1994(04)LCX0002

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

S/Shri G.P. Agarwal, Member (J) and P.C. Jain, Member (T)

COLLECTOR OF CUSTOMS, BOMBAY

BAJAJ AUTO LTD.

Final Order Nos. C/28-35/94-B2, dated 22-4-1994 in Appeal Nos. C/697/85 and C/289-295/93-B2

Shivaji Castings v. Collector — 1993(05)LCX0045 Eq 1994 (069) ELT 0674 (Tribunal) — Distinguished...... [Paras 6, 7]

REPRESENTED BY :        Shri B.K. Singh, SDR, for the Appellant.

Shri L.B. Attar, Advocate, for the Respondent.

[Order per : P.C. Jain, Member (T)]. - A common order is being passed because a common impugned order is involved.

2. In all these cases, goods imported by the respondents herein are connecting rod forgings or cross-forgings. The original authority, by various orders-in-originals, rejected the claims for reassessment sought for by the respondents under Tariff Heading 73.06/07(2) for basic Customs duty and Tariff Item 26AA under CET as against the original assessment under Tariff Heading 87.09/12(1) (Parts of Motor Vehicles) and Tariff Heading 84.06 (for connecting rods) by invoking the concept of ‘essential character’ under Interpretative Rules of the C.T.A. 1975 and Tariff Item 68 CET for countervailing duty.

3. The lower appellate authority has, however, accepted the plea of the respondents. His findings are as follows:-

“A perusal of the Asstt. Collector’s order does not show as to why he had confirmed the classification of the imported goods under Heading 73.06/07 (1) of the CTA, 1975. He has simply mentioned that these forgings were manufactured to the specification given in the drawings of scooter parts to be manufactured in the factory of the appellants and therefore, these were assessable as parts of scooters and 3 wheelers under Heading 87.09/12 of the CTA 1975. I am unable to agree with the logic of the Asstt. Collector since there is a lot of difference between the imported forgings for scooter parts and finished scooter parts. Moreover, the imported forgings have no affinity at all with finished connecting rods and crosses. Obviously, he has been very over enthusiastic in identifying the imported products as finished parts of scooter and 3 wheelers vehicles. That by itself proves the point that the imported forgings are mere forgings and by no stretch of the imagination they can be identified as connecting rods and crosses. I also examined the samples of both I find that the samples are highly crude and they have to undergo a lot of manufacturing process before they become eligible for use in scooters and 3 wheeled vehicles. In view of this all these 8 appeals are allowed.”

3.1 We notice at this stage that the lower appellate authority has not applied its mind to the question of classification under Tariff Item 26AA or Tariff Item 68 CET-for the purposes of countervailing duty, although this question arose in some of the appeals before the said authority.

4. Hence these appeals before the Tribunal by the Revenue.

5. Learned SDR, Shri B.K. Singh, for the Revenue has urged that the same issues for these very goods involved in the present appeals have already been considered by the Tribunal in the respondents’ own cases reported in 1987(10)LCX0038 Eq 1988 (033) ELT 0367 (Tri) [Bajaj Auto Ltd. v. Collector of Customs, Bombay]. The Tribunal in paras 6-9 reproduced below examined the issues in respect of these very goods and has come to certain findings that Tariff Headings 87.09/12(1) and 84.06 CTA 1975 would be correct for Customs duty and Tariff Item 26AA CETA would appropriate for countervailing duty :-

“6.     We find that the two representative import invoices described the goods as under :-

(i)      SEMI-FINISHED COMPONENTS FOR BAJAJ SCOOTERS : Connecting Rod forgings as per your part drawing No. 40.0022.03’

(ii)     SEMI-FINISHED COMPONENTS FOR BAJAJ 3 WHEELERS : Cross Forging as per your part drawing No. 40.0007.03 and old Part No. 3779/S/1/7.’

