1991 (5) TMI 170 - AT - Customs

Imported dies classified as parts of plastic extruders, not interchangeable tools. Appeal allowed, order set aside.

The Tribunal concluded that the imported dies were classifiable under Heading 84.59(2) as parts of plastic extruders for the manufacture of plastic tapes ... Classification of goods under Customs Tariff headings - machine tool - interchangeable tools - parts of a machine - interpretation of the word 'including' in tariff entries - use of Explanatory Notes to the CCCN in tariff classificationMachine tool - interchangeable tools - parts of a machine - use of Explanatory Notes to the CCCN in tariff classification - Whether the imported dies for plastic extruders are classifiable as interchangeable tools under Heading 82.05(1) or as parts of machinery under Heading 84.59(2). - HELD THAT: - The Tribunal analysed whether a plastic extruder qualifies as a 'machine tool' and whether the dies fitted to it are 'interchangeable tools' within Heading 82.05. Relying on the definitions and authorities quoted in Spaco Carburettors, the Tribunal held that a machine qualifies as a machine tool only if it is power driven and intended for operations such as turning, boring, drilling, grinding, polishing or similar processes on solid parts, especially metals or other hard materials. The CCCN Explanatory Notes list operations and materials and the reference to 'certain plastics' was reasoned to denote hard plastics; hence plastic extruders making tapes from materials like HDPE and polypropylene do not fall within that concept of machine tools. On interchangeability, the Tribunal applied the ISO-based reasoning in Purewell & Associates: a tool is interchangeable only if it can be used in place of another to fulfil the same requirement. The dies in the present case were usable only for manufacture of a particular plastic tape and no other tool could replace them; therefore they are not interchangeable. Applying these conclusions, the dies could not be classified under Heading 82.05 but are parts of the plastic-extrusion machines and thus fall under Heading 84.59(2). [Paras 6, 7, 8, 9, 12]Dies are not interchangeable tools for machine tools and are classifiable as parts of plastic extruders under Heading 84.59(2), not under Heading 82.05(1).Interpretation of the word 'including' in tariff entries - scope of Heading 82.05 - analogy with excluded items in Explanatory Notes - Whether the specific mention of 'dies for wire drawing' and 'extrusion dies for metals' after the word 'including' restricts or enlarges the scope of Heading 82.05, and whether by analogy dies for plastic extruders are excluded. - HELD THAT: - The Tribunal considered the effect of the term 'including' in Heading 82.05 and observed that the word, when used in an interpretative context, serves to enlarge the scope of the preceding words; the specific mention of wiredrawing and metal extrusion dies was viewed as removing doubt about their inclusion rather than limiting the Heading to those items alone. Nevertheless, having applied the textual and purposive reading of the CCCN Explanatory Notes and the specific exclusions contained therein (for example spinnerets for manmade fibres and dies for drawing glass fibres), the Tribunal held that dies used in the manufacture of plastic tapes are analogous to those excluded items and therefore fall to be treated as parts of the extruder under Heading 84.59(2). Thus the interpretative effect of 'including' did not operate to bring the dies within Heading 82.05 given the materials and function involved. [Paras 10, 11, 12]Although 'including' is enlarging in principle, the CCCN Notes and analogies with expressly excluded items lead to holding that dies for plastic tape extrusion are excluded from Heading 82.05 and are classifiable under Heading 84.59(2).Final Conclusion: The appeal is allowed: the imported dies for plastic extruders were held to be parts of the extrusion machines and classifiable under Heading 84.59(2), not as interchangeable tools under Heading 82.05(1); the order under challenge is set aside with consequential relief to the appellants. Issues Involved:1. Classification of imported dies for plastic extruders under the correct Customs Tariff Heading.2. Determination of whether plastic extruders are machine tools.3. Classification of dies as interchangeable tools.Detailed Analysis:1. Classification of Imported Dies for Plastic Extruders:The appellants claimed the imported dies should be classified under Heading No. 84.59(2) of the Customs Tariff Act, read with Central Excise Tariff Item No. 68, as component parts of plastic extruder machines. The Assistant Collector classified the goods under Heading No. 82.05(1) read with Central Excise Tariff Item No. 51A. The main contention of the appellants was that Heading 82.05 covers only interchangeable tools and dies for wire drawing and extrusion dies for metals, not for plastic extruders. They argued that the imported dies should be classified under Heading 84.59(2) as parts of plastic extrusion machines. The department maintained that the dies were classifiable under Heading 82.05 as interchangeable tools designed for fitment on plastic extruders.2. Determination of Whether Plastic Extruders are Machine Tools:The department argued that plastic extruders could be deemed as machine tools based on the definition provided in the Tool Engineers' Handbook and the CCCN Notes to Heading 82.05. They contended that plastic extruders, being machines designed for the production of plastic tapes, fall under Heading 84.59 and the dies used in such extruders should be classified under Heading 82.05 as interchangeable tools. The appellants countered this by arguing that plastic extruders for manufacturing tapes from materials like HDPE and Polypropylene could not be categorized as machine tools, as they do not carry out processes like turning, boring, drilling, grinding, or polishing of solid parts, especially metals.3. Classification of Dies as Interchangeable Tools:The appellants argued that the imported dies were not interchangeable tools as they were designed exclusively for use in plastic extruders for producing plastic tapes. They referenced the Tribunal's decision in the case of Purewell & Associates Ltd. v. Collector of Customs, Bombay, where die sets intended for power presses were held as non-interchangeable. The department argued that the use of the word 'including' in Heading 82.05 enlarges its scope to cover other types of dies, relying on the Supreme Court's decision in Commissioner of Income Tax v. Taj Mahal Hotel. However, the Tribunal found that the dies in question were usable only for the manufacture of plastic tape and no other tool could perform the same function, thus they could not be deemed interchangeable.Conclusion:The Tribunal concluded that the imported dies were classifiable under Heading 84.59(2) as parts of plastic extruders for the manufacture of plastic tapes and could not be deemed as interchangeable tools for machine tools. The appeal was allowed, and the order appealed against was set aside with consequential relief to the appellants.