Full Judgment
2. On 10-12-1987, when the appeals came up for hearing, we had heard Shri V. Sridharan, Advocate for the appellants and Shri K.C. Sachar, JDR, for the respondent and had announced our order dismissing the two appeals. We now proceed to give reasons for our order.
3. Both the appeals involve Haveg pipes and fittings imported by the appellants for their chemical factory. These pipes are stated to be comprised of asbestos to the extent of 60% and phenolic resin to the extent of 40%. The pipes are said to be resistant to high pressure and temperature. On import the goods* were classified under heading No.68.01/16(1) of the First Schedule to the Customs Tariff Act 1975. Later on, the appellants filed claims for refund of duty on the ground that the pipes and pipe fittings being recognizable parts of machinery, should have been classified and assessed to duty under heading No.84.17(1) of the Schedule. This claim was rejected by the Assistant Collector and, in appeal, by the Appellate Collector of Customs, Madras by the two orders which are impugned in the present proceedings.
4. The basis on which the lower authorities upheld the classification of the goods under heading No. 68.01/16(1) of the Schedule is that Chapter 84 of the Schedule which covers machines, machinery and parts, excluded from its purview Mill Stones, Grind Stones and other articles falling within Chapter 68 of the Schedule by virtue of the Statutory Chapter Notes.
5. When the matter was taken up for hearing, Shri V. Sridharan, appearing for the appellants fairly stated that the decision of this Tribunal in the case of Collector of Customs, Bombay v. Albright Morarjee and Pandit Ltd. [Order Nos. 870 and 871 of 1987-D dated 2-11-1987 reported in 1988 (33) E.L.T. 488 (Tribunal)] holding that "Graphiler Blocks" made of artificial graphite (Electro graphite and Phenolic resin) were correctly classifiable under heading No. 84.17(1) and not under heading 68.01/16(1) of the Schedule, was not applicable to the facts of the present case. Shri Sachar for the Revenue also made a similar statement. The reason why the said decision does not apply to the facts of the present case is that unlike in the Albright Morarjee and Pandit case, where the Tribunal found that the goods were comprised of artificial graphite and phenolic resin, in the present instance, the major component of the goods, namely, asbestos is a naturally occurring substance and would, therefore, attract the provisions of Chapter 68 which, among other things, covers articles of asbestos by specific mention. We agree with the submissions of both sides.
6. Shri Sridharan again fairly stated before us that the present case would be covered by the decision of a 5-Member Bench of this Tribunal in Saurashtra Chemicals, Porbandarw. Collector of Customs, Bombay -1986 (23) E.L.T. 283.
By that decision, it was held that Carbon Rings and Carbon Seals though recognizable as spare parts in turbosets and compressors, were classifiable not under Chapter 84 but under heading 68.01/16(1) because they were articles of carbon, a mineral substance, and statutory Note.l(a) to Chapter 84 clearly excluded from Chapter 84 "Mill Stones, Grind Stones and other articles falling within Chapter 68". It was held that even fully finished machinery parts, if they are made of carbon, would fall under Chapter 68.
7. In the light of the above discussion, we are of the opinion that the lower authorities were correct in upholding the classification of the subject goods under heading No. 68.01/16(1) of the Schedule.
Accordingly, we dismiss both the present appeals.