TaxTMI 
TaxTMI 
1990 (12) TMI 77
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....le 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 Department, the assessee will be liable to ....
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....es, 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" covering Chapters 28 to 38. Chapter 28 deals with "Inorganic chemicals; organic and inorganic compounds of precious metals, of rare earth metals, of radio-active eleme....
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....e 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 otherwise requires, this chapter is to be taken to apply only to goods which are in the crude state or which have been washed (even with chemical substances eliminating the impurities wit....
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....se 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 Electrolytic Manganese Dioxide of very high purity and this chemically pure Manganese Dioxide would therefore qualify for assessment correctly under chapter Heading 28.01/58(1), C.T.A. with c.v. d....
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....e, 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 pulverising but also of electrolysis. The product thus obtained, it is said, has also uses other than in dry batteries. Purification or upgradation of the manganese dioxide content of crude ore b....