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TMI Blog1992 (7) TMI 196X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. While the Collector (Appeals) in the impugned order has held the impugned product to be classifiable under Heading 68.08. 2. In Appeal No. E/2660/90-D, the Assistant Collector has classified the impugned product under Heading 68.08 CTA which has been upheld by the Collector (Appeals) holding that Rule 3(b) of General Rules of Interpretation of the Tariff Schedule is to be applied on the principal of essential character envisaged thereunder. 3. The appellants claim to be the manufacturers of wooden flush doors in which range there is a type called "Fire Door". Its function is said to be to contain a fire in a building or portion of it for a specified rate of time. The imported item is said to be used in the fire door. The appellants rely on the manufacturer's catalogue which states that the master board is made by a chemical called calcium silicate matrix reinforced with cellulose and it does not contain asbestos or any other inorganic, mineral or man-made fibre. The sample of the item was sent for chemical analysis and it revealed that calcium silicate is the major constituent and cellulose is 15.8%. 4. In Appeal C/2660/90-D, the test report revealed that it is made up of as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Collector of Customs, Madras in his order No. C-3/2654/1979 dated 24-6-1980. The articles of Heading 68.09 will not withstand temperature like 9000C and above, while the imported item Master Board would withstand. The residuary Item 68.15 is not applicable as the item is not made of stone or other material substance. The Supreme Court ruling in the case of M/s. Khandelwal Metal & Engg. Works (supra) would apply to the facts of the present case. It is further pointed out by the appellants that the item in question consists of calcium silicate, which is the principal ingredient and givng the essential character of the product falling under Heading 38.23 and not under Heading 68.08 which can be attracted only in the case of the product having been made of "vegetable material". In the item, the cellulose in fibre form was used only as a stiffener and in no way it gives the essential character of the product and hence the item does not deserve to be classified under Heading 68.08 of CTA. 7. We have heard Shri V. Lakshmi Kumaran, learned advocate for the appellants and Smt. Sundaram, learned DR for the Revenue. Shri Lakshmi Kumaran, reiterating the grounds of appeal, contended that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entries referred to before us. The item is 'Master Board'. The product literature describes the impugned product 'Master Board' as "a tough, flexible, dimensionally stable, Class O Multipurpose building board. It is simple and safe to work, easy to decorate and it will not rot or decay." The literature further states about the product as follows :- "Master board, the product - Master board has a laminar structure and consists of a calcium silicate matrix reinforced with cellulose. It does not contain asbestos or any other inorganic mineral or man-made fibre. The board is cured in a high pressure steam autoclave which causes an irreversible chemical change, thus providing high dimensional and chemical stability accompanied by low alkalinity. Master board properties - Master board is unaffected by moisture; it will not swell, shrink or warp; it can withstand high temperatures; it is inert yet flexible and can be safely and easily handled, worked and decorated. Master board appearance - Master board is off-white in colour and is supplied in rectangular boards with square-cut edges. It is smooth sanded on one face and lightly textured on the other. Master board performance - Master ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued that Heading 68.08 can be applied only if there is predominance of vegetable fibre which is not so in the impugned product. On the other hand, the learned DR has submitted that Chapter 38 comes under Section XIII which covers articles of glass, plates, cement, asbesto, mica or other similar matters; Ceramic Product, Glass and glassware and therefore, the description being very specific, the classification under [Heading 68][3] is appropriate and correct. In order to consider the claim of the parties, it is necessary to go through the rival entries mentioned below - "Heading Sub- Description of article Rate of duty No. HeadingNo. Standard AreasPreferential C. Excise Tariff Heading 68.08 6808.00 Panels, boards, tiles blocks and similar ar- ticles of vegetable fibre, of straw or of shavings, chips, -par- ticles sawdust or other waste of wood, agglomerated with cement, plaster or other mineral binders 100% 68.07 68.15 Articles of stone or of other mineral sub- stances (including ar- ticles of peat) not elsewhere specified or included." "Chapter 38 - This Chapter does not cover (a) Separate chemically defined el ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication under Chapter 38 has been negatived on the ground that [sub-] heading 3801.90 is a residuary heading and Heading 68.01/16 (1) of the Customs Tariff Schedule which reads "articles of other mineral substances not elsewhere specified" was held to be more appropriate. It has to be noted that there is a vast change in the present tariff and therefore, it will not be correct to hold that the order No. 268/87-C rendered under old tariff applies to this case. As has been noted, Chapter 68 deals with articles of glass, plastic, cement, asbestos, mica and other similar products. The product in question is cellulose, mica, Chapter Heading 68.08 has the specific entries as "Panels, boards, tiles, blocks and similar articles of vegetable fibre, of straw or of shavings, chips, particles sawdust or other waste of wood, agglomerated with cement, plaster or other mineral binders". The importer has said that the product is not essentially made out of chemical fibre but of chemicals. 11. On the other hand, the Revenue has contended that calcium silicate is a binder and the essential characteristics to the product has been given by the foundry fibre. The Revenue has taken resort to Rule 3(b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is applicable. (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration". Rule 3(b) has to be resorted to only when classification cannot be done by virtue of Rule 3(a). As we have stated that Chapter 38 is not at all appropriate and that the Tribunal has also expressed its view on the erstwhile Tariff, in the above referred order No. 268/87-C, therefore, the question of resorting to Rule 3(b) does not arise in this case in the first instance. As can be seen from Rule 1 read with Rule 3(a), the classification has to be determined according to the terms of the heading and in related Chapter or Section and placed in the most specific description than a general heading. The impugned product has come out in the form of a Board and it is completely identifiable as such. Therefore, the question of its classification as a mixture of two or more products does not arise. In the circumstances, the description of the product as Board, which has been made from the cellulosic fabric agglomerated with mica and calcium silicate, is more specific than to consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing else. It is a mirror, an article which reflects images. It is referred to as a glass mirror only because the word glass is descriptive of the mirror in that glass has been used as a medium for manufacturing the mirror. The basic or fundamental character of the article lies in its being a mirror. It was observed by this Court in Delhi Cloth and General Mills Co. Ltd. v. State of Rajasthan & Ors [1980 (3) SCR 1109 = 1980 (6) E.L.T. 383 (S.C.) ] which was a case under the Sales-tax law - "In determining the meaning or connotation of words and expression describing an article or commodity the turnover of which is taxed in a sales tax enactment, if there is one principle fairly well settled it is that the words or expressions must be construed in the sense in which they are understood in the trade by the dealer and the consumer. It is they who are concerned with it and it is the sense in which they understand it that constitutes the definitive index of the legislative intention when the statute was enacted." That was also the view expressed in Geep Flashlight Industries Ltd. v. Union of India and Others [1985 (22) E.L.T. 3]. Where the goods are not marketable that principle of con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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