TaxTMI 
TaxTMI 
1990 (12) TMI 77
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.... of the two headings in the First Schedule to the Customs Tariff Act, 1975 (hereinafter referred to as the `Customs Tariff') referred to later. 3. The appellant-assessee, as its name indicates, is a manufacturer of dry batteries. For this manufacture, it imports electrolytic manganese dioxide from abroad having a manganese dioxide content of 91%. Its claim is that customs duty is payable on this item under Heading 25.01/32(3) of the customs tariff. The Revenue, on the other hand, says that the item imported falls under Heading 28.01/58 of the Customs Tariff. It may be mentioned that the rate of duty under both the headings is the same. The only difference is that if the item is classified under the latter heading, as claimed by the D....
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.... (6) Flour-spar 100% (7) Graphite, natural 100% 90% (8) Mineral phosphates, natural, imported in a form indicative of their use as fertilisers Free (9) Rutile in granular or powder form for use otherwise than for extraction of metal 100% (10) Insoluble sulphur 100% (11) Sulphur of all kinds, other than insoluble sulphur, sublimed sulphur, precipitated sulphur and colloidal sulphur 10% Chapter 28, to which reference is made by the Department, comes under Section VI of the schedule entitled "Products of the chemical or allied industries" cov....
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.... within Section V". Since battery grade manganese dioxide finds a place in Chapter 25 as indicated above, it is argued, it is clearly excluded from the purview of Chapter 28. 6. In the light of the above arguments, it becomes necessary to determine the scope of item (3) under Chapter 25, Heading 25.03. Prima facie, it may appear that the appellant's contention that the goods should be classified under an item which directly seems to cover its description has to be accepted. However, on behalf of the department, it is pointed out that Section V in which Chapter 25 occurs deals with mineral products and our attention is drawn to Note 1 for the interpretation of the items under Chapter 25, which reads thus : "Except where the context....
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.... in Note (1) to Chapter 25 C.T.A. The description of the goods in the import document is "Electrolytic Manganese Dioxide for dry Battery - MnO2 - 91%". The Laboratory test report confirms these as Manganese Dioxide of declared purity. The chapter (note) no. 1 of Chapter 25 states that `except where the context otherwise requires', the goods should satisfy the definition given therein. It is a fact that various grades of manganese dioxide exist and only few are suitable for use as battery grade. The sub-heading has to be read along with main heading and cannot be read in isolation. Therefore, the main heading covers only crude manganese dioxide in crude form purified only by methods mentioned in Chapter Note 1. The item imported is El....
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....ic manganese dioxide are different items, separately classified. For example, under the import policy while item 140 refers to "electrolytic manganese dioxide", item 220 talks of "manganese dioxide, chemical/synthetic/monda grade/natural". Battery grade manganese dioxide, in its crude or raw form has also been found to be a commodity dealt with in international trade, though said to be slowly depleting. The manganese dioxide imported by the appellant is electrolytic manganese dioxide which is manufactured from the ore by a process of electrolysis. It is stated in the literature produced by the appellant - and this is not in dispute - that the same is obtained by a process of not only grinding, dissolving, washing, crushing, neutralising and....
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.... only the crude, raw or physically changed forms are to be taken into account - unless there is something in the nature of the entry which precludes the applicability of Note 1. Thus, for example, if battery grade manganese dioxide were not available for import, except in the upgraded form, the assessees' claim would be well founded and it will be covered by item 25.01/32(3) even though manufactured under an electrolytic process. But since it has been found as a fact that battery grade manganese dioxide is available in the crude unrefined form only that type of it is covered by Item 25.01/32(3). In view of the interpretation placed by us on Item 25.01/32, it is unnecessary to discuss the decision cited by Shri Sampath setting out certai....