1. This is a revision application to the Government of India which under Section 131-B of the Customs Act, 1982, is to be proceeded with as if it were an appeal filed before the Tribunal.
2. The goods whose classification under the First Schedule to the Customs Tariff Act, 1975 (hereinafter referred to as Customs Tariff Schedule) is in dispute, were imported and cleared through the Port of Bombay by the appellant firm. The goods were described as "Industrial Sewing machine parts- TA-I Type, namely, Rotating Hook Complete with Bobbin Case-Thread Take Up Lever Complete with Crank and Lock Pin". The goods were assessed to duty by the Customs anthorities under sub-heading (2) of heading 84.41 of the Customs Tariff Schedule. After clearance of the consignment on payment of duty so assessed, the appellants filed a refund application before the Assistant Collector of Customs, Bombay claiming re-assessment of the goods under subheading (1) of the aforesaid heading. The Assistant Collector rejected the refund application having regard to the invoice description of the goods and his finding that the goods in question were inter-changeable with Singer sewing machines model 103-10 which requires for its operation less than 1/4 HP. Aggrieved with this order the appellants preferred an appeal to the Appellate Collector of Customs, Bombay. The Appellate Collector held that the sewing machines of which the imported goods were parts were domestic sewing machines and not industrial sewing machines and rejected the appeal. It is against this order that the appellants have filed a Revision Application before the Government of India which, as stated earlier, is to be disposed of by the Tribunal as if it were an appeal filed before it.
3. Shri Sogani, appearing for the Appellants, submitted that under the Customs Tariff Schedule of 1975, the Horse power of the motor required for operation of the sewing machine was not a relevant criterion for distinguishing between industrial and domestic sewing machines. The goods in the instant case were described as "Industrial sewing machine parts-TA-I type" which type was worked by power and required for its operation not less than 1/4 HP. This model of sewing machines was described in the relevant catalogue as a highly efficient machine capable of 1800 stitches in a minute and was most suitable for tailors and dress maker's shops. It was urged that domestic sewing machines would not need such high performance of 1800 stitches per minute. The machines used in tailors' and dress makers' establishments were of the industrial and not demestic type. In this connection, Shri Sogani referred to page 1312 of the Explanatory Notes to the BTN and argued that the machines used in households were not the same as those used in tailoring and dress makers' establishments. It was further urged that rotary hooks (the goods in the present case) are for industrial machines while oscillatory motion was for domestic machines. In this connection, Indian Standard Specifications 8892-1978 and 6903-1973 were referred to.
4. Continuing his submissions, Shri Sogani stated that there was nothing to preclude an industrial machine from being used in a domestic household but that would not be relevant for the purpose of tariff classification. Note 5 to Chapter 84 of the Customs Tariff Schedule lays down that a machine which is used for more than one purpose is for the purpose of classification, to be treated as if its principal purpose was its sole purpose and, on this ground, the present goods fell for classification under heading No. 84.41(2) of the Customs Tariff Schedule. Even if it was held that machines of TA-I model were demestic sewing machines falling under heading 84.41(2), their parts would not fall under sub-heading (2) but under sub-heading (1). For this purpose, Shri Sogani relied upon note 2(a) to Section XVI of the Customs Tariff Schedule, the point made being that what was specifically described in sub-sheading (2) alone would fall Within its purview. In support of this argument, he referred to heading 84.51|55(2) wherein parts were specifically covered apart from the machines falling within that sub-heading. Having regard to these submissions, Shri Sogani urged that the goods merited classification under heading 84.41(1) of the Customs Tariff Schedule.
5. Shri Raghavan Iyer, appearing for the Respondent, submitted that the finding that the TA-I model of sewing machines, for which the imported goods were parts, were inter-changeable with domestic sewing machines has not been disputed by the Appellants before the Assistant Collector or the Appellate Collector nor even in the Revision Application. Though domestic machines have not been defined in the Tariff, reference could be usefully made, Shri Iyer urged, to the judgment of the Gujarat High Court in M/s. Viswa & Co. v. State of Gujarat-(1966) 17 STC 581 (Guj.).
In the said judgment, the High Court had held that reference to the expression "Domestic Electrical Appliances" would connote electrical appliances of a kind generally used for domestic purposes. The fact that a domestic electric appliance is used out of the household also would not vitiate its character of domestic appliance. It should generally be used for household purposes. Shri Iyer also referred to the explanation appearing in Central Excise Tariff Item No. 33-C according to which "domestic electrical appliances" means "electrical appliances normally used in the household and similar appliances used in hotels, restaurants, hostels, offices, educational institutions, hospitals, train kitchens, aircraft or ship pantries, canteens, tailoring establishments, laundry shops and hair dressing saloons". The important point to note in the present case was that the Model TA-I sewing machine was inter-changeable with Singer domestic sewing machine. The horse power criterion was not material or relevant.
