1992(02)LCX0083

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

S/Shri G.P. Agarwal, Member (J) and N.K. Bajpai, Member (T)

LML FIBRES

Versus

COLLECTOR OF CUSTOMS

Order No. 48/92-C, dated 24-2-1992 in C/A-No. 2118/90-C

Advocated By: Shri R. Santhanam, Advocate, for the Appellants.

Smt. Ananta Ray, SDR, for the Respondents.

[Order per : N.K. Bajpai, Member (T)]. - This is an appeal against the orders of the lower authorities rejecting the claim of the appellants for reassessment and consequential refund of duty on a grinding set imported by them and assessed to duty under sub-heading 4016.93 as “Gaskets, Washers and other seals”. The appellant claimed re-assessment under Tariff Heading 98.06 read with Heading 8474.20 and the benefit of exemption under Notification 69/87-Cus., dated 1-3-1987 on the ground that this was classifiable as crushing and grinding machines and, being parts of such machines, they were entitled to the exemption under the notification. Both the authorities have denied the exemption on the ground that being parts of general use they are not eligible for this classification in terms of Note 7(d) of Chapter 98 as defined in Note 2 to Section XV and were also excluded from Notification 257/88-Cus., dated 21-9-1988. Collector (Appeals) has taken the further view that they cannot be assessed under Section 19 of the Customs Act because itemwise value of the goods were not available at the time of import and any subsequent amendment in the Bill of Entry is not permissible under Section 149 ibid.

2. The appellants have submitted that the previous import of the same goods was assessed in the same Custom House as now claimed by them and on the basis of the technical literature and write up there was no reason for the authorities to take a different view. The violation of the principles of natural justice is not having granted hearing before rejecting the claim for re-assessment has also been cited in the appeal.

3. Shri R. Santhanam, the learned Counsel for the appellants submitted that grinding set cannot be broken up into parts and was imported only for replacement. It could not therefore be treated as one of general use.

4. Smt. Ananya Ray, learned SDR submitted that sub-heading 8474.20 was not available because the machinery in which the griding set is used has been described in the suppliers’ invoice as “Spares for Polymerisation Chips Manufacturing Plant” and such a plant was outside the scope of the sub-heading. She also submitted that in view of the provisions of Section 19(b) of the Customs Act and Rule 3 ‘of the Rules for the interpretation of the Customs Tariff, composite goods consisting of different materials or made up of different components and goods put up in sets for retail sales have to be classified as if they consisted of the material or component which gives them their essential character. She submitted that since ‘O’ ring is made of rubber, it is this article which gives the essential character to the goods and, therefore, the classification under sub-heading 40.16.93 was fully justified.

5. We have carefully considered the appeal, the submissions made at the hearing and have perused the case records. It is true that a previous import of the subject goods was classified under sub-heading 98.06 read with 8474.20 with benefit of exemption Notification 69/87-Cus., dated 1-3-1987. But, since the question of classification is now before us, we have to decide it correctly. It appears that there is a specific heading for general purpose crushing and grinding machines in sub-heading 8479.82. Heading 84.79 relates to Machines and Mechanical Appliances having individual functions not specified or included elsewhere in Chapter 84 and sub-heading 8479.82 refers to crushing and grinding machines. In the face of a specific heading for the goods available in the Tariff, there is no reason why one should take recourse to Section 19 and other provisions. The Alphabetical Index to the HSN also shown on page 432 that general purpose crushing and grinding machines not elsewhere specified or included fall under sub-heading 8479.82. Since the goods imported are grinding set which is not a complete machine, their reassessment has been claimed as “Parts of machinery and articles of Chapter 84" under sub-heading 98.06. The machine itself being classifiable under sub-heading 84.79.82, its parts are rightly classifiable under 9806.00 read with this sub-heading. The further claim in the appeal is for exemption under Notification 69/87-Cus., dated 1-3-1987. We observe that this notification exempts parts falling under Heading 98.06 of the goods specified, inter alia, under Heading 84.79 (refer to serial No. 19 of the Table appended to the notification). Thus, the subject goods which merit classification under sub-heading 9806.00 read with sub-heading 8479.82 are entitled to exemption under Notification 69/87-Cus., dated 1-3-1987. The orders of the lower authorities are set aside and the appeal is allowed as indicated here, with consequential relief.

Equivalent 1993 (66) ELT 251 (Tribunal)