Lipi Boilers (P) Ltd. Vs. Cc - Court Judgment

Excerpt:
1. the appellants imported goods declaring these to be boiler quality alloy seamless tubes conforming to astm-a-213-t-11. they claimed concessional rate of duty under notification no. 86/86-cus. dt.17.2.1986 as amended by notification no. 93/87/cus. dt. 1.3.1987 under sl. no. 5 of the aforesaid notification. this notification exempts vide si. no. 5 of the table annexed thereto tubes and pipes for boilers falling cth: 84.02. the assistant collector rejected the claim on the ground that tubes are meant for super heater coils and the super heater is an auxiliary plant for use in boilers sub-heading 84.02 and is classifiable under cth 84.04. collector (appeals) rejected the plea.2. arguing for the appellants the ld. counsel submits that there is no dispute in regard to classification of these seamless tubes which are assessable under cth: 73.04. si. no. 5 of notification no. 86/86-cus.dt. 17.2.1986 exempts tubes and pipes for boilers falling under cth 84.02. they are actual manufacturer of such boilers and these tubes are used within the boilers as super heating coils. they are also used in the super heater as such.3. arguing on behalf of the revenue the id. dr submits that coils can be used in super heaters also and if they are so used they are entitled to exemption as super heaters as these are classifiable under heading 84.04 and not 84.02.4. we have heard both sides. assistant collector while holding the imported tubes are made for super heater coils is heater as super heaters are auxiliary apparatus which consists of heaters with high pressure steel tube system in which the saturated steam from the boiler is further heated to remove moisture and to produce steam at high temperature. it has been contended before us by the ld. counsel that assistant collector has fallen in error in recording even while these are used as super heater coils that these form part of super heater. he contends that these are not used in super heaters but as coils in the boilers itself and therefore can be considered as tubes for boilers.collector (appeals) has recorded the contention of the appellants that super heaters made out of this coils which falls under heading 84.02 and the tubes require for the manufacture of auxiliary plant if meant for boiler under heading 84.02 are eligible for the benefit under the notification. it has been contended by the ld. counsel that these tubes are used as super heater coils in the super heater as such but in the boiler itself. he drew our attention to the certificate given by the chief inspector of steam boilers who certifies that super heater tubes as per drawing is an integral part of the boiler. he also draws our attention to the accessory parts to indicate how temperature in the boiler is increased with the help of these super heater coils. we find that neither the assistant collector nor the collector (appeals) has referred to the technical literature as well as the certificate and the evidence, drawings to arrive at a decision. hsn note 1145 recognised the super heaters are often part of the main boiler assembly but in some cases have a separate fuel system. hsn note under 84.02 also indicates that such auxiliary apparatus like super heaters are classified as boilers when they are presented together therewith. but if presented separately they are classified under appropriate heading.the question before us therefore is whether these tubes are part of super heater or auxiliary plant or super heater coils within the boiler are eligible for the exemption. some what similar question came up before this tribunal in case of thirumalai chemicals ltd. v. cc. madras order no. c/595/96-b2. to a specific question from the bench in that case it was admitted by the ld. consultant that they do not have any evidence right now with them to substantiate their claim that these tubes were meant specifically for "steam water boilers capable also of producing low pressure steam". they have also not been able to substantiate that these tubes and pipes were imported in a form as to be suitable for boilers. the goods have already been removed and therefore, if a claim is to be made after removal of the goods, the evidence has necessarily to be of such a quality as would straight away support the claim.5. in this case, however, ld. counsel draws our attention to the drawings as well as the opinion from the expert which according to him support their case. these tubes are part of boiler itself and not auxiliary equipment. we find that these aspects have not been looked into by the authorities below with reference to the technical opinion.6. ld. dr also submits that they have to support their claim that these are parts classifiable under 84.02 and fairly concedes that in order to substantiate their claim the matter can be remanded.7. considering the facts and circumstances of the case we are of the view that in the interest of justice an opportunity to substantiate their claim before the original authorities has to be given. in view of this we set aside the impugned order and remand the matter to the assistant collector for de nova decision for determining whether or not the tubes as such are part of the boiler itself. the appellants shall be at liberty to produce such additional evidence as they consider would support their case.

