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CASE NO.: Appeal (civil)  5799 of 2002

PETITIONER: Orient Ceramics & Inds. Ltd

RESPONDENT: Commissioner of Customs, New Delhi

DATE OF JUDGMENT: 29/04/2008

BENCH: ASHOK BHAN & J.M. PANCHAL

JUDGMENT: J U D G M E N T Reportable

CIVIL APPEAL NO. 5799 OF 2002

BHAN, J.

1.      This Appeal has been filed u/s. 35L(b) of the  Central Excise Act, 1944 (hereinafter referred to as the  ’Act’) against the Final Order No. 126/2002-D dated  08.05.2002 in Appeal No. C/411/2001-D passed by the  Customs, Excise and Gold (Control) Appellate Tribunal,  New Delhi (hereinafter referred to as ’Tribunal’)  rejecting  the appeal filed by the appellants.

2.      Appellants imported two consignments of unglazed  porcelain tiles, as per appellants, vide Bills of Entry  No. 113197 dated 24.10.2000 and No. 113056 dated  23.10.2000. In these two Bills of Entry, the appellants  claimed classification of the tiles under sub-heading  6907.90 of the Customs Tariff Schedule. Since goods  falling under sub-heading 6907.90 were freely importable  without any license, appellants sought clearance of the  same on payment of appropriate customs duty in terms of  para 5.1 of the Exim Policy 1997-2002. The Bill of Entry  was assessed as per declaration made by the appellants.  After the payment of duty so assessed, the Bill of Entry  was presented in the import shed for physical examination  where the goods were examined in the presence of the  appellant’s representative. On examination, it appeared  that the goods were glazed tiles. Such tiles were  classifiable under heading 6908.90 of the Customs Tariff  Schedule and being restricted for importation as per  classification, could not be imported without proper  license. The appellants requested for the provisional  release of the goods against the P.D. test bond pending  finalization as per test report from Central Revenue  Control Laboratory (hereinafter referred to as the  "CRCL"). The request of the appellants was accepted and  the goods were released to them provisionally.  

3.      The representative samples of the goods were drawn  and sealed in their presence and sent to CRCL for test.  The test report revealed that the goods had  characteristics of glazed tiles. Show cause notice was  accordingly issued to the appellants for the confiscation  of the goods and for imposition of penalty on them. The  appellants, however, contested the correctness of that

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notice and also submitted manufacturing process of the  unglazed tiles. It was also requested by the appellants  that the goods may be sent to the Central Glass and  Ceramics Research Institute, Calcutta for test. The  request made by the appellants for sending the goods to  Central Glass and Ceramics Research Institute, Calcutta  was rejected. After considering the material on record,  the Commissioner of Customs, held the goods to be  porcelain glazed tiles and ordered confiscation of the  same having been imported without license and also  imposed penalty of Rs. 10,00,000/- on the appellants.          4.      Aggrieved against the order passed by the  Commissioner of Customs, the appellants filed appeals  before the Tribunal which have been dismissed by the  impugned order.

5.      The point involved in the present appeal relates to  the classification of goods in question under Indian  Trade Classification (Harmonized System) [ITC (HS)]  Policy. There is no dispute regarding rate of duty  payable thereon. But depending on the classification, the  goods will either fall under restricted list or free list  of import. As per the appellants, the imported goods were  unglazed porcelain tiles classifiable under heading  6907.90 and as such, could be imported without license.  

6.      To substantiate this plea raised by the appellants,  reliance was placed on the manufacturing process supplied  to the appellants by the manufacturer and the distinction  between unglazed and glazed tiles. Admittedly, the  representative samples of the goods were drawn and sealed  in the presence of the appellants. The samples were sent  to CRCL for 2nd time for test. The CRCL again pointed out  that the samples had the characteristics of glazed tiles.  The second report was given by the Director of the CRCL,  which was conveyed to the appellants vide letter dated  27.02.2001. The relevant portion of the CRCL report reads  as under:- "The imperviousness test and chemical  resistance test on the samples, have  been concluded in this laboratory as  prescribed in the ASTM Methods and  found to satisfy the conditions as laid  down in respect of glazed tiles. The  test for water absorption as laid down  in the I.S. has also been conducted and  found to absorb appreciable quantity of  water. In view of above facts it is  clear that the samples under reference  are other than unglazed ceramic tiles  as claimed and hence the test as per  ISO as indicated in your letter may not  be necessary for further confirmation  in this regard."

