Toshiba
Anand Batteries Ltd. Vs. Collector of Customs, Cochin [1990] INSC 395 (20 December 1990)
Rangnathan,
S. Rangnathan, S.
Kasliwal, N.M.
(J) Agrawal, S.C. (J)
CITATION:
1990 SCR Supl. (3) 614 1992 SCC Supl. (1) 38 JT 1991 (1) 14 1990 SCALE (2)1293
ACT:
Customs
Tariff Act, 1975: Item Nos. 25.01/32 and 28.01/58-Battery grade Manganese
dioxide--Classification for custom duty--Not he ore contents in its crude form
but ore contents in the form purified or upgraded by electrolysis.
HEAD NOTE:
The
appellant-assessee in the appeals is a manufacturer of dry patteries. For this
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 Act, 1975 whereas the revenue
authority says that the tem imported falls under heading 28.01/58. The rate of
duty under both the headings is the same, but if the item is classified under
28.01/58 the assessee would be liable to pay counter- vailing duty as well.
The
Assistant Collector's findings that Note 1 for the interpretation of items
under Chapter 25, clearly exclude the goods imported by the appellant, were
revised by the Collector (Appeals), but confirmed the Tribunal, holding that
various grades of manganese dioxide exist and only few are suitable for use as
battery grade, that the item import- ed by the appellant is Electrolytic
Manganese Dioxide of very high purity and this chemically pure Manganese
Dioxide would qualify for assessment correctly under heading 28.01/58(1), of
the Tariff with Countervailing duty under Item 68 of the Central Excise Tariff.
On the
question, under which of the two headings in the first schedule to the Customs
Tariff Act, 1975 the goods in question fall for the purposes of levy of duty:
Dismissing
the appeals, the Court,
HELD:
1. In view of Note 1 to Chapter 25, Item (3) under heading 25.01/32 has to be
understood, unless the context requires otherwise to refer to the goods
described therein either in their crude state or in a 615 purified state
provided the processes of purification em- ployed are only mechanical or
physical processes, particu- larly those mentioned in the said note. [619G] In
the instant case, this raises two questions: (1) whether battery grade
manganese dioxide is available in the crude form, and
(ii) if
the goods in question represent manganese dioxide in a purified form, whether
the processes applied for the purification or refinement are the processes
permissible under note 1. The evidence on record compels an answer to each of
the questions against the appellant. [619H]
2.
Although the product imported by the appellant is battery grade manganese
dioxide, it does not fail under heading 25.01/32 because it is not the ore in
its crude form but is the ore in a form purified or upgraded by electrolysis.
Once the applicability of chapter 25 is out for this reason, the only item that
can cover the goods in question is heading 28.01/58, since there is no dispute
that the item in question is a chemical product or chemical compound. [621C-D]
3. The
manganese dioxide imported by the appellant is electrolytic manganese dioxide
which is manufactured from the ore by a process of electrolysis. [620C]
4.
Purification or upgradation of the manganese dioxide content of crude ore by
the process of electrolysis, which is a chemical and not a mechanical or
physical process takes it outside the purview of item 25.01/32. [620D]
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