1997(04)LCX0134

IN THE CEGAT, COURT NO. II, NEW DELHI

S/Shri S.L. Peeran, Member (J) and Shiben K. Dhar, Member (T)

COMMISSIONER OF CUSTOMS, BOMBAY

Versus

BOMBAY SHUTTLE MFG. CO.

Final Order No. C/1952/97-B2, dated 29-4-1997 in Appeal No. C/2583/90-B2

Advocated By : Shri S.N. Ojha, JDR, for the Appellant.

None, for the Respondent.

[Order per : Shiben K. Dhar, Member (T)]. - This Revenue Appeal is directed against order dated 24-10-1989 passed by Collector of Customs (Appeals), Bombay.

2.The Respondents imported “Eyes” and sought clearance under Notification No. 181/87-Customs as component parts of “Auto Shuttles.” This claim was rejected on the ground that Eyes are component parts of shuttles which in turn are parts of looms and therefore shuttles are classifiable under CTH 98.06. Even though shuttles figure specifically under C.T.H. 84.48, by virtue of Chapter Note (1) of Chapter 98 these would fell under 98.06. Notification No. 181/87 does not cover the parts of goods falling under C.T.H. 98.06 and since C.T.H. 98.06 is not mentioned in the Table annexed in the Notification 181/87 the benefit of Notification was denied. In Appeal, however, Collector (Appeals) gave relief on the ground that shuttles are accessories and not parts of looms and therefore are not classifiable under Heading 98.06. Since shuttles fall under 84.48 which figures in Table annexed in Notification No. 181/87-Cus. they would be eligible to exemption under this Notification. The position, therefore, is that whereas goods were assessed under Heading 98.06 and given benefit under Notification 86/87 Collector (Appeals) allowed the benefit of the Notification No. 181/87. Revenue are in Appeal against this order.

3.Arguing on behalf of the Revenue the ld. D.R. submitted that Collector erred in holding shuttle is accessory and not part of loom. Shuttle carries the weft across a loom through upper and lower warp threads. Weaving machine loom is defined as a machine which procured woven fabrics and in most of them there is a device that separates the weft thread and interlaces them with warp threads. In weaving loom this is done by a shuttle and in other machines by other means such as projectlies, repiers and water or air jets. Shuttles therefore become essential part of the loom without which the loom remains incomplete. In their ground of Appeal the Revenue have indicated the position as under :

“The machanism of a loom are ”A-primary" - namely sheddings, picking, and beating up; B-parts which assist are modify primary motions as over and under reversing gear fast and loose reeds, check stops, buffers, brakes and shuttle guards, C-Secondary motion, as letting off, taking up, shuttle box, weft stop, warp stop, temples, salvage and others according to page No. 2 of the “Mechanism of weaving” by Thomas W Fax (Universal publishing Corporation). Therefore “Packing” is one of the important mechanism of a loom and is next in sequence to sheddings and consists in passing weft between the upper and lower lines of a divided warp by a shuttle. From the above it may be seen that shuttle or any other equivalent mechanism is an important part of the loom and therefore shuttle has to be classified as a part of the loom. It should not be confused with the terminology accessory used in certain Dictionaries, because the terminology “part” includes accessories also depending upon the nature of its use. An accessory can be a part and at the same time can be a capital goods as defined in Paras 6(8), (14) and (15) of Import Policy 1989-91. In the present case the shuttle is in the nature of a part of loom and not capital goods and therefore to be treated as part of loom under C.T.H. 98.06. Therefore shuttles are correctly classifiable under CTH 98.06 and therefore the “Eyes” imported for manufacture of shuttles are not entitled for benefit of Notification No. 181/87-Cus."

4.No one appeared on behalf of the Respondents who however, in what they term as cross-objections, have submitted that the impugned goods are accessories to the Auto Shuttle and definition of accessory in HSN note makes it clear that they are not interchangeable with the parts. They also refer to the circular issued by the CBEC No. 154/10/96-CX-4, dated 3-7-1996 which clarifies that shuttles and other such articles are accessories and this circular is squarely applicable to like matters for customs. They are eligible to exemption under Notification No. 181/87-Cus.

5.We have heard the ld. D.R. and perused the records of the case. Collector (Appeals) has referred to certificate from the Dy. Director in the office of the Textile Commissioner produced by the Appellants which certifies that the shuttle is an important accessory of a loom (weaving machine) but it is not a part since it is amenable to further disasembly. He has further certified that the shuttle is interchangeable and it is not an integral part of a loom. There is no challenge to this certificate from the Revenue. When the certificate by a person holding a public office and concerned with the matters relating to textiles is produced it cannot be brushed aside lightly without any evidence in rebuttal. Respondents have referred to criteria for considering an accessory for the purpose of CTH 84.48 at page No. 1250 of HSN which should have been considered. Respondents claim in the cross-objection indicates “various accessories used with the machines of Heading Nos. 84.44, 84.45, 84.46 or 84.47 or of this heading, in general, the term ”Accessories" refers to articles or equipments, not forming an actual part of the machines, which are interchangeable and must be frequently replaced (for example because they are rapidly worn out or because different types are necessary for different types of work). Collector (Appeals) has also referred to following passage from page 179 of Encyclopaedia Britannica Volume I describing shuttle loom as under :

“Shuttless looms are of the three kinds, of which the first predominates dummy shuttle rapier, and fluid jet. The dummy shuttle type, the most successful of the shuttless looms, makes use of a dummy shuttle as projectiles that contains no weft but that passes through the shed in the manner of shuttle and leaves a trail of yarn behind it.”

From this it would appear that there are looms which are without shuttles and shuttle is not therefore essential part of the loom but is only an accessory and therefore would not be classifiable under Chapter Heading 98.06.

6. Considering that Notification No. 181/97 refers to goods classifiable under C.T.H. 84.48 we are of the view that the benefit of the exemption under Notification No. 181/87 has been correctly given by the Collector (Appeals). In view of this we do not find any infirmity in the impugned order and therefore we uphold the order and reject the Revenue Appeal.

Equivalent 1998 (99) ELT 295 (Tribunal)