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Gujarat State Fertilizers Vs. Collector of Customs - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1989)(43)ELT476TriDel
AppellantGujarat State Fertilizers
RespondentCollector of Customs
Excerpt:
.....in phospheric acid plant. bombay custom house, at the time of clearance for the purpose of basic customs duty assessed the goods as spare-parts of machinery under item 72(3)/72(b) ict. for the purposes, however, of additional duty (cv duty) the goods were assessed as man-made fabrics under item 22 of the central excise tariff.3. the appellants applied for re-assessment and refund of cv duty claiming that classification under tariff item 22 of the goods was wrong when the goods had been for the purpose of basic customs duty held to be component parts of machinery. the assistant collector of customs by his order dated 8-2-1977 held that liability to cv duty does not depend on ict classification for basic customs duty and, further, the goods were synthetic artificial silk fabric covered.....
Judgment:
1. Question for decision in this Revision Application to Government of India transferred to the Tribunal to be disposed of as an appeal presented before it is whether Polyproplene Multifilament filter cloth for Rotary Drum Filter imported by the appellants should have been classified as fabric under Tariff Item No. 22 of the Central Excise Tariff or as component parts of machinery and thus held exempt from additional duty (hereinafter called CV duty).

2. The appellant by BE Cash No. 292-D dated 2-4-1976 SS Indian Endurance imported a number of Polypropylene filter cloth (hereinafter called the goods) cut to specific shape and size and of special quality as sparepart of their Rotary Drum filter machine used in Phospheric acid plant. Bombay Custom House, at the time of clearance for the purpose of basic customs duty assessed the goods as spare-parts of machinery under Item 72(3)/72(b) ICT. For the purposes, however, of additional duty (CV duty) the goods were assessed as man-made fabrics under Item 22 of the Central Excise Tariff.

3. The appellants applied for re-assessment and refund of CV duty claiming that classification under Tariff Item 22 of the goods was wrong when the goods had been for the purpose of basic customs duty held to be component parts of machinery. The Assistant Collector of Customs by his order dated 8-2-1977 held that liability to CV duty does not depend on ICT classification for basic customs duty and, further, the goods were synthetic artificial silk fabric covered by Item 22 of CET. With these findings he rejected the claim for re-assessment and refund. The Appellate Collector of Customs, Bombay, by his order dated 20-1-1978 upheld the order passed by the Assistant Collector of Customs. The Appellate Collector substantially followed the same reasoning as that of the Assistant Collector. Aggrieved, appellants filed Revision Application to Government of India which is now the appeal before us.

4. At the hearing of the appeal Shri R.S. Somaiya, Chief Resident Manager of the appellants, represented the appellants and Shri S.C.Rohtagi, JDR, the Respondent. A drawing describing the product and'its use was filed before us. Shri Somaiya argued that the goods which were admittedly made of cloth had come ready with fitments for use as filter in machinery. It could not normally be used otherwise than as component parts of machinery. The customs authorities by classifying the goods as component parts of machinery under Item 72(3) ICT were precluded from again classifying it as synthetic or artificial silk fabric under Item 22 CET. He submitted that the appropriate classification for the goods was as component parts of machinery which at the material time were exempt from central excise duty and thus from CV duty.

5. On behalf of the Respondents Shri S.C. Rohtagi did not dispute that at the material time component parts of machinery were exempt from central excise duty. He, however, strongly refuted Shri Somaiya's contention that classification for the purpose of customs should invariably correspond with classification for the purpose of countervailing duty. He submitted that the two are under different enactments and interpretation under one enactment cannot control the interpretation under the other enactment. He strongly defended the classification under Tariff Item 22 of CET of the goods for levy of CV duty urging that the goods were essentially man-made fabrics. In support of his argument Shri Rohtagi relied on the Supreme Court decision in JK Steel Ltd. v. Union of India and Ors. -1978 ELT J 355 - and LUCAS TVs Ltd., Madras v. Union of India 1978 ELT J 711.

6. For the purpose of this appeal, it is not necessary to express a finding on the contention of the parties about classification for the purpose of basic customs duty corresponding with classification for the purpose of CV duty, i.e. under the Central Excise Tariff.

7. It was not disputed by the respondents that component parts of machinery need not necessarily be made of metal or wood. After hearing the parties and looking into the drawing in respect of the goods, it appears to us that the appropriate classification of the goods should have been as component parts of machinery, i.e. the same as for the purpose of basic customs duty. It should not have been under Tariff Item 22 of CET as man-made fabrics. As a consequence, in view of the agreed position above, the same should have been held not liable to CV duty.

8. We, therefore, set aside the order of the Appellate Collector of Customs and allow the appeal with consequential relief to the appellants.


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