1. The question involved in this case is whether countervailing duty as applicable to motor vehicle parts was chargeable on valves, piston, piston rings etc., of internal combustion engines imported by the appellants under the subject Bill of Entry in May, 1974.
2. The case was argued before us on 22-2-1983. Shri Jamadar stated that the appellants had been granted an industrial licence to manufacture diesel engines, that they manufactured diesel engines for industrial application, that their engines were principally used for fitting to shovels, cranes, oil drilling rigs, generator sets, compressors etc.
and only about 11% of these engines were fitted to dumpers, that even if dumpers be treated as motor vehicles, since predominant use of their engines was for non-vehicular industrial application, their engines could not be classed as parts of motor vehicles (vide A.I.R. 1976 SC 1418) and, therefore, components of such engines could not be charged to C.V. duty as parts of motor vehicles. In support of his argument, he further relied on Bombay High Court judgment in their own case (1980 ELT 557-Bom), in which the said High Court had, on this very ground of principal use, classified their engines as "machinery, not otherwise specified" under item 72(a) of the erstwhile Indian Customs Tariff.
3. On behalf of the Department, Shri Raghavan Iyer argued that classification of goods under the Customs Tariff was not relevant for countervailing duty purposes, that a part of the engine of a motor vehicle was also a part of that motor vehicle and that the question of predominant use could arise only if the tariff referred to end-use of the article.
4. We have carefully considered the matter, We hold that it could be incorrect to class an engine, the predominant use of which is for non-vehicular applications, as of vehicular type. By the same logic, components of such an engine can also not be called parts of motor vehicle. We, therefore, hold that the subject components, imported for the manufacture of non-vehicular type industrial engines, were not chargeable to C.V. duty as applicable to motor vehicle parts.
5. We allow this appeal accordingly, with consequential relief to the appellants.