the Central Government which, on transfer to this Tribunal, is now before us as a deemed appeal. To facilitate a proper understanding of the points and counter-points of the two sides, we reproduce below the description of headings 84.22 and 84.59 :- "84.22 Lifting, handling, loading or unloading machinery, telphers and conveyors (for example, lifts, hoists, winches, cranes, transporter cranes, jacks, pulley tackle, belt conveyors and teleferics) not being machinery falling within Heading No. 84.23." "84.59 Machines and mechanical appliances, having individual functions, not falling within any other Heading of this Chapter : (2) Machines and mechanical appliances designed for the production of a commodity, machinery for treating metals, wood or similar materials, for stripping and cutting of tobacco leaf or for cutting or rolling tea leaves ; machines for mounting card clothing ; nuclear reactors." 3. During the hearing, the appellants explained their case with the help of photographs. It was explained that when hot rolled sheets came out after the final pass of rolling, their length was about 410 fit.

while the length of their rolling table was only 220 ft. Therefore, as an operational necessity, they had installed the blocker at the end of the final pass of hot rolling. The blocker picked up the hot rolled sheet, coiled it and transported it to a conveyor for further cold rolling. Apart from the shorter length of the hot rolling table, the hot roiled sheet had to be coiled for two more reasons. First, a long strip of over 400 ft. cannot be handled and transported further in straight length. Secondly, their cold rolling mill, which was an operation subsequent to hot rolling, was designed to take the material only in coil form. Most of their hot rolled sheets were subjected to cold rolling within their factory. In a few cases, however, hot rolled sheets were sold to customers as such and to make such a sale practicable, coiling of the long sheets was essential. According to them, the function of the blocker was essentially handling of the hot rolled sheet and the blocker should, therefore, be assessed under Heading 84.22. Their alternative plea was that it may be assessed under Heading 84.59(2) since it produced coiled aluminium sheets or strips which were the saleable commodity.

4. The Department's representative argued that mechanical appliances described in Heading 84.22 were all designed only to lift, handle or convey the material ; none of them changed the form or shape of the material. According to him, the principal function of the blocker was coiling which could not be called the function of lifting, handling or conveying machine, He relied on the Explanatory Notes under Heading 84.59 of CCCN according to which coiling machines for flexible cables and tubes are classifiable under Heading 84.59 and pleaded that on the same analogy the blocker should also be classified under Heading 84.59.

Regarding the appellants' alternative prayer, the Department's representative stated that by merely coiling the hot rolled sheet, the blocker did not produce any commodity.

5. We have carefully considered the matter. There is no dispute between the parties that the blocker is not an integral part of the hot rolling mill but is an auxiliary equipment. There is also no dispute that the blocker performs the composite functions of (1) coiling, and (2) un-loading the coil sheet or strip on to the conveyor. From the three operational reasons given by the appellants themselves, namely, the shorter length of their hot mill table, making further handling and conveyance of the hot rolled long sheet possible and for feeding their cold rolling mill, we have no doubt in our mind that the principal function of the blocker is coiling. The coiling operation cannot be called mere handling. In the context of the appellants' plant, it is an essential process of manufacture in the course of production of cold rolled sheets and strips from aluminium ingots. We also agree with the Department's representative that none of the machines enumerated in Heading 84.22 alter the form or shape of the material ; their function is confined to lifting, handling, loading, unloading and conveying.

Since we hold that the principal function of the blocker is coiling, that is other than mere handling, it cannot be classified under Heading 84.22. As regards the appellants' alternative prayer, we hold that the blocker is not designed for the production of any commodity nor is to a machinery for treating metals, its function is just to pick up the long hot rolled sheet, which has already come into existence after the final pass of hot rolling, coil it and unload it on to the conveyor. We hold, therefore, that sub-heading (2) of Heading 84.59 is not the appropriate classification for such a mechanical appliance. Nevertheless, since the blocker is a mechanical appliance having its own individual function of coiling and handling, it falls squarely within the description of Heading 84.59(1) under which it has been assessed by the Department.


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