Escorts Ltd. vs Collector Of Customs, New Delhi>1997(09)LCX0177

1997(09)LCX0177

IN THE CEGAT, COURT NO. II, NEW DELHI

S/Shri Lajja Ram, Member (T) and S.S. Kang, Member (J)

ESCORTS LTD.

Versus

COLLECTOR OF CUSTOMS, NEW DELHI

Final Order No. C/1982/97-B2, dated 11-9-1997 in Appeal No. C/3029/90-B2

Advocated By : Ms. Elizabeth Thomas, Manager (Law), for the Appellant.

Shri S.N. Ojha, JDR, for the Respondent.

[Order per : Lajja Ram, Member (T)]. - M/s. Escorts Ltd. imported the goods described as “Master Gears” from U.K. and the said `master gears’ were assessed to the customs duty in the Bill of Entry dated 11-9-1985, under Heading No. 84.63 of the Customs Tariff. On 28-2-1986 after the goods were cleared, a refund claim was filed on the ground that the `master gears’ imported were accessories of the Universal Gear Testing Machine installed at their works. Classification under Heading No. 90.16(1) New Delhi on the ground that the catalogue produced by the importers did not indicate that the master gears were the standard accessories of the universal gear testing machine, the machine conducted various functions and as the gears were specifically covered by Heading No. 84.63 of the Tariff, they were correctly classifiable therein. On appeal, the Collector, Customs (Appeals), New Delhi rejected the appeal and observed in Para 4 of his order as under :

“I have considered the appeal as well as the submissions made during the course of personal hearing and in written brief. I observe that neither the appellants have contested the assessment of goods at the time of final assessment in the Bill of Entry nor had they lodged any protest for their payment of customs duty levied thereon. In view of this, therefore, their contentions amount to amendment of Bill of Entry after the goods have been cleared for home consumption and without proving that the documentary evidence now furnished was in existence at the time the goods were cleared for home consumption, as provided in Section 149 of Customs Act, 1962.”

2. The matter was posted for hearing on 11-9-1997 when Ms. Elizabeth Thomas, Manager (Law) appeared for the appellants. Shri S.N. Ojha, JDR, represented the Revenue.

3. Ms. Elizabeth Thomas submitted that the master gears were essential accessories of the gear testing machine, their purpose was to check the gears manufactured by them, they have sought classification under Heading No. 90.16 which had been changed by the Customs Department to Heading No. 84.63, a refund claim was filed in time and that the master gears were costly items as compared with the normal gears. She referred to the copy of the catalogue “Mahr 897 Workshop Gear Tester”. It was submitted that the master gears have been mentioned under the catalogue `gear testing equipment’. She also referred to operative instructions where master gears had been referred to at page 4.

4. She also referred to the earlier invoice dated 24th May, 1984 under which universal gear testing machine had been imported by them.

5. In reply, Shri S.N. Ojha, JDR referred to the relevant Tariff Entry and submitted that the master gears have been imported separately and there was nothing to show that they were as standard accessories to the gear testing machine. He referred to the catalogue produced by the appellants and stated that the master gears were not part of the testing machines but were for testing the gears with the help of such master gears.

6. We have carefully considered the matter. The appellants had imported master gears from U.K. The country of origin had also been shown as U.K. The machine `universal gear testing machine’ had been imported earlier under invoice dated 24-5-1984 while the master gears in question has been cleared under B/E, dated 11-9-1985. The machine `universal gear testing machine’ was of West Germany while the `master gears’ had been imported from U.K. and was of U.K. origin.

7. The appellants had sought classification of the `master gears’ under Heading No. 90.16 which cover the checking instruments. The function of the master gears as explained by the appellants is “to the measure and inspect the gears at various stages for correcting error, Pitch Circle Dia and Rotational Concentricity error and Tooth and Tooth to Tooth error”. The master gears are placed on the gear testing machines and then the gears produced are inspected with the master gears. Taking as such, the master gears do not discharge the function of checking instrument.

8. The universal gear testing machine is complete in itself and depending upon the requirement, there could be different master gears and these master gears could not be considered as part of the machines or even as accessories. The machines were operational and working and the master gears had been imported subsequently for subsequent requirement.

9. The goods had been classifiable under Heading No. 84.63 which among others cover `gears and gearing (including friction gears and gear-boxes and another variable speed gears.’ The master gears were the gears. In the Tariff Entry, there is no qualification that the master gears will not be considered as gears. In the Explanatory Notes to the Customs Co-operation Council Nomenclature, Gears and Gearing (including Friction Gears) have been explained at page 1383 as under :

The basic gear is the toothed wheel, cylinder, cone, rack or worm, etc. In an assembly of such gears, the teeth of one engage with the teeth of another so that the rotary movement of the first is transmitted to the next, and so on. According to the relative number of teeth in the separate units, the rotary movement may be transmitted at the same rate, or at a faster or slower rate; according to the type of gear and the angle at which it meshes with the next, the direction of transmission may be changed, or a rotary movement converted into a linear movement or vice versa (as with a rack and pinion).

The heading covers all types of gears including simple cog wheels, bevel gears, conical gears, helical gears, worms, rack and pinion gears, differential gears, etc. and assemblies of such gears. It also covers toothed and similar wheels for use with transmission chains.

The heading also covers friction gears. These are wheels, discs or cylinders, which, when mounted one on the driving shaft and one on the driven shaft, transmit the movement by the friction between them. They are usually of cast iron, in certain cases being covered with leather, wood, bonded fibres or other material to increase the friction.

10. We find that the description covers the goods imported.

11. As we have discussed above, the gear testing machine had been imported earlier and the master gears imported subsequently were not a part of the gear testing machines. The master gears were a part of testing equipment referred to in the catalogue. They were not a part of the testing machine as such. At page 4 of the operating instructions in the catalogue, it has been referred to as under :

“Master Gear : Gears having the same module or DP and pressure angle yet any number of teeth may be checked with a common master gear. Helical spur gears are tested against a master gear of the same helical angle yet the opposite direction of helix. Gears with profile displacement may in general be checked with master gears without profile displacement. If the profile displacement, however, is large the master gear must feature the corresponding displacement in opposite direction of the gear under test.”

12. It is provided in the technical literature that the testing is with the help of not only master gears but also against the master worms. The master gear is mounted on the machine and then the testing is done.

13. In the operating instructions, the accessories had been listed as Stationary table and Measuring carriage. We do not find any reference in these accessories to the master gears. It is further provided that the gear to be tested is mounted on mandrels 894 z (6) which is held by a single end and the master gear between centre of steady attachment 894 wg. Thus on one side of the mounting the gear to be tested is placed and on the other side, the master gear is placed.

14. The function of the master gear and the technical literature now produced by the appellants do not indicate that the master gear imported was a checking instrument or were a part or accessory of the gear testing machine. As gears have been specifically described under Heading No. 84.63, in view of the Section/Chapter Notes, they were correctly classifiable under Section 84.63 of the Tariff as in force during the relevant time.

15. In view of the above discussions, we do not find any material to change the classification already confirmed by the Collector, Customs (Appeals), New Delhi. In the result, the appeal is rejected.

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Equivalent 1998 (98) ELT 678 (Tribunal)