ORDER
Lajja Ram, Member (T)
1. M/s. Hindustan Aeronautics Ltd. (HAL) being aggrieved with two separate orders-in-appeal passed by the Collector of Customs, Madras have filed these four appeals. The Appeal No. C/1636/90-B2 and Appeal No. C/1637/90-B2 are listed today for hearing. The Appeal bearing No. C/1527/90-B2 and appeal bearing No. C/2104/90-B2 are not listed today. Shri M.L. Malviya, Chief Manager and Shri R.N. Ojha, Senior Assistant Supervisor appearing for M/s. HAL submitted that the issue for consideration in all these appeals is similar; they have come from (Koraput) Orissa for attending these hearings and it would be in the interest of justice if the two appeals not listed today are also taken up for hearing.
2. Shri S.N. Ojha, JDR appearing for the respondent Revenue had no objection. With the consent of both the sides, therefore these two appeals bearing No. C/2104/90-B2 and C/1527/90-B2 are also taken up for hearing.
3. The matter in all these four appeals relate to the eligibility of the raw materials imported by M/s. HAL to the benefit of exemption Notification No. 211/77-Cus., dated 15-10-1977 as amended by Notification No. 233/77-Cus., dated 1-11-1977. M/s. HAL had imported raw materials namely steel ingots, pig iron, steel scrap, nickel ingots, magnesium, aluminium ingots, wire mesh, ferro molybdenum, ferro chrome, etc. They claimed the benefit of exemption Notification No. 211 /77-Cus. which was denied to them on the ground that the goods imported were not covered by the description as given in the table annexed to that notification.
4. We have heard Shri M.L. Malviya, Chief Manager and Shri R.N. Ojha, Senior Assistant Supervisor for the appellants. Shri S.N. Ojha, JDR represented the respondents revenue.
5. The representative of the appellants submitted that the imports had been made by the HAL for defence purposes. The goods imported, according to them were covered by the description as given in the notification. They argued that the expression “alloys” appearing in S. No. 1 of the table was independent and covered the goods imported. They also pleaded that the ingots were the product of castings and therefore are covered by the expression ‘castings’ in S. No. II of the table annexed to the said notification. They submitted that in respect of some other similar consignments, Revenue had already granted them the benefit of exemption. Reference was also made to the order passed by the Collector of Customs (Appeals), Hyderabad where a view has been taken that the ingots were covered by the expression ‘castings’.
6. In reply Shri S.N. Ojha, JDR submitted that the expression “alloys” in S. No. 1 of the table was not independent and that the expression “of ferrous and non-ferrous metals and alloys” covers only the products mentioned earlier, that is coils, strips, sheets, rods, bars, extrusions, wires and tubes. He also submitted that the expression “castings” is in conjunction with stampings and forgings and by castings was meant the cast goods and not the ingots which were separately described in the Customs tariff. He pleaded that the view taken by the lower authorities were correct and as the exemption notification was worded, the goods imported were not covered by the said exemption.
7. We have carefully considered the matter. Under exemption Notification No. 211/77-Cus., dated 15-10-1977 as amended by Notification No. 233/77-Cus., dated 1-11-1977, the goods specified in the table annexed to that notification when imported into India for use in the manufacture of aircrafts including Helicopters were eligible for exemption from the basic customs duty, and the additional duty of customs subject to specified conditions. The goods covered by the said exemption were listed in the table annexed to that notification. The table is extracted below:
Coils, strips, sheets, rods, bars, extrusions, wires, tubes of ferrous and non-ferrous metals and alloys and non-metallic materials such as perspex, plexi glass, glass fibre, rubber and plastic conforming to a aircraft or aerospace specifications.
(ii) Castings, stampings and forgings of ferrous and non-ferrous alloys conforming to aircraft or aerospace specifications.
8. The goods which are under dispute had been described by the importers as under :-
“Steel ingots, pig iron, steel scrap, iron shots, steel wiremesh, steel flexible hose, ferromanganese, ferrochrome, silica calcium, lowcarbon ferrochrome, copper alloy, aluminium, nickel, magnesium ferromolybdenum nickel alloy x C6K, Silicon, Ferronibium, lead and non-metallic material like asbestos cord and sheet.”
