TMI Blog1985 (10) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... ER BHT , otherwise known as DBPC . The last three consignments consisted of a product with the proprietary name SANTONOX R , which is described as dialkyl phenol sulfide . It will be convenient to refer to these products by their short or proprietary names. On importation of the products they were charged to basic customs duty and also to countervailing duty equivalent to the excise duty under Item 65 of the Central Excise Tariff, which covers The following rubber processing chemicals, namely: - (1) Accelerators (2) Anti-oxidants The appellants claimed refund on the ground that they should have been charged to the lower rate of countervailing duty with reference to Tariff Item 68, i.e. All other goods, not elsewhere specified . On the claims being rejected at the Assistant Collector s level they filed 9 appeals to the Collector of Customs (Appeals), Bombay. In his combined Order-in-Appeal against which the present appeals have been filed, the Collector rejected all the 9 appeals and the appellants have, therefore, come up to the Tribunal with these 9 appeals. 3. At this stage we are constrained to point out that nowhere in the order of the Collector of Customs (Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ran cited the judgment of the Delhi High Court in the case of M/s. Metal Forgings Private Limited v. Union of India and Ors. [1985 (20) E.L.T. 280 (Del.)=1985 E.C.R. 1537 Delhi]. In that case the Hon ble High Court was dealing with the classification of certain forged products of iron and steel. However, in the course of its judgment it made an observation [vide para 19 of the judgment] as follows : - The condition of the article at the time when it leaves the factory gate is the determining factor for the purpose of levy of excise duty. End use of the goods cannot determine their classification in general except where classification is related to the function of the goods as in Tariff Item No. 65. Shri Chandrasekharan argued that this would show that with reference to Tariff Item 65 the use of the goods was relevant. (Actually it appears to us that this does not have much bearing on the present cases). 6. Shri Chandrasekharan also referred to an observation of the Collector (Appeals) to the effect that the appellants have admitted that the imported chemicals were rubber processing chemicals in the nature of anti-oxidant . He submitted that this observation was not correct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered as an anti-oxidant used in the processing of rubber, was now sought to be advanced for the first time. Shri Chandrasekharan submitted that this argument was fallacious. If such an argument were to be allowed, an expression such as alloy of iron could be stretched to cover an alloy of copper, on the ground that iron was a metal and copper was also a metal. Shri Chandrasekharan submitted that the arguments advanced by him, based on the Tribunal s previous orders, still held good, and that the appeals should be allowed. 11. We have given our careful consideration to the arguments advanced on both sides. Before we come to the facts of the individual cases, we would like to take note of the position emerging from the previous orders of the Tribunal, on which Shri Chandrasekharan relied. 12. In its Order No. 250/83-C, dated 19-5-1983 in the case of Indian Oil Corporation Limited, Calcutta, the Tribunal dealt with the question whether Alkylated Phenol was a rubber chemical within the scope of Tariff Item 65. The Tribunal observed that almost every chemical has more than one use and it would not be proper to classify it with reference to only one of those uses unless th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th Alkylated Phenol , which is said to be another name for DBPC. The Bench observed that the question of predominant use and other aspects of the case for and against the classification of such goods under T.I. 65 had been discussed at great length in the Tribunal s decision in the case of Hico Products and that it did not see any reason to differ from the said decision. Accordingly, in that case also the classification under Tariff Item 65 was set aside. 15A. In its Order No. 267/84-C dated 17-5-1984 in the case of Indian Oil Corporation Ltd., Calcutta v. Collector of Customs, Calcutta, the Bench was again concerned with the classification the Akylated Phenol . Following the previous orders of the Tribunal, the Bench allowed this appeal also, and set aside the classification under T.I. 65. 16. As already mentioned, the Tribunal s order in the Hico Products case contained a detailed discussion regarding the scope of T.I. 65, and the relevant considerations were laid down (vide para 14 above). Although there was a dissenting order in that case, the subsequent Order No. C-580/83 in the case of Indian Oil Corporation, Madras, passed by a Bench of three other Members, recorded th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efund claim in the case of the PELOPOR consignment, the appellants had stated that the DSTDP was an anti-oxidant and was used by them for the manufacture of polyethylene. They stated that the higher rate of duty was charged because the material could also be used as a rubber chemical. In their covering letter dated 2-3-1982 to the refund claim in the case of Edward Rutledge consignment, the appellants stated that the C.V.D. was levied at 15% based on the assumption that the material could be used in the manufacture of rubber products. They asserted that they did not manufacture any rubber products, nor did they have any connection whatsoever with the rubber industry. 23. In this Order No. S/6-C-3376/83-R dated 8-9-1983 relating to the Pelopor consignment, the Assistant Collector observed that DSTDP was a rubber processing chemical (anti-oxidant) and that the importers, vide their letter dated 15-7-1983, had themselves accepted that it could also be used as a rubber chemical. He accordingly held that the classification under T.I. 65 was in order. In his order No. S/6-1708/82-R dated 9-11-1983 relating to the Edward Rutledge consignment the Assistant Collector recorded th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll not determine their assessment to c.v.d. under Item 68 of the C.E.T. In other words, since the imported goods were specifically covered by Item 65 of the C.E.T. they ought to have been assessed to c.v.d. under Item 65 of the C.E.T. and since this is what was done by the lower authority and was confirmed by the Assistant Collector, I find no reason to interfere with these orders in all these appeals." 