6. Shri Iyer submitted that the classification of the same article was the subject matter of decision of the Government of India in a Revision Application reported in 1979 Cencus 543-D=1982 ELT 540A (G.O.I.) (Government of India Order No. 380/13/79-Cus. II, dated 24-8-1979). The said order held that heading No. 84.41(2) was the correct classification for the subject goods.
7. Shri Iyer finally submitted that even if it was held that both subheadings (1) and (2) of 84.41 equally applied, the latter heading would prevail in view of Rule 3(c) of the Rules for interpretation of the Customs Tariff Schedule [the rule reads "when the goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs latest amongst those which equally merit consideration"].
8. Replying to Shri Iyer's argument, Shri Sogani urged that the subject goods were generally used for industrial purposes and not domestic purposes. Therefore, neither the Gujarat High Court judgment nor the explanation to Item 33C of the Central Excise Tariff referred to by Shri Iyer were applicable to the present goods. Shri Sogani had no submission to make on the Government of India's orders holding the subject goods to be classifiable under heading No. 84.41(2) but he would urge that the correct sub-heading was (1).
9. We have given careful consideration to the submissions of both the parties. The goods herein are invoiced as for "Industrial Sewing Machines TA-I type". The Assistant Collector has recorded the finding that the goods were found to be inter-changeable, i.e. capable of being used in singer sewing machine model 103-10 which is a domestic sewing machine. It is also pertinent to note, as the Appellate Collector has observed, that while "Center sewing machine Model DB I-C50" has been described as ideal for industrial use, the machine of Model TA-I-C10 is described as most suitable for Tailors and Dress Makers shops. The finding of the lower authorities that the parts are capable of use in singer domestic sewing machine model 103-10 has not been rebutted by the appellants. The fact that such machines may be used in industrial establishments would not detract from the position that they are basically domestic sewing machines. This view is supported by the Gujarat High Court judgment in the case of Viswa & Co. referred to by Shri Iyer.
10. The Appellants had referred to Indian Standard Specification IS : 6903-1973 which is titled "Glossory of Terms relating to Sewing Machines for household purposes". An extract of this glossary has been produced by the Appellants in support of their contention that since it does not make a mention of 'rotating hooks', the latter do not form parts of domestic sewing machines. Similarly, they have produced extracts from Indian Standard Specification IS : 8892-1978 titled "Specification for bobbins for sewing machines with rotating hooks for industrial use" in support of their contention that 'rotating hooks' are for industrial sewing machines only. The Bench finds it difficult to accept these two Standards as evidence clinching the issue in favour of the Appellants. These Standard Specifications are intended to define guidelines for the benefit of persons who intend to manufacture the goods described in the Specification. These Specifications cannot be, in the absence of any evidence directly bearing on the point, deemed to testify to the correctness of the Appellant's contention that 'rotating hooks 'are not used in domestic sewing machines or that they are used only in industrial sewing machines. As pointed out in the previous paragraph, the factual finding of the Assistant Collector to the effect that the "rotating hooks" in the present case are inter-changeable with Singer sewing domestic machines models have not been rebutted by the Appellants. Nor have the machines for which these goods are stated to be parts described as "industrial sewing machines". We are, therefore, unable to accept the Appellant's contention.
11. We have carefully gone through the discussions contained in the Government of India's orders in revision reported in 1979 Cencus 843D= 1982 ELT 540A (G.O.I.). This order discusses at great length the several points urged in the proceedings before Government which had a bearing on the classification of "rotating hooks complete with bobbins case". Several points which were urged before the Government of India in those proceedings have not been urged before us in the present proceedings and, therefore, it is not necessary to go into these aspects of the matter. However, one particular aspect of the case is worth referring to. This refers to the determination of the scope of sub-headings (1) and (2) of heading 84.41 in the Customs Tariff Schedule with reference to the counterpart heading in the BTN which is the pattern on which the Customs Tariff Schedule is based. The statement of Objects and Reasons attached to the Customs Tariff Bill, 1974 shows that one of the main features of the First Schedule to the Customs Tariff Act is that the description of the articles is based on the Brussels Tariff Nomenclature (BTN), now known as the Customs Cooperation Council Nomenclature (CCCN). The relevant headings in the CCCN and the Indian Customs Tariff Schedule are set out below :CCCN Customs Tariff Schedule HeadingHeading No. 84.41 Heading No. 84.41"Sewing machines ; furniture Sewing machines ; furniture speciallyspecially designed for sewing designed for sewing machines ; Sewingmachines ; Sewing machine machine needles :needles".
(1) not elsewhere specified ; (2) domestic sewing machines".