9. The goods imported are not in the form of coils, strips, sheets, rods, bars, extrusions, wires and tubes. The appellants had contended that as the products imported by them were manufactured from alloys, they should be taken as alloys for the purposes of the said notification. We consider that the expression “alloys” is not independent and refer to the various products listed in S. No. 1 of the table, already extracted above. The term “alloys” had to be understood with reference to the constituent metals of coils, strips etc. for the purpose of the Customs Tariff, alloy means the alloy of the metal which predominates by weight over each of the other metals.
10. Ingots are a separate commodity and during the relevant time were classifiable under Heading No. 7304.06 or 7304.07. It was explained in the Chapter Note G of Chapter 73 that the ingots were the products for rolling or forging obtained by casting into moulds. The casting moulds does not make the ingots as castings or cast goods which during the relevant time were classifiable under Heading No. 73.33/40.2 of the tariff. In the BTN it had been explained that the ingots are the primary form into which the metal is cast after production by the various processes. They are usually square rectangular or octangular in cross-section and one end is thicker other than the other to facilitate removal from the moulds. They are primary products which are subsequently rolled or forged into blooms, billets, slabs, bars, coils sheets and other products.
11. The ingots are different from the cast iron which is the pig iron which had been remelted for convenience and to obtain a certain type of refining blending or alloying. The expression cast iron did not extend to shaped or worked articles.
12. The appellants have also pleaded that their goods in dispute were covered by the expression castings in S. No. II of the table. Castings are different than the ingots which are obtained when metal is cast after production by different processes. The castings refer to the products which are in the nature of cast goods. In the BTN the example of the cast goods has been given as inspection traps, gratings, drain covers and similar insert for sewage, water etc. systems; high hydrent pillars and cover balls for using in the grinder, crushing mills crucibles etc.
13. It is also seen that the expression castings had been used in the exemption notification in the company of stamping and forgings. In view of the rule of interpretation the castings had to be understood as the product having a distinct identity.
14. In the case of Tata Iron and Steel Co. Ltd. v. Union of India reported in 1988 (35) E.L.T. 605 (S.C.), the Supreme Court dealt with the classification of iron and steel wheels tyres and axles of railways which were manufactured by the process of forgings. The Supreme Court observed that the goods had been manufactured according to specifications and drawings agreed to between the Indian Railways and the TISCO. The axles were supplied to the Railways in rough machined conditions and wheels tyres and blanks were supplied in as rolled/forged condition. It is clear that the expression like castings and forgings referred to the products and not to the primary products like ingots which are subsequently processed into different unfinished/finished products.
15. The appellants have pleaded that in some earlier Bills of Entry, the benefit of the exemption had been provided to steel alloys ingots and other similar products. We find that in the Bill of Entry produced for our examination the goods have been referred to as raw materials while it had been explained that in their documents the goods had been mentioned as scrap ingots etc. We find that the description as in the Bill of Entry was not categorical. As we are only concerned with the products which are in dispute in these proceedings and as we have discussed the exemption notification in detail, we consider that the ingots could not be considered as castings.
16. A reference has also been made to the orders passed by the Collector of Customs (Appeals), Hyderabad where a view has been taken that the ingots were one of the castings. As this order-in-appeal is not before us it may not be proper for us to make any observations with regard to the merits of the case in that appeal. We have dealt with the expression castings as appearing in the exemption notification in the company of stampings and forgings and have come to a view that the castings were not the same as ingots.
17. We are conscious that the goods in dispute had been imported by the Hindustan Aeronautics Ltd. which is a Government of India undertaking and the goods were for use in the manufacture of Defence Aircrafts. The notification however has to be construed strictly and in terms of expression in use. We find that the scope of the exemption is restricted and the notification is not widely worded. Only specified goods find mention in the exemption notification and the benefit is not available to the goods which are not specifically covered by the table annexed to that notification.
18. Taking all the relevant facts and considerations into account, we consider that the disputed goods were not covered by the exemption Notification No. 211/77-Cus., dated 15-10-1977 as amended. As a result all the four appeals are rejected. Ordered accordingly.