1. The Advocate for the Appellants referred to the following orders-in-appeal: - and stated that since all these cases involve common points of law, they should be heard and disposed of together. He stated that the appellants are manufacturers of agro-industrial engines -34-CC Model for Farm and Industry. They import a small percentage of components required by them and by manufacturing or procuring the other components within the country they assemble the engines at their factory. These engines are fitted as prime-mover for several agricultural and industrial equipments like Sprayers, Lawn Movers, Battery Charging Sets in Defence, Power Boats, etc. In the case under consideration, the Appellants imported magneto coils which are component parts of these agro-industrial engines manufactured by them. (In the Appeal No.572/83, the goods imported are contact sets which are the components of the magneto coils and as such of the starting units of the engines).
These magneto coils are parts of the starting units of the said engines. The engines manufactured by the appellants are the stationary piston type industrial engines and not vehicular type engines. These engines had in the past been classified by the Customs authorities under Item 72 of the ICT. The starting gear including the magneto and the ignition coils were classified as components of industrial engines under item 72(3) of the ICT. There was no dispute that these parts were not interchangeable. The Certificate from the manufaturers to this effect had already been obtained and was produced to the Customs authorities.
2. The Advocate further stated that the change-over to the new Customs Tariff has created certain difficulties in the matter of assessment.
Chapter 84 of the Customs Tariff covers machinery, mechanical appliances and parts thereof. Sub-heading 84.06 covers internal combustion piston engines and in the absence of a separate heading for parts in this Chapter, it also covers parts of such industrial commercial engines. Chapter 85 of the Customs Tariff covers electrical machinery and equipments and parts thereof. The Customs authorities have classified the subject item under item 85.08 which covers electrical starting and ignition equipment for internal combustion engines etc. The point for consideration is whether the magneto coil (or the contact sets) in dispute forming part of the starting equipment which is inbuilt in the agro-industrial engines should be classified under item 84.06 or under item 85.08. The Notes to Chapter 84 do specify some electrical items that are excluded from the scope of Chapter 84, but neither electrical starting equipment nor parts thereof like magneto ignition coils find mention in this specific exclusion.
Accordingly, these articles are not specifically excluded from the scope of item 84.06. The Advocate stressed that the changeover from the old Tariff to the new Customs Tariff was not intended to create any unintended additional tax burden. Keeping this principle in view, several exemption Notifications were issued to keep parity in the taxation structure between the classification under the old and the new Tariff. The Advocate also referred to the Notification No. 281-Cus.
dated 2-8-1976, as amended, and stated that industrial commercial engines and parts thereof, excluding those which are interchangeable for use with motor-vehicles (other than those specified in serial No. 2 of the Table annexed to the Notification) should be assessable at 40% ad valorem. The Departmental Representative referred to the Order-in-Appeal which has clearly ruled that with the introduction of the Customs Tariff Act, classification under item 72(3) pf the ICT is defunct- Hence, the various arguments adduced by the appellants in regard to the classification under ICT are no longer relevant. Magneto ignition coils (or contact sets) are clearly covered under heading 85.08 of the CTA which covers electrical starting and ignition equipment for internal combustion engines (including the ignition magnetos, magneto dynamos, ignition coils, starter motors, sparking plugs and glow plugs). According to rule 3(a) of the Rules for interpretation of the Tariff where for any reason goods are prima-facie classifiable under two or more headings, the heading which provides the most specific description shall be preferred to the heading providing a general description. In accordance with rule 2(a) of Notes under Section XVI, goods of a kind described in any of the heading of Chapter 84 and 85 (other than headings No. 84.65 and 85.28) are in all cases to be classified in their respective headings. In accordance with these rules of interpretation, the classifications of these goods have been correctly made under the heading 85,08 of the CTA.3. The Bench has carefully considered the points made by both the parties and agrees with the arguments put forward by the Departmental Representative. The goods have been correctly classified under item 85.08 which covers the goods more specifically than the alternative item under Chapter 84. Unless therefore, a special exemption is given to these goods, they would be assessable at the appropriate rate under the sub-heading of the Tariff. The appeal is accordingly rejected. The Appeal Nos. 535/80-B, 536/80-B, 541/80-B and 579/80-B are also disposed of accordingly.