1990(05)LCX0053

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

Shri Harish Chander, Member (J) and Smt. V. Rajamanickam, Member (T)

HINDUSTAN MOTORS LTD.

Versus

COLLECTOR OF CUSTOMS

Order No. 264/90-B2, dated 07-05-1990 in Customs Appeal No. 535/1984-B2

Advocated By : Shri N.C. Sogani, Consultant, for the Appellants.

Shri M.K. Sohal, J.D.R., for the Respondent.

[Order per : V. Rajamanickam, Member (T)]. - The issue in dispute is the assessment of the Boring Bar and Cutting Blades whether under Heading 84.45/48 C.T.A. and Heading 82.06 respectively, as declared in the Bill of Entry or under Heading 82.05 as a composite tool.

2. The appellants have imported the consignment of Boring Bar complete with Cutting Blades for boring machine tool required for boring of Cylinder Block of automobile car and truck. Explaining the position of the boring bar in the machines, Shri N.C. Sogani, Ld. Consultant has argued that the Boring bar is a handle, a tool holder and the cutting blades are inserted according to requirements. These are not inter-changeable tools. Their classification would be appropriately under Heading 84.45/48 as machine tools. He referred to the B.T.N. extract under Heading 84.48, page 1334 as under :-

“Tool holders : which hold, guide or operate the working tool and which permit the interchange of such tool-pieces. They are of very varied types, e.g. : Chucks; tap and drill collets; lathe tool posts; self-opening die-heads; grinding wheel holders; honing bodies for use in honing machines; boring bars."

He produced the photographs of the boring bar and the blades inserted. No catalogue was produced as these were not standard manufactures, and are supplied as per specifications of the buyers.

3. The Ld. J.D.R. Shri M.K. Sohal contended that from the description contained in the invoice and quotations, which have been produced, the 22 sets of Boring Bars fitted with blades were complete sets and were composite items and not individual items for rendering the classification separately under different items of the Tariff. He referred to Rule 2(a) of the Rules for interpretation and argued that unassembled and disassembled articles should be treated as complete articles. That in accordance with Rule 3(b) of the Rules ibid, that which gives the essential character should govern the classification and the blades in the complete set gives the essential character and hence the appropriate classification should be under Chapter-82. He referred to the B.T.N. extract at page 1124 whereby it is stated that composite tools even if detachable would remain a composite article. He referred to the Section Note-XVI. 1J which excludes articles falling under Chapter 82 or 83. Therefore, he advocated the classification under Chapter 82.05 as being the correct heading.

4. From the Bill of Entry, it is seen that the appellants have declared the Boring Bar separately under Chapter 84.45/48 and the Blades as cutting blades falling under 82.05 read with 84.45/48 C.T.A. In explaining the definition of a Tool Holder, as given in the Engineering Encyclopaedia, USA and the Tool Engineering Handbook, USA, the appellants have tried to establish that function and location of the Boring Bar which is a tool holder in the machine and their correct classification would be as a machine tool under Heading 84.45/48. The Collector has stated in his order that from the physical examination of the samples it was seen that the imported goods consisted of working parts of carbide tipped cutters attached to a base metal support by unsetting as detachable parts and that the boring tools are composite tools falling under Chapter 82.05(1). The Heading 82.05 refers to :-

“Interchangeable tools for hand tools, for machine tools or for power-operated hand tools (for example, for pressing, stamping, drilling, tapping, threading, boring, broaching, milling, cutting, turning, dressing, morticing or screw driving), including dies for wire drawing, extrusion dies for metal, and rock drilling bits.”

With reference to B.T.N. Heading 82.05 has the same description and the explanation viz. “the present heading covers an important group of tools which are unsuitable for use independently, but are designed to be fitted as the case may be, into :

(A) hand tools, whether or not mechanical (e.g., breast drills, braces and die-stocks),

(B) machine-tools, of Heading 84.45, 84.46 and 84.47, or falling within Heading 84.59 by reason of Note 5 to Chapter-84,

(C) tools of Headings 84.49 and 85.05 for pressing, stamping, threading, tapping, drilling, boring, reaming, broaching, milling, gear-cutting, turning, cutting, morticing, drawing, etc., metals, metal carbides, wood stone, ebonite, certain plastics or other hard materials, or for screw driving."

The function of boring is referred to therein. Similarly, the Heading 82.05 specifically mentions interchangeable tools for hand tools, for machine tools for boring. Therefore, the heading for the tools imported being specifically covered should gain preference to any other possible classification. Moreover, the composite articles which have been invoiced as a set with tool holder with blades, cannot be classified under different tariff heading. The blades have been designed for use in the boring machine and therefore have to be viewed as one complete article. The department has been correct in holding the view that one single composite article should be assessed as conforming to a single tariff heading and not under different headings part by part. The offence under the I.T.C. has not been disputed as part of the goods are not covered by the goods. The confiscation and fine are therefore in order. The appeal in consequence has no merits and is therefore dismissed.

Equivalent 1990 (48) ELT 586 (Tribunal)