1986(12)LCX0067

BEFORE THE CEGAT, SPECIAL BENCH ‘B2’, NEW DELHI

Smt. S. Duggal, Member (J), S/Shri I.J. Rao, Member (T) and D.C. Mandal, Member (T)

COLLECTOR OF CUSTOMS, BOMBAY

Versus

SPACO CARBURETTORS

Order No, 1255/86-B2, dated 5-12-1986

Advocated By :  Shri J. Gopi Nath, SDR, for the Appellant.

S/Shri F.H.J. Taleyar Khan with R.K. Krishnamurthi, Advocate, for the Respondent.

[Order per : D.C. Mandal]. - In this appeal the classification for customs duty in respect of “Special purpose complex machine to plug carburettor body S.I. complete with set of checking instruments for leakage and preparing of Assembly” is in dispute. Assistant Collector of Customs, Bombay classified the goods under Tariff Heading 84.59 (1) of the C.T.A., 1975. On appeal filed against the order of the Assistant Collector, the Collector of Customs (Appeals) held that assessment of the imported machine to customs duty should have been properly done under Heading 84.59 (2) of Customs Tariff Act, or failing that under Heading 84.45/48. The Collector (Appeals) set aside the order of the Assistant Collector and allowed the appeal filed by the appellants. The present appeal before us has been filed by the Collector of Customs, Bombay against the said order of the Collector (Appeals).

2. During the hearing before us Shri J. Gopi Nath, learned S.D.R. has argued for the Appellant - Collector and Shri F.H.J. Taleyar Khan, learned Advocate has argued for the respondents.

3. The gist of the arugments of Shri J. Gopi Nath is that the functions of the imported machine are;

(i) to plug the hole in the Carburettor body with lead shorts,

(ii) inside projected lead is trimmed,

(iii) outside portion of lead shots is flattened and

(iv) checking whether lead shot is perfectly fitted and is air tight.

The machine performing these functions does not fall within the purview of Tariff Heading 84.45/48 of the C.T.A., 1975 which provides for classification, inter-alia, of machine tools for working metal or metal carbides, stone, ceramics, concrete, asbestos-cement and like mineral materials, etc. In Mc Graw’s Hill Dictionary of Scientific and Technical Terms - Second Edition page 956 machine tools has been defined as “A stationary power-driven machine for shaping, cutting, turning, boring, drilling, grinding, or polishing of solid parts, especially metals”. Against Heading 84.45 in Chapter 84 of the Customs Co-operation Council, Nomenclature Explanatory Notes, Volume-3, at page 1324, Machine-tools for working metal or metal carbides have been described as machines used for shaping or surface-working metal or metal carbides by either :

(i) Cutting away or otherwise removing metal or metal carbides (e.g. lathes, drilling, planing, slotting, milling or grinding machines),

or

(ii) Changing the shape or form of the metal without removing any of it (e.g., presses, hammers, wire-drawing machines).

The imported machine is special purpose machine to plug carburettor body. It is not capable of doing aforesaid functions. The machine in question can not, therefore, be considered to be a machine-tool for working metal as envisaged in Tariff Heading 84.45/48. The imported machine does not fit in the definition of machine tools. It does not employ contract tools. It is a composite machine falling under Tariff Heading 84.59. According to Section Note 3 of Section XVI of the First Schedule to the Customs Tariff Act, composite machines are to be classified as if consisting only of that component or as being that machine which performs the principal function. Chapter Note 5 of Chapter 84 of the Customs Tariff says that a machine which is used for more than one purpose is, for the purposes of classification, to be treated as if its principal purpose were its sole purpose. The purpose of this machine is to plug the hole of carburettor body. This is an individual function of a machine which does not fall within the purview of any other Heading of Chapter 84 of the C.T.A. This machine is not designed for the production of a commodity or for treating metals, wood or similar materials and as such, it can not fall within the purview of Tariff Heading 59 (2). Consequently, the machine falls under sub-heading (i) of Heading 84.59 as decided by the Assistant Collector. The Collector (Appeals) has not applied his mind in deciding the classification. He was also not sure about the correct classification and that is why he has held that the machine would fall under heading 84.59 (2) or failing that under Heading 84.45/48. Drawings submitted by the respondent cannot be correlated or connected with the impugned machine. Hence, the same should not be relied upon.

4. The gist of the arguments of the learned Advocate for the respondents is as follows :

The imported machine has various functions. Through the hole of carburattor nozzle is inserted in the solid lead block. Nozzle is then reamed through the hole. Then the hole is plugged. Then checking is done to see whether plugging is air tight. Then a numbering is done. All these complex functions are performed by this machine. It is a machine-tool and it works on metal. Plugging the hole is treating metal within the purview of sub-heading (2) of Heading 84.59. Sub-heading (i) of Heading 84.59 is a residuary heading and it should not be resorted to. Chartered Engineer’s certificate was produced before the Assistant Collector of Customs in support of the contention of the appellant and Chartered Engineer Brig. Soli B. Jambusarwalla (Retd.) was also produced before the Assistant Collector for cross-examination with reference to the certificate granted by him. The Assistant Collector neither discussed about the certificate in his Order-in-original nor he cross-examined Shri Jambusarwalla. Drawings were also produced before the Assistant Collector. He did not also comment on the drawings. In view of the functions performed by the machine, it should be classified under Heading 84.59 (2) or alternatively under Heading 84.45/48. In the case of Machine Tools (India) Ltd., Calcutta v. Collector of Customs, Calcutta reported in. 1984 (16) ELT 363, this Tribunal held that Funditor marking machine was classifiable under Heading 84.45/48 and not under Heading 84.59 (1) of the C.T.A., 1975, as the said machine was nothing but a stamping/embossing machine to be worked under pressure for marking code numbers, trade marks, graduation etc. on tough materials like metals without removing any of the metal. In the said decision the Tribunal did not follow the criteria of cutting, removal etc. although similar arguments as in the present case were addressed on behalf of the appellants.