7.      The appellants in their reply to the show cause  notice have brought out the distinction between unglazed  and glazed tiles as under: -

"...While porcelain unglazed tiles are  almost completely vitrified and would  absorb no water (impermeable) glazed  tiles have a porous body permeable to

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water..."

8.      The manufacturing process supplied by the  manufacturer which was in turn given to the Customs  Authorities by the appellants vide letter dated  23.12.2000 also brings out the distinction between the  glazed and unglazed tiles. Even in the subsequent  communication dated 30.01.2001, the same very distinction  was reiterated. The relevant portion of the letter reads  as under: -

"...There are clear distinctions  between porcelain unglazed tiles and  glazed tiles from the point of view of  their nature and compositions. While  porcelain unglazed tiles are almost  completely vitrified and would absorb  no water (impermeable), glazed tiles  have a porous body permeable to  water..."

9.      From the reading of the report of CRCL and the  distinction between the unglazed and glazed tiles pointed  out by the appellants in their correspondence with the  Department, it is evident that the imported goods were  not unglazed but glazed which was classifiable under  tariff heading 6908.90.  License of import for such goods  was required, as per policy, before importing which the  appellants admittedly did not have.     In view of the  report submitted by the CRCL, which is an expert body, we  are of the opinion that the tiles imported by the  appellants were glazed tiles and were liable to be  classified under tariff heading 6908.90.  Reasons  recorded by the Tribunal in affirming the order passed by  the Commissioner of Customs are perfectly valid and we do  not find any reason to disagree with the same.

10.     Counsel for the appellants, in order to wriggle out  of the restricted list of the imports, then contended  that if the goods were not classifiable under tariff  heading 6907.90, then the goods were classifiable under  tariff item 6914.10 as per classification issued by the  Director General of Foreign Trade (DGFT). In ground ’C’  of the grounds of appeal, the appellant has itself  admitted that the difference between the ceramics and  porcelain is brought out from the technical literature  from the World Book Encyclopedia, copies of which have  been attached as annexure to the appeal. While ceramics  are made from minerals such as clay, feldspar, silica and  talc, the porcelain is made out from a mixture of  ingredients like kaolin, petuntse. Kaolin is a pure white  clay and petuntse is a type of felt spar found only in  China. It has not been proved by the appellants that the  tiles imported by it were made from the mixture of  ingredients like kaoline and petuntse. His case was that  tiles imported by it were unglazed ceramic tiles. Since,  the material which goes into production in the ceramic  tiles and porcelain tiles is different, in the absence of  any material to show that the tiles manufactured by the  appellants were porcelain tiles made out of kaolin and  petuntse, it cannot be held that the tiles imported by  the appellants were other ceramic articles falling under  tariff entry 6914.10.  We do not find any substance in

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the plea that the goods imported by the appellants would  fall under Entry 6914.  Entry 6914 pertains to ‘other  ceramic articles’ and tariff sub-heading 6914.10 deals  with other ceramic articles made of ‘porcelain or china’.   We have come to the conclusion that the goods imported by  the appellants were classifiable under tariff heading  6908.90.  As the items imported by the appellants are  specifically covered by tariff heading 6908.90, the same  cannot be brought under the residuary clause 6914.  Appellants, in their Bills of Entry, did not claim  classification under heading 6914.10. They claimed the  classification under tariff heading 6907.90 as unglazed  tiles. It had never been their case that the goods were  not tiles or that they were "other ceramic articles"  referred to in the DGFT classification under sub-heading  6914.10.

11.     For the reasons stated above, we do not find any  merit in this appeal and dismiss the same leaving the  parties to bear their own costs.