2001(07)LCX0287

IN THE CEGAT, WEST ZONAL BENCH, MUMBAI

S/Shri Gowri Shankar, Member (T) and P.S. Bajaj, Member (J)

COMMISSIONER OF CUSTOMS, MUMBAI

Versus

MONITO ENTERPRISES

Order No. 1850/2001-WZB/C-I, dated 16-7-2001 in Appeal No. C/713/2000-Mum.

Cases Quoted

Commissioner v. SPIC Ltd. — 1997(04)LCX0121 Eq 1998 (097) ELT 0137 (Tribunal) — Distinguished. [Para 5]

Monito Enterprise v. Commissioner — 1999(03)LCX0261 Eq 1999 (111) ELT 0918 (Tribunal) — Referred [Para 7]

Advocated By : Shri A. Chopra, JDR, for the Appellant.

S/Shri V. Sridharan with T. Viswanathan, Advocates, for the Respondent.

[Order per : Gowri Shankar, Member (T)]. - Monito Enterprises, the respondent to this appeal imported goods declared to be parts of fuel injection pump. The classification of the goods was claimed under Heading 84.13 of the Tariff as parts of pumps. Examination by the department of the goods showed that these were initially the goods put up in sets. The goods were described as “overhaul kit for fuel injection pump”. As we have an example, the kit spaco 07185 consisted of following items. One number cleaning towel (paper-wet) in a pouch; plastic knobs; wire set with twisted wire, metal rings, metal parts in one pouch; rubber rings, two composite gaskets, two numbers rubber parts in one pouch; metal part in one pouch. Examination of other kits revealed more or less the similar content.

2. The department was of the view that each of the items contained in the kit should be assessed on merits separately or alternatively, the assessment should be done under Section 19(b) of the Act. Notice issued to the appellant proposed classification of the goods either under Heading 8484.90 (gaskets) or 8413.91 (parts of pump); alternatively it proposed that the goods should be classified “as per constituent material/nature of items if individual values of items in an assortment are available”; and in cases where values are available the highest rate of duty applicable to goods under 4016.99 not be applied under Section 19(b). After considering the cause shown and hearing the importer, the Dy. Commissioner ordered the classification of the goods only of rubber ring under Heading 40.16. This was conceded by the importer and not disputed. The remaining goods were levied to duty by invoking the provision of 19(b) of the Act.

3. The importer appealed the latter part of the order. The Commissioner (Appeals) was of the view that the goods being made out of different quantity put up for retail, this should be classified as if this consisted of material components to retain their essential character. He found their essential character to be as gaskets. He therefore classified under 84.90. This is challenged by the department.

4. The first ground in the appeal relies upon the Explanatory Notes to the Harmonised System of Nomenclature relating to Heading 84.84. These notes provide that the set of gaskets and similar joints must contain at least two gaskets and joints of different material. It is contended since this criterion is not specified the goods cannot be classified under 84.84. This ground is not acceptable. The Commissioner (Appeals) did not order classification of the goods as gaskets because he found them to be gaskets. He found them to be a set consisting of gasket and other items. He found the gasket to confer the essential character of the set. The application of this Notes is inappropriate.

5. The decision of the Tribunal in CCE v. Spic Ltd. - 1998 (097) ELT 137 is relied upon. In that decision, the Tribunal had held Rule 3(b) of the interpretation rules inapplicable to a consignment which was imported in bulk. It held that Rule 3(b) would apply only to set imported in retail sale. We have seen the sample of the goods before us. This makes it clear as does the order of the Dy. Commissioner that the goods are packed in pouches. Each pouch is obviously for one single use and is intended to be sold in retail and the goods are put up and send to retail sale. Applicability of Rule 3(b) is therefore not excluded.

6. It is next contented that the essential character of these goods is not that of gasket. The Counsel for the responder explains that the essential function of this kit is for replacement of gasket for fuel injection pump. These gaskets tend to get worn out and therefore stop providing the air tight seal that they are required to provide. To replace the gasket fuel injection pumps has to be dismanted, entailing removal number of parts which are very small and may get lost in the process, or some of which may be damaged. The kit provides such parts of the fuel injection pump so that the replacement could take place with ease. From the facts, we are of the view that even assuming that the essential character cannot be determined, what will apply is Rule 3(c). This provides that possible heading which appears in the numerical order should apply. That is Heading 84.84.

7. Although neither the Commissioner (Appeals)’s order or the department’s appeal refers to this aspect. We must overrule the Dy. Commissioner’s order that the Section 19(b) of the Customs Act, 1962 can be resorted to. In our order of Monito Enterprise - 1999 (111) ELT 918 we had said specifically that the provision of Section 19(b) of the Act could not be resorted to after the Customs Tariff Act was enacted in 1986. This has been overruled by the Asst. Commissioner.

8. Appeal dismissed.

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Equivalent 2002 (139) ELT 0595 (Tri. - Mumbai)