1. The question that falls for decision in this case is whether Press Tools, which on examination were found to be die sets, fall under heading No. 82.05 of the Customs Tariff Act, 1975, as held by the lower authorities, or under heading No. 84.45/48, as urged by the appellants.
2. The samples of the subject die sets were shown to us during the hearing. There is no dispute on the facts of the case. Both sides agree that these die sets are intended to be fitted to power presses installed in the appellants' factory for manufacture of watch parts.
There is also agreement that one die set can manufacture a particular watch part only. The crucial point for our determination is whether these die sets can be considered as interchangeable tools for the purpose of heading 82.05.
(a) According to the explanatory notes in the C.C.C.N. Chapter 82 of the C.C.C.N. applies only to hand tools. The subject die sets cannot be worked in hand and they cannot, therefore, fall under Chapter 82.
The Customs Tariff is based on C.C.C.N. and heading 82.05 of the Tariff is a copy of the same heading in the C.C.C.N. These die sets should, therefore, fall outside the scope of heading 82.05.
(b) Heading 82.05 applies only to interchangeable tools. The appellants have furnished a certificate dated 16-2-83 from M/s. SMPS Engineers & Consultants (Bombay) Pvt. Ltd. to the effect that these die sets are not interchangeable. The appellants further say that according to the Dictionary meaning, 'interchangeability' means putting each of the two things in other's place. In support of their argument, they have also produced a letter dated 10-10-83 from I.S.I. which gives the following definition of interchangeability as appearing in ISO Guide 2 (July 1983)-'General Terms and Their Definitions concerning Standardisation and Certification' issued by International Organisation for Standardisation : "1.8 Interchangeability.-The suitability of a product (products) to be used in place of another product (products) to fulfil the relevant requirements.
Note.-The functional aspect of interchangeability is called 'functional interchangeability' and the dimensional aspect, 'dimensional interchange-ability'." The appellants urged that there is a basic fallacy in the reasoning of the lower authorities inasmuch as they admit that one die set can manufacture only one particular watch part, but yet call the die set as interchangeable tool on the ground that power press to which the die set is fitted is capable of doing multiple jobs. The appellants assert that interchangeability has to be in regard to' the tool, and not in regard to the machine to which the tool is fitted.
4. The department's plea is that heading 82.05 is not confined to hand tools only inasmuch as it specifically includes interchangeable tools for machine tools also. According to the Learned Department's Representative, interchangeability means that when one die wears out, another die of the same type replaces it. In that sense, the subject die sets were interchangeable tools, and they were specifically covered by heading 82.05 as "interchangeable tools for...machine tools". Note 1 (ij) to Section XVI of the Customs Tariff Act excluded articles falling within Chapter 82 or 83 from the scope of that Section. Since Chapter 84 occurs in Section XVI, interchangeable tools for machine tools falling under Chapter 82 were outside the scope of Chapter 84. He stated that the certificate of M/s. SMPS Engineers & Consultants (Bombay) Pvt. Ltd. presented by the appellants, was erroneous and misleading. The certificate stated that the concerned Engineer had personally seen the die sets involved in this case. Since the goods were all the time under Customs control, the Engineer could not have examined the goods without Customs permission. Further, the import invoice stated that certain drawings and plans had also been imported.
But these had been withheld by the appellants from the department.
Finally, he stated that for the purpose of countervailing duty the goods were classifiable as tools under item 51A of the Central Excise Tariff and this also lent support to his plea that the goods were tools falling under heading 82.05.
5. In a brief rejoinder, the appellants stated that the drawings and plans, although included in the invoice, could not be imported earlier as the time-limit permitted for their import had expired. The said permission had since been renewed and the drawings and plans had now been imported and were at present awaiting clearance at Delhi Airport.
The allegation that their production before the department was deliberately withheld was, therefore, not correct. Regarding the analogy drawn by the Department's Representative with item 51A of the Central Excise Tariff, the appellants stated that this item was differently worded and the word 'interchangeable' did not occur in the said item, Hence any reference to item 51A C.E.T. was irrelevant. In any case, there was no dispute regarding the countervailing duty. The dispute was only about the basic Customs duty chargeable on press tools or die sets.
6. We have carefully considered the matter. We have also seen the samples of the subject die sets. We agree with the department's representative that heading 82.05 is not confined to hand tools only as it specifically includes interchangeable tools for machine tools also.
However, we find force in the other argument of the appellants which relates to the question whether the subject die sets are interchangeable or not. When the tariff heading says 'interchangeable tools', it means that the tools should be interchangeable and not that the machine to which they are fitted should be capable of doing multiple jobs. According to the definition appearing in the ISO Guide, inter-changeability means the suitability of a product to be used in place of another product to fulfil the relevant requirements. When the Department admits that one particular die set can manufacture one particular watch part only, that it cannot do any other job and that no other tool can take its place and do the same job, we fail to understand how such a die set could be classified as an interchangeable tool. Interchangeability cannot mean, as the learned Department's Representative would like us to believe, that when one die set wears out, another die set of the same type should replace it. Such replacement function is inherent in all standard machine parts and that is the basis on which the concept of spare parts is built. Then why the additional condition of inter-changeability. We are satisfied that due meaning has to be given to this additional condition put in the tariff heading. In our view, interchangeable tools are those which satisfy the definition of Intel-changeability as given in the ISO Guide, It is not in doubt that the subject die sets are not interchangeable tools in that sense.
7. The analogy drawn by the Department's Representative with item 51A C.E.T. is not relevant to the issue of basic Customs duty before us.
The drawings and plans are not necessary when the goods themselves are available for inspection and there is no dispute about the nature of the job they perform.
8. Since we hold that the subject die sets are not interchangeable tools, they do not fall under heading 82.05. Heading 82.45/48, which includes parts and accessories suitable for use solely or principally with machine tools for working metal, appropriately covers the subject goods. Accordingly, we allow the appeals with consequential relief to the appellants.