1989(10)LCX0020

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

 S/Shri Harish Chander, Member (J) and K.S. Venkataramani, Member (T)

COLLECTOR OF CUSTOMS

Versus

MADRAS FERTILIZERS

Order No. 384/89-B2, dated 13-10-1989, in Appeal No. C/2058/83-B2

CASE CITED

SEALOL HINDUSTAN LTD. v. UNION OF INDIA - 1988(03)LCX0051 Eq 1988 (036) ELT 0283 (BOM.)..... [PARA 3]

Advocated By:  Shri M.S. Arora, JDR, for the Appellants.

None, for the Respondent.

[Order per : K.S. Venkataramani, Member (T)]. - The Collector of Customs, Madras has filed this appeal against the order dated 17-5-1983 passed by the Collector of Customs (Appeals) Madras setting aside the order of the Assistant Collector of Customs (Refunds) Madras Customs House dated 5-12-1981 by which the Assistant Collector had rejected a refund claim filed by the respondents herein. The respondents had imported a consignment of ring carbon metal backed which was assessed to duty by the Customs House under Heading 84.64 of Customs Tariff Act as Gaskets. After clearance of the goods on payment of duty, the respondents claimed refund on the ground that the goods were correctly assessable to duty as component parts specially designed for use in ammonia compressor under Heading 84.11(3)-CTA. The claim was rejected by the Assistant Collector as unsubstantiated by evidence to show such special application to compressors. On an appeal against this order, the Collector (Appeals) admitted the appeal holding that the sealing rings are specially designed for and are identifiable parts of compressor. The present appeal is against this order of the Collector (Appeals).

2. Shri M.S. Arora, the learned JDR appearing for the appellant Collector submitted that the goods imported are as per the technical write up used as spare for Iso seals system of the compressor which seals the ammonia gas from leaking into the atmosphere. Its function is same as that of a gasket and judging it functionally the goods according to the department are more appropriately classifiable under Heading 84.64-CTA which covers gaskets and similar joints of metal sheetings combined with other material for engines, pipes, tubes and like. The respondents are absent, but have sent their written submissions in their letter dated 9-8-1989 saying that the item imported is manufactured as component part of the compressor and meant for the exclusive use of the compressor with identifiable part number and cannot be used anywhere as a general purpose item.

3. We have given careful consideration to the submissions made by the learned Departmental Representative and those of the respondents. The goods imported are described as metal backed carbon rings which the department claims is nothing but a gasket functionally and hence had been correctly classified under Heading 84.64-CTA by the Custom House and that the Collector (Appeals)’s order accepting its classification under Heading 84.11(3) which covers “Gas compressors imported for use in refrigerating equipment” is erroneous. On the other hand, we find that the Collector (Appeals) had considered the parts catalogue showing the item at Serial No. 41 thereof [ring metal backed ring (carbon)] as also the drawing and had thereafter concluded that the goods were specially designed ammonia compressor parts assessable under Heading 84.11(3)-CTA. We find that this finding of the Collector (Appeals) is in consonance with the Notes to Section XVI of Customs Tariff Act, 1975 whereunder Note 2 prescribes rules for classification of parts of machines. According to Rule 2(b) parts suitable for use solely or principally with a particular kind of machine are to be classified with the machine of that kind. The department in its appeal has not shown that this Rule is inapplicable or that the functional design as a criterion would over-rule this criterion in the Section Notes for classifying parts of machines. The Collector (Appeals)’s finding is also supported by the decision of the Hon’ble Bombay High Court in the case of Sealol Hindustan Ltd. v. Union of India -1988 (036) ELT 283 wherein the High Court following the Notes to Section XVI-CTA had held that Mechanical Seals specially designed for use in centrifugal pumps or compressors would be assessable as parts of the pumps or compressor under Heading 84.10(1) and 84.11(1) of Customs Tariff Act, 1975. In the result, we see no reason to interfere with the order passed by the Collector (Appeals) and the appeal is, therefore, rejected.

Equivalent 1990 (045) ELT 0339 (Tribunal)