1991 (9) TMI 188 - AT - Customs

Tribunal Upholds Classification of Polypropylene Liner Cloth Under Heading 51.04

VIKRANT TYRES LTD. Versus COLLECTOR OF CUSTOMS

The Tribunal upheld the classification of Polypropylene Liner Cloth under Heading 51.04, confirmed the applicability of countervailing duty as per the ... Claim for reclassification Issues Involved:1. Classification of Polypropylene Liner Cloth.2. Applicability of countervailing duty on Polypropylene Liner Cloth.3. Entitlement to exemption under Notification 110/75-C.E., dated 30-4-1975.Issue-wise Detailed Analysis:1. Classification of Polypropylene Liner Cloth:The primary issue is the classification of Polypropylene Liner Cloth imported by the appellants in July 1981. Initially assessed under Heading 51.04 of the Customs Tariff, the appellants sought reclassification under Heading 59.16/17, claiming it as a textile fabric commonly used in machinery or plant. The Tribunal examined the supplier's write-up, which described the cloth as a separator for rubber-coated tyre cord fabric, emphasizing its qualities such as light weight, easy handling, and low moisture absorption. However, the Tribunal found no evidence in the write-up or any other technical literature to support the claim that the cloth was used in calendering machines. The Tribunal concluded that the goods did not meet the criteria for classification under Heading 59.16/17, as they were not demonstrated to be commonly used in machinery or plant.2. Applicability of Countervailing Duty on Polypropylene Liner Cloth:The appellants argued that countervailing duty was not applicable as Polypropylene Liner Cloth was not manufactured in India at the relevant time. The Tribunal referred to Section 3 of the Customs Tariff Act, 1975, which mandates the levy of additional duty equal to the excise duty on a like article if produced in India. The Explanation to Section 3 clarifies that even if the goods are not manufactured in India, additional duty is levied on the class or description of articles to which the imported article belongs, at the highest rate applicable. The Tribunal found that the claim for exemption from countervailing duty was untenable as the statutory provision clearly mandated the levy of such duty.3. Entitlement to Exemption under Notification 110/75-C.E., dated 30-4-1975:The appellants claimed exemption under Notification 110/75-C.E., which exempts processed man-made fabrics from duty. The Tribunal examined the definition of 'processed' as per Notification 108/75-C.E., noting that the appellants failed to provide evidence that the Polypropylene Liner Cloth met the criteria for processed man-made fabrics. The supplier's write-up did not indicate any processing that would qualify the cloth for exemption. Consequently, the Tribunal rejected the claim for exemption under Notification 110/75-C.E.Conclusion:After thorough consideration, the Tribunal rejected the appeal on all grounds. The classification under Heading 51.04 was upheld, and the applicability of countervailing duty was confirmed. The claim for exemption under Notification 110/75-C.E. was also denied due to lack of supporting evidence. The appeal was thus dismissed in its entirety.