ORDER
U.L. Bhat, J. (President)
1. Respondent imported specially made steel tubes for use as parts of heat exchangers and submitted bill of entry dated 10-10-1994 suggesting classification under Chapter sub-heading 8419.90 and claiming benefit of Notification 62/94. The Assistant Collector held that the steel tubes imported remained steel tubes though they are to be used in heat exchangers and therefore, fell under Chapter Heading 73.04 as articles of steels and Notification 62/94 would not apply. The Collector (Appeals), reversed his decision and held in favour of the respondent. This order is now challenged by the department.
2. Chapter 73 deals with articles of iron and steel. Chapter Heading 73.04 deals with tubes, pipes and hollow profiles, seamless, of iron (other than cast iron) or steel. Chapter 84 relates to “nuclear reactors, boiler, machinery and mechanical appliances; parts thereof”. Chapter Heading 84.19 takes in “machinery, plant or laboratory equipment, whether or not electrically heated, for the treatment of materials by a process involving a change of temperature, other than machinery or plant of a kind used for domestic purposes; instantaneous or storage water heaters, non-electric”. Sub-heading 90 takes in parts. The question is whether the imported goods are steel tubes falling under Chapter Headings 73.04 or parts of heat exchangers falling under sub-heading 8419.90. Though elaborate arguments were advanced before the lower authorities and these arguments were taken note of, these orders do not indicate application of mind by the authorities on the relevant aspects. Collector (Appeals) has relied on the HSN explanatory note at page 1178 where it is stated as follows :-
“Metal tubes and pipes which have been bent or curved, but not otherwise worked, presented unassembled are not identifiable as parts of this heading and are therefore to be classified under Section XV”.
Chapter 73 is one of the Chapters under Section XV. If the above note is applicable to the imported goods, they will be covered by Chapter 73 and not Chapter 84. The crucial aspect is whether these metal tubes were “otherwise worked”. If they were “otherwise worked”, they will remain in Chapter 84 and if they were not “otherwise worked”, they will attract Chapter 73.
3. Respondent relied on the invoice to say that the steel tubes in question were subjected to various processes. We find that the portion which the respondent relied upon is in French and no translation is available. The impugned orders also do not refer to the contents of the invoice. There is therefore reason to assume that the lower authorities also did not have the benefit of understanding the contents of the invoice.
4. Respondent has produced before us copy of the fax message obtained from the manufacturer recently. It says that the manufacturers had subjected the steel tubes in question to two operations namely, normalising heat treatment at 925°C as per ASME SA 213 T1l and tempering heat treatment at 750°C as per ASME SA 213 T1l. The lower authorities had no opportunity to consider this material and to verify whether by subjecting steel tubes to these two processes, they could be said to have been “otherwise worked ” with the meaning of HSN explanatory notes at page 1178. In the circumstances, we are of the opinion that the matter should be re-examined.
5. The Department has placed reliance on the decision in the case of Esskay Machinery Pvt. Ltd. v. Collector of Customs, Calcutta reported in 1996 (88) E.L.T. 779 (Tribunal). The decision related to steel tubes of special quality withstanding very high temperature to be used as machinery part described as “recuperator”. The Bench referred to HSN explanatory note at page 1178 but did not consider whether the metal tubes in question have been “otherwise worked”.
It came to the conclusion that the tubes were made of definite specifications and special quality steel but nevertheless fell under general category of pipes and tubes of steel falling under Tariff Heading 7304.49. Respondent has relied on the decision of the Tribunal in the case of Bharat Heavy Electricals Limited reported in 1984 (16) E.L.T. 355 (Tribunal) where it was held that the seamless carbon steel tubes of special quality and specification would fall under Chapter Heading 84.17(1). Respondent also placed reliance on the Final Order No. E/507/97-B, dated 21-3-1997 where the Bench held that tubular steel coils for use in super heaters, economisers etc. would be classified under Chapter Heading 84.04. The Bench considered the corresponding explanatory note in BTN and held that the goods had lost the character of tubing and were specifically parts of super heaters etc. We find that the aspect whether the tubes were “otherwise worked” was also not specifically considered in this order.
6. The question is about the processes, if any, to which the tubes had been subjected and whether tubes when subjected to those processes could be said to have been “otherwise worked” within the meaning of HSN explanatory note. This aspect has to be inquired into and considered by the Adjudicating Authority. It is open to the Department as well as the importer to place additional material before the Adjudicating Authority to throw light on the controversy.
7. For the reasons referred to above, we set aside the impugned order and remand the case to the jurisdictional authority for decision afresh after giving the respondent an opportunity of personal hearing. If there are any new materials on which the Department proposes to rely, copies of the same may be made available to the importer before personal hearing.