25. It will be seen that the Collector (Appeals) has gone by the fact that (according to him) the appellants themselves had admitted that the imported chemicals were rubber processing chemicals in the nature of antioxidants. In reaching this conclusion he had apparently relied on the observations in the orders of the Assistant Collector to which we have already made reference. We do not find that the contents of the appellants letters accompanying their refund applications bear out that conclusion. The Collector (Appeals) has justified his coming to a decision based overwhelmingly on the alleged admission of the appellants. The most that could be said against the appellants was that they had admitted that the goods could also be used as rubber processing chemicals; but, as held b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fin wax used in the manufacture of waxed liners and waxed boards for food wrappers, etc. There is nothing to indicate that the use in rubbers is the predominant use. 28. In his order on the Jaladurga consignment, the Assistant Collector referred to the literature submitted by the appellants. He held that although the goods may have multifarious uses one of its well recognised and established uses is as rubber antioxidant. The rubber antioxidants fall under Item 65 C.E.T. In his order on the Alcoutim consignment, the Assistant Collector observed that the literature produced showed that the product under reference had uses in rubbers. He went on to observe in view of this, the party s contention that it is not rubber chemical, is not correct and therefore the claim is not admissible . 29. It will be seen that in both the orders the Assistant Collector held that the mere fact that the goods could be used in the processing of rubber would bring it within the scope of T.I. 65. This is plainly contrary to the criteria adopted by the Tribunal in the several cases referred to above. We have already seen that the Collector (Appeals) has gone mainly on the basis of certain admissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilar reasoning (but less specific) and therefore his finding also cannot be sustained. In this case also the classification under T.I. 65 deserves to be set aside, leaving the goods to be classified under T.I. 68. 35. As regards the consignment imported by Benny Skou , we are surprised to find that there is nothing at all in the Assistant Collector s order to support the conclusion reached by him. Orders No. S/6-C-3377 and 3378/83-R dated 6-1-1984 purports to be a combined order relating to a consignment of TMB-6P imported by the Alcoutim (covered by Appeal No. 909/85) and the present consignment imported by the Benny Skou . The former consignment was imported from France and the present consignment from Japan. The two products were different and made by different manufacturers. In his order, the Assistant Collector has referred only to the literature of the French manufacturers relating to TBM-6P and has totally omitted to make any reference to the present goods imported from Japan. Nevertheless, he has rejected both the claims. This total omission, even cursorily to examine on merits the claim of the party relating to the present consignment, has also gone unremarked by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the goods as antioxidant for rubber. He held that the goods had many alternative uses and had been correctly assessed to duty under Item 65 of C.E.T. 38. In his order on the President Roosevelt consignment the Assistant Collector referred to the literature submitted by the appellants in an earlier case, indicating it to be Dialkyl Phenol Sulfides . He referred to various uses shown for the goods in the literature and observed that it was capable of use in rubber as antioxidant. He also observed that the Bill of Lading under which the goods were shipped described them as Rubber antioxidant Cyclic Chemicals NOS (Antioxidant) SAFB . He, therefore, held that the classification under T.I. 65 was in order. In his order on the consignment imported by air, the Assistant Collector held that antioxidants were specifically covered under Item 65 and that the imported item being an antioxidant could not be an exception. 39. As already observed, the order of the Collector (Appeals) was in general terms and did not take note of the individual features of each consignment. In one of their appeals the appellants had explained their declaration of the goods as Rubber Antioxidants in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordance with the U.S. Commodity Code. This again raises the question whether the predominant use of the goods was as a rubber antioxidant, since the Commodity Code would be expected to have taken into account the predominant use of the goods. 42. We, therefore, find that in this case there is an element of doubt regarding the predominant use of the goods. On the one hand we have, the U.S. Commodity Code, according to which it is a rubber antioxidant; on the other hand, we have the reasoned decision of the former Appellate Collector in the light of the literature and trade practice etc., to the effect that the ordinary use of the goods was not as a rubber antioxidant. We then have to come back to the proposition that the burden of showing that the goods came within the scope of T.I. 65 was on the Department. We have to ask ourselves whether the lower authorities in the cases before us had discharged the burden. The answer is plainly in the negative because, apart from the Bill of Entry description they have not given any reasons to show that the predominant use of the goods was as an antioxidant for the processing of rubber. We have therefore to hold, on the evidence before us, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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