AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
1984 (6) TMI 236
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....sistant Collector of Customs who held that since the (steel) wires were completely covered with rubber and the purpose of the wire was to reinforce the rubber sheets to be used in the manufacture of radial tyres, the original assessment was in order. MRF pursued the matter in appeal. It is seen from the impugned order passed by the Appellate Collector of Customs, Madras, that despite an opportunity being given of being heard, MRF did not avail themselves of the opportunity but requested the Appellate Collector to decide the matter on the basis of the submissions made by them. The Appellate Collector rejected the appeal for the reasons stated in his order. It is this order, which is under challenge before us. 3. In the appeal before us (transferred revision application), it is urged that the goods in dispute have a rubber content of only 28.43% as against the steel content of 57.35%. They cannot, therefore, be held to be an article of rubber. Interpretative rule 3(b) to the Tariff Schedule is relied upon. It is urged that the reinforcing material is steel fabric, in replacement of the conventional reinforcing materials such as cotton, rayon, nylon, etc. The imported go....
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....support of the theory that the preponderating substance should determine the classification of composite goods, reliance was placed on the Gujarat High Court's decision reported in 1980 E.L.T. 752. And, if it is held that both headings 40.45/16 (1) and 73.27/28 were applicable, the one favourable to the assessee should be applied. 8. In reply, the learned Departmental Representative submitted that the present goods were composite and not specified in any heading. So Rule 3(b) had application. From MRF's write-up, it could be seen that the goods are shaped to be a component of tyres. Therefore, the proper heading was 40.05/ 16(1). The goods were most akin to tyre components and even applying Rule 4, they were classifiable under the above heading. Shri Sunder Rajan placed reliance on the Customs Cooperation Council Nomenclature Explanatory Notes (CCCN) appearing on page 599 (Volume 2) and the Copendium of Classification Opinions published by Customs Cooperation Council (page 62). Reliance was also placed on the Tribunal decision reported in 1983 ECR 1344 with reference to the submission on the applicability of Rule 4. As regards the clain for refund of countervailing duty, it....
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....ading 40.05/16(1), states that "plates, sheets and strips consisting, of textile fabrics (other than-knitted or crocheted fabrics) combined with rubber, weighing more than 1,500 g/m* and containing not more than 50% by weight of textile material" are covered by the heading. Such products, it is stated, are used mainly for the manufacture of tyres, tubes, pipes, etc. 14. The choice is between the two headings 40.05/16 and 73.27/28. The papers furnished by M/s. MRF say that the goods are brass plated high tensile steel cord rubberised and with a specific angle of cut and are for use as belt in special tyres. The steel cord is rubberised to enable it to adhere to the body and tread of the tyre during tyre building and also to avoid cord to cord friction during service. Heading 73.27/28 specifies inter alia reinforcing fabrics of iron or steel wire. 15. In considering this heading we have to consider whether Chapter Note 2(c) to Chapter 40 will have any effect. This note runs thus :- "2. This Chapter does not cover the following products of rubber and textiles, which fall generally within Section XI : (c) Woven textile fabrics (other than the goods of heading 40.0....
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....safely say that when a compound containing rubber has lost totally its rubbery qualities, it is no longer fit to be associated with rubber and rubber articles. Chapter note 2 to Chapter 40 also contains the following : "However, plates, sheets and strip, of expanded, foam or sponge rubber combined with textile fabric, and articles thereof, are to be classified in Chapter 40 provided that the textile fabric is present merely for reinforcing purposes." 18. This paragraph ensures that when plates, sheets and strips have reinforcing textile fabric, .the fabric is merely to reinforce and not for any other purpose. It would be easy to misunderstand this as a qualification for the goods in question, because these goods are also to be used for reinforcement in tyre building. But what the chapter not speaks of is not that the article should be used as reinforcement for some other article, but that it (the article in dispute) is a rubbery article reinforced with textile fabric. The textile fabric must be to reinforce that article (under assessment) and not the article (the rubber tyre, in this case) that it will reinforce. 19. The learned Deptl. Representative referred ....
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....p with the second considering its nature and structure. This heading covers, as we have seen, "reinforcing fabric and similar materials of iron and steel wire". That it has a coating of rubber is, undoubtedly true; but that it is a reinforcing steel fabric made of steel wire is even truer because that is its essential character. It is less a tyre part or component than a reinforcing material for the tyre. Its role in the tyre is only because of its reinforcing ability and not because of its rubbery quality. And when we bear this in mind, it is not necessary for us to go into the Rules of Interpretation because these Rules require (Rule 3) that when for any reason goods are prima facie classifiable under two or more headings, the classification would be as specified in that Rule. In our opinion these goods are not prima facie classifiable under two or more headings, but only under one heading, namely, 73.27/28. 20. The Counsel for MRF has relied upon the Gujarat High Court decision in Bhor Industries Ltd. v. Union of India reported in 1980 E.L.T. 752 (Guj.) in support of his proposition that the predominent constituent should govern the classification of a composite article.....