Vishal Exports vs Collector of Customs, Bombay>1997(12)LCX0016

1997(12)LCX0016

IN THE CEGAT, COURT NO. II, NEW DELHI

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

VISHAL EXPORTS

Versus

COLLECTOR OF CUSTOMS, BOMBAY

Final Order Nos. C/2947-48/97-B2, dated 9-12-1997 in Appeal No. C/978/93-B2

CASE CITED

Mafatlal Industries Ltd. v. U.O.I. — 1996(12)LCX0012 Eq 1997 (089) ELT 0247 (S.C.) — Relied on [Para 11]

Advocated By : None, for the Appellant.

Shri A.K. Agarwal, SDR, for the Respondent.

[Order per : Lajja Ram, Member (T)]. - These are two appeals - one filed by M/s. Vishal Exports and the other filed by the Revenue being aggrieved with the same Order-in-Appeal No. 372/93-BCH, dated 23-7-1993 passed by the Collector, Customs (Appeals). In his Order, the Collector, Customs (Appeals) had classified the spare parts of industrial sewing machines u/s.h. No. 8483.90 of the Customs Tariff. The importers M/s. Vishal Exports had pleaded that they were correctly classifiable u/s.h. No. 8452.90. The Collector, Customs (Appeals) had also held that the electric motor and the stand for sewing machine were to be classifiable along with the sewing machine. The Revenue with regard to the electric motor and stand had pleaded that they were required to be classifiable on merits in their respective headings and not to be classified with the sewing machine.

2. Shri A.K. Agarwal, SDR is present for the Revenue. When the matter was called, no one appeared for M/s. Vishal Exports. The matter had come up last on 27-10-1997 when Shri Ashok Mehta was present. A written request for adjournment was also filed on behalf of M/s. Vishal Exports. It was made clear while adjourning the matter for today that no notice will be sent as the Advocate for the appellants was present. When the matter was called, no one appeared for the appellants. The matter was passed over for the afternoon and was again called. No one appeared for M/s. Vishal Exports. In the circumstances, we are proceeding to deal with both the appeals on merits after hearing the Departmental Representative.

3. We have carefully considered the matter. We find that M/s. Vishal Exports had imported industrial sewing machines complete with electric motors and stands. They had also imported essential maintenance spares. The importers had claimed that the electric motors and the stands were specifically designed for use in the industrial sewing machines and that they should be classifiable along with sewing machines. They had also pleaded that the spares were classifiable u/s.h. No. 8452.90. The contentions of the importers were not agreed to by the Customs and the assessments were finalised without accepting the contention of the importers and the goods were cleared out of the Customs Charge. Subsequently, they filed a refund claim which was rejected by the Asstt. Collector, Customs (Refund) on the ground that the importers should approach the concerned Appraising Group for obtaining necessary Orders. On appeal, the Collector, Customs (Appeals) dealt with the matter on merits and while confirming the classification of spares u/s.h. 8483.90 of the Tariff held that the motor and stand should be classified along with the sewing machines.

4. Under sub-heading 8452.90 of the Customs Tariff covers “Sewing machines other than book-sewing machines of Heading No. 84.40; furniture, bases and covers specially designed for sewing machines; sewing machine needles.” It is seen from the Tariff Entry that the automatic units are covered by sub-heading 8452.21. It is thus clear that sewing machines with motors were also classifiable under this Heading No. 84.52. The furniture for sewing machines were classifiable under sub-heading No. 8452.40 and other parts of the sewing machines were classifiable u/h No. 8452.90.

5. The importers had imported spare parts which for all intents and purposes were parts of the industrial sewing machines. The parts of sewing machines were specifically covered by sub-heading 8452.90.

6. The Revenue had classified the spare parts under sub-heading 8483.90. Heading 84.83 relates to the “Transmission shafts and cranks; bearing housings and plain shafts bearings; gears and gearing; ball or roller screws; gear boxes and other speed changers including torque converters; fly wheels and pulleys, including pulleys blocks; cluthces and shaft couplings.” Sub-heading 8483.90 covers the parts of these items. We have already referred to the Heading No. 84.52 of the Customs Tariff and the sub-heading 8452.90 of the Tariff and we consider that the parts of the automatic sewing machines were correctly classifiable u/s.h. 8452.90 of the Customs Tariff.

7. The Revenue in their appeal had contended that the electric motors and stands should be separately classified on merits and should not go with the sewing machines. We find that under Section Note 2(a) of Section 16, parts which are goods including in any heading of Chapter 84 or 85 are in all cases to be classified in their respective headings. Under Section Note 2(b), other parts being suitable for use solely or principally with a particular kind of machine or with a number of machines of the same heading were to be classified with the machine of that kind.

8. In this case, the electric motor had not been presented for assessment separately. In the invoice, there is no separate reference to the motor. For the packing, the sets of motors (induction motor) had been packed separately but it does not mean that the electric motors had been imported separately. From the facts on record, it is clear that the electric motors were parts of the industrial sewing machines. As the parts are specifically included under Heading No. 84.52 of the Tariff even by virtue of Section Note referred to above, they were correctly classifiable u/s.h. 8452.90.

9. As regards the Stands, we find that the furniture for the sewing machine is specifically included in sub-heading 8452.40. As the Stand was also specially designed for industrial sewing machine, we consider that it was also correctly classifiable u/s.h. 8452.40 of the Tariff. The revenue’s contention that the motor should be classified under sub-heading 8501.20 as electric motor separately from sewing machine does not appear to be correct in view of the clear finding of the Collector, Customs (Appeals) that the electric motor had to be classified along with the machine. Para 5 from his decision is extracted below :

“5. I find from records that they had imported 111 industrial Sewing Machines and also 111 Electric Motors and Stands. These electric motors and stands were meant for these machines only. Their classification has to be along with the machines. It is a different matter that for the sake of convenience of transport, they are packed separately. There is no evidence on record brought by the Group or the Asstt. Collector concerned that these electric motors and the stands are not intended or designed for the sewing machines. In fact, the machines being industrial sewing machines meant for the garment export factory, ought to have an electric motor and stand for mass scale production and for the convenience of the workers. It is an accepted principle that tables and electric motor if imported along with the machines are to be assessed with the machines.”

10. As regards the benefit of Notification No. 172/89-Cus., dated 29-5-1989 as amended, we find that under Serial No. 38 of the Table under that Notification the goods falling u/s.h. No. 8452.90 excluding parts of sewing machines of the household type were eligible for concessional rate of Customs duty. As we have observed above the spare parts for the industrial sewing machines were classifiable under sub-heading 8452.90 and thus they were eligible for the benefit of this Notification. The Stand, however, was classifiable under sub-heading 8452.40 and was not covered by that Serial No. 38 of the Table under Notification No. 172/89-Cus. aforesaid. Thus the benefit of this Notification was not available to the Stand.

11. Taking all the relevant facts and consideration into account as regards the classification of the spare parts for the Industrial Sewing Machines, subject to the observations in para 10 above, we allow the appeal of M/s. Vishal Exports. The appeal filed by the Revenue is rejected. Consequential relief, if any, will be subject to the law of unjust enrichment as ennunciated by the Hon’ble Supreme Court in the case of Mafatlal Industries Ltd. v. U.O.I. - 1996(12)LCX0012 Eq 1997 (089) ELT 0247 (S.C.). Ordered accordingly.

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Equivalent 1998 (103) ELT 74 (Tribunal)