Relevant extracts from the Explanatory Notes to BTN Under heading 84.41 are also reproduced below : "In addition to the ordinary sewing machines used in the home or by tailors, dress-makers, etc., the heading also covers special machines which can be used only for certain other kinds of sewing, such as : (1) Sewing machines used in the manufacture or mending of boots or shoes or for other leather sewing.
(2) Machines for button-hole sewing; these may include a device for cutting the botton-hole.
(6) Machines for sewing up sacks after filling (flour or cement sacks, etc.); these machines may be suspended and generally have no shuttles.
(8) Over-sewing machines for the manufacture of sacks, for working the edges of blankets, carpets, etc.
(10) Machines for sewing together, edge to edge, parts of knitted garments.
In addition to sewing, certain of the machines of this heading may also perform other operations, e.g., cutting, pinking, perforating or pleating fabrics, leather, paper, etc".
12. It may be observed from the Explanatory Notes reproduced above that heading 84.41 of the BTN covers within its ambit ordinary sewing machines used in the household or by tailors, dress makers, etc., on the one hand and special machines which are used only in certain other kinds of sewing, examples of which are also given. From these examples, it is clear that the sewing machines of the latter type are machines for use in industrial establishments as opposed to household and tailoring and dress making establishments. In other words, sewing machines used in the household and tailoring and dress making establishments, etc., form one group and the other group comprises sewing machines designed for special industrial purposes. Now, turning to heading 84.41 of the Customs Tariff Schedule we find that domestic sewing machines are classified under sub-heading (2) and all other sewing machines and certain other articles are classified in sub-heading (1) which reads "not elsewhere specified". The question is what are "domestic sewing machines?" The Customs Tariff Schedule, its chapter notes and section notes do not contain a definition or explanation of the expression "domestic" occurring in the sub-heading "domestic sewing machines". The Customs Tariff Schedule is based on the Brussels Tariff Nomenclature with suitable adaptations. As seen from the statement of Objects and Reasons, annexed to the Customs Tariff Bill, 1974, one of the main features of the First Schedule to the Customs Tariff Act (with which we are concerned) is that the description of the articles is based on the BTN. Though the Explanatory Notes to the BTN have no legal force, they represent expert opinion of an international organisation (Customs Cooperation Council) on matters of classification under the Brussels Nomenclature which is, as noted earlier, the basis of the First Schedule to the Customs Tariff Act of 1975. Therefore, these explanatory notes are Of considerable persuasive value in the matter of interpreting expressions occurring in the Customs Tariff Schedule as well as ascertaining the scope of headings therein. It has been noted earlier that the Explanatory Notes to BTN under heading 84.81 show that the said heading covers 2 types of sewing machines (plus some other articles), namely, ordinary sewing machines used in homes or by tailors, dress makers, etc. and special machines which can be used for some other kinds of sewing, the examples given of the latter special machines being essentially ones for industrial application. It would, therefore, be appropriate to interpret sub-heading (2) of heading 84.41 of the Customs Tariff Schedule "Domestic sewing machines" as embracing within its scope such ordinary sewing machines as are used in homes or by tailors, dress makers, etc.
13. In the present case, the finding of the Assistant Collector that the goods imported by the appellants were found to be capable of being used in Singer sewing machines model 310 (which is stated to be a domestic sewing machine) has not been rebutted either in appeal or in the revision application. Further, as the Appellate Collector has noted, the sewing machine of Model TA-I-C-10 (of which the "rotating hook" is claimed to be a part) is described as most suitable for tailors and dress making shops unlike other models which are described in the catalogue produced by the appellants as ideal for industrial use. Prima facie, therefore, the rotating hooks in the present case would fall for classification under sub-heading (2) of Heading 84.41.
Note 2(b) to Section XVI requires that a part, if suitable for use solely or principally with a particular kind of machine, should be classified with machines of that kind. In this case, it has been shown that the machines for which the "rotating hooks" are claimed to be parts are "domestic sewing machines" and, therefore, the rotating hooks are to be classified as parts of domestic sewing machines under Headinge 84.41(2). This would be the appropriate classification even if one were to rule out the application of the aforesaid Section Note 2(b) because of Interpretative Rule 3(c) according to which "when goods cannot be classified by reference to Rule 3(a) or Rule 3(b) (both of which do not apply in the instant case), they shall be classified under the Heading which occurs latest amongst those which equally merit consideration".
14. Having regard to the discussions contained in the aforesaid paragraphs, we are of the view that the correct classification of the goods in the present case is under sub-heading (2) of heading 84.41 of the First Schedule to the Customs Tariff Act of 1975. In the result, the order of the Appellate Collector of Customs, Bombay is upheld and the appeal is rejected.