Judgment:
1. The appellants imported goods declaring these to be Boiler Quality Alloy Seamless Tubes conforming to ASTM-A-213-T-11. They claimed concessional rate of duty under notification No. 86/86-Cus. dt.

17.2.1986 as amended by Notification No. 93/87/CUS. dt. 1.3.1987 under Sl. No. 5 of the aforesaid notification. This notification exempts vide SI. No. 5 of the table annexed thereto tubes and pipes for boilers falling CTH: 84.02. The Assistant Collector rejected the claim on the ground that tubes are meant for super heater coils and the super heater is an auxiliary plant for use in Boilers sub-heading 84.02 and is classifiable under CTH 84.04. Collector (Appeals) rejected the plea.

2. Arguing for the Appellants the Ld. Counsel submits that there is no dispute in regard to classification of these seamless tubes which are assessable under CTH: 73.04. SI. No. 5 of Notification No. 86/86-Cus.

dt. 17.2.1986 exempts tubes and pipes for boilers falling under CTH 84.02. they are actual manufacturer of such boilers and these tubes are used within the boilers as super heating coils. They are also used in the super heater as such.

3. Arguing on behalf of the Revenue the Id. DR submits that coils can be used in super heaters also and if they are so used they are entitled to exemption as super heaters as these are classifiable under heading 84.04 and not 84.02.

4. We have heard both sides. Assistant Collector while holding the imported tubes are made for super heater coils is heater as super heaters are auxiliary apparatus which consists of heaters with high pressure steel tube system in which the saturated steam from the boiler is further heated to remove moisture and to produce steam at high temperature. It has been contended before us by the Ld. Counsel that Assistant Collector has fallen in error in recording even while these are used as super heater coils that these form part of super heater. He contends that these are not used in super heaters but as coils in the boilers itself and therefore can be considered as tubes for boilers.

Collector (Appeals) has recorded the contention of the appellants that super heaters made out of this coils which falls under heading 84.02 and the tubes require for the manufacture of auxiliary plant if meant for boiler under heading 84.02 are eligible for the benefit under the Notification. It has been contended by the Ld. Counsel that these tubes are used as Super heater coils in the super heater as such but in the boiler itself. He drew our attention to the certificate given by the Chief Inspector of steam Boilers who certifies that super heater tubes as per drawing is an integral part of the boiler. He also draws our attention to the accessory parts to indicate how temperature in the boiler is increased with the help of these super heater coils. We find that neither the Assistant Collector nor the Collector (Appeals) has referred to the technical literature as well as the certificate and the evidence, drawings to arrive at a decision. HSN note 1145 recognised the super heaters are often part of the main boiler assembly but in some cases have a separate fuel system. HSN note under 84.02 also indicates that such auxiliary apparatus like super heaters are classified as boilers when they are presented together therewith. But if presented separately they are classified under appropriate heading.

The question before us therefore is whether these tubes are part of super heater or auxiliary plant or super heater coils within the boiler are eligible for the exemption. Some what similar question came up before this Tribunal in case of Thirumalai Chemicals Ltd. v. CC. Madras order No. C/595/96-B2. To a specific question from the Bench in that case it was admitted by the Ld. consultant that they do not have any evidence right now with them to substantiate their claim that these tubes were meant specifically for "steam water boilers capable also of producing low pressure steam". They have also not been able to substantiate that these tubes and pipes were imported in a form as to be suitable for boilers. The goods have already been removed and therefore, if a claim is to be made after removal of the goods, the evidence has necessarily to be of such a quality as would straight away support the claim.

5. In this case, however, Ld. Counsel draws our attention to the drawings as well as the opinion from the expert which according to him support their case. These tubes are part of boiler itself and not auxiliary equipment. We find that these aspects have not been looked into by the authorities below with reference to the technical opinion.

6. Ld. DR also submits that they have to support their claim that these are parts classifiable under 84.02 and fairly concedes that in order to substantiate their claim the matter can be remanded.

7. Considering the facts and circumstances of the case we are of the view that in the interest of justice an opportunity to substantiate their claim before the original authorities has to be given. In view of this we set aside the impugned order and remand the matter to the Assistant Collector for de nova decision for determining whether or not the tubes as such are part of the boiler itself. The appellants shall be at liberty to produce such additional evidence as they consider would support their case.