We note that in the import invoices, the suppliers themselves described the goods as semi-finished components. We also note that the goods were forged to specific part drawings. On account of these facts coupled with our visual inspection of the samples produced by the appellants, we are satisfied that the goods as imported had attained the approximate shape and outline of the finished article. We find further that the imported goods were not general purpose blanks that could be further machined for being fitted in any one of the several machines and may require the complete article. On the contrary, the goods having been precisely shaped and forged to specific dimensions according to the specified part drawings, they could be finished only into the Connecting rod and Cross, the two components which fitted the appellants’ vehicles. We find also that the goods were made of special steel-EN 353 and EN 28. In the circumstances, we agree with the learned Representative of the Department that the goods as imported satisfied all the norms laid down by the Larger Bench. The post-importation operations, though split up by the appellants into numerous steps, were essentially those of heat treatment, smoothening of the forgings, turning and cleaning only. Even in the absence of these operations, the goods, as imported, could be deemed to be components of IC engines and scooters by virtue of the Interpretative Rule 2(a), as held by the lower authorities. We confirm the Classification arrived at by the lower authorities so far as the basic Customs duty is concerned.

7.       Coming to the second argument of the appellants, we find that contrary to what the appellants had pleaded, there were good and cogent reasons for the successor authorities to make a departure from the view taken by the earlier Appellate Collector in his order dated 5-4-1980. It is not that the Appellate Collector’s order on classification had been accepted by the Department; the Department had sent up similar classification orders for revision to the Central Government. This particular order dated 5-4-1980 could not be taken up for revision because the revision was found to be time-barred. But what is more important is that in the meanwhile, this Tribunal had passed an order on 25-1-1983 in M/s. BHEL appeal No. C/387/80-B in which the scope of Rule 2(a) had been considered and it had been held that it included even ‘blanks’ which were not ready for direct use and which had attained the approximate shape or outline of the finished article. Delhi High Court Judgment [1983 (012) ELT 328] relied on by the appellant itself says that a different order on classification passed by a higher Court would constitute sufficient reason for changing the earlier classification. All the three impugned orders passed by the Collector (Appeals) took note of this Tribunal order dated 25-1-1983. We hold, therefore, that there were good and cogent reasons for the lower authorities to change the classification held by the earlier Appellate Collector on 5-4-1980.

8.       However, so far as the additional customs duty is concerned, we agree that for the reasons given by the learned representative of the Department, the additional customs duty could only be levied with reference to Item 26AA of the Central Excise Tariff.

9.       In the light of our above discussion, we allow these appeals with consequential relief to the appellants so far as only the additional customs duty is concerned. The appeals are otherwise rejected.”

6. Learned Advocate, Shri L.B. Attar has, however, drawn attention to the recent judgment of the Tribunal in the case of Shivaji Castings & another reported in 1994 (069) ELT 674 = 1993 (049) ECR 0323 (Tri.). He has pleaded that in the light of the said judgment the Tribunal may reconsider its earlier decision in the respondents’ own case (supra) relied upon by the learned SDR.

7. We have considered the pleas of both sides. We agree with the learned SDR that the Tribunal has already considered the classification of the goods involved herein in the respondents’ own case. We do not see any reason to differ with the same since a direct decision on the same issues in respect of the same goods in the appellants as well as respondents’ own case. Shivaji Castings’ judgment being of a general nature, not involving these very goods, would not be a correct guide in these cases. It goes without saying that the ‘essential character’ of goods would be dependent on the goods under consideration and not on general principles.

7.1 Hence, following respectfully the Tribunal’s decision in the appellants and respondents’ own case in 1988 (033) ELT 367, we hold that the imported goods connecting rod forging would be classified under Tariff Heading 84.06 and cross-forging under Tariff Heading 87.09/12(1) for the purposes of customs duty and under Tariff Item 26AA for the purposes of countervailing duty.

8. Appeals disposed of in the above terms.

Equivalent 2004 (178) ELT 362 (Tri. - Del.)