5.  In reply to the arguments advanced by the learned Advocate, Shri J. Gopinath has stated that the respondents submitted the drawings of the first machine to the Assistant Collector and not of the machine covered by this appeal. The part number etc. does not figure in the invoice submitted by the respondents.

6. We have considered the records of the case and the arguments of both sides carefully. We find that the imported machine was described in the relevant bill of entry and the invoice as special purpose complex machine to plug carburettor body S.I. complete with set of checking instruments for leakage and preparing for assembly. The goods as per invoice and the bill of entry cannot be correlated with the photograph and layout of the machine submitted by the respondents. The respondents have not submitted any catalogue as, it is stated, the machine was tailor made as per their order specification. As directed by us during the hearing, they submitted a copy of the purchase Order No. IMP 191 dated 20-7-1984, which shows the description of the goods, as indicated above. It is an admitted fact that the function of the machine is to plug the holes in the carburettor body with the help of lead shots. The contention of the responents is that the machine has other functions like trimming operation on the excess lead, checking to ensure that the plugging of the holes is airtight and the marking of number and identification code on the carburettor. The functions of the machine are also stated in the certificate dated 22-6-1985 granted by Shri B. Jambusarwalla, Chartered Engineer. The respondents have pleaded that these functions fall within the B.T.N. Heading 84.45/48 and hence the machine was assessable under Tariff Heading 84.45/48, or under Heading 84.59 (2) as the plugging of the carburettor holes is treating metal within sub-heading (2) of the Tariff Heading 84.59. Our considered view is that the function of the machine is to plug the holes of carburettor body. The cutting or tyrimming operation is incidental to this function as it removes the extruded portion of the lead shots. The function of checking is also a part of the main function of plugging as the object of checking is to ensure that the plugging has been done perfectly to make it airtight. None of these functions can be considered to be “treating metal” within the meaning of sub-heading (2) of Tariff Heading 84.59. The function of plugging the holes of carburettor body does not amount to working metal. It does not change the shape or form of the metal. The portion of the machine which cuts the extruded portion of lead shot is not a reaming machine working the internal surface of an existing hole to exact dimension within the meaning of Explanatory Note 84.45 (A) (5) of the CCC N (Volume 3), Chapter 84.45. The imported machine in question does not fall within the definition of machine tool given in Mc Graw-Hill Dictionary of Scientific and Technical Terms as cited by the learned S.D.R. Classification of the impugned machine under Tariff Heading 84.45/48 is, therefore, ruled out. Even by taking all the functions of the machine into consideration, the classification for the purpose of customs duty will have to be determined keeping in view Section Note 3 in Section XVI and Chapter Note 5 of Chapter 84 of the First Schedule to the Customs Tariff Act, 1975, according to which the principal function will be the determining factor. The principal function of this machine is to plug the holes of carburettor body. The machine does not fall under any of the Heading of Chapter 84 of the Tariff. Consequently, it will have to be classified under Heading 84.59 of the Tariff. As this machine is not designed for the production or a commodity or for treating metals, it will not fall under sub-heading (2) of Tariff Heading 84.59. As a result, its correct classification will be under sub-heading (1) of Heading 84.59 of the Tariff. We, therefore, hold that the Assistant Collector correctly classified the machine under Heading 84.59 (1) of C.T.A., 1975 and there was no justification to interfere with his order. It appears to us that the Collector (Appeals) was not sure about the correct classification of the goods, as he has not indicated a definite Tariff Heading. He has indicated two alternative Tariff Heading, viz. 84.45/48 or 84.59 (2).

7. The learned Adovcate for the respondents has relied upon this Tribunal’s decision reported in 1984 (16) ELT 363 (Machine Tools (India) Ltd., Calcutta v. Collector of Customs, Calcutta) in support of his argument that the impugned machine falls under Tariff Heading 84.45/48. We find that in the said case, the Funditor Marking Machine was “primarily intended for deep marking tough materials under heavy pressure”, vide paragraph 4 of the Tribunal’s order, whereas in the present case the principal function of the machine is plugging the holes in Carburettor body. The facts of the two cases are, therefore, distinguishable and in the circumstances, we are unable to apply that decision to the present case.

8. The learned advocate has cited paragraph 68 of this Tribunal’s decision in Bakellite Hylam Ltd., Bombay and another v. Collector of Customs, Bombay and another, reported in 1986 (25) ELT 240, to support his argument that the burden of establishing classification is on the revenue. In our opinion, that burden was discharged by the Assistant Collector in his Order-in-original. In this order, we have discussed the reasons for our findings that the correct classification of the machine is Tariff Heading 84.59 (1).

9. In the light of the above discussions, we hold that the impugned order of the Collector (Appeals) should be set aside, the Order-in-original passed by the Assistant Collector should be restored and the appeal filed by the Collector is to be allowed. We order accordingly.

10. The appeal before us is disposed of in the above terms.

Equivalent 1987 (27) ELT 688 (Tribunal)