Customs, Excise and Gold Tribunal - Delhi
Hindustan Sanitaryware And Industries ... vs Collector Of Customs on 29 January, 1993
Equivalent citations: 1993ECR98(TRI.-DELHI), 1993(66)ELT683(TRI-DEL)
ORDER G.P. Agarwal, Member (J)
1. The issue involved in both the present appeals centres around the interpretation of Notification No. 242/76-Cus., dated 2-8-1976 and Notification No. 112/87-Cus., dated 1-3-1987.
2. Brief facts leading to the present dispute are that, the appellants imported Specialised Cordierite/Mullite Refractory Special Shapes (Blocks) Batts which were assessed to duty by the Customs Authorities under Heading 6902.90 at the rate of 60% basic duty + 40% auxiliary duty + 15% C.V. duty without extending the benefit under Notification No. 242/76-Ctts., dated 2-8-1976 and Notification No. 112/87-Cus., dated 1-3-1987. It appears that subsequently the appellants filed their two separate refund claims on the ground that imported refractory bricks of special shape or quality were exempt from basic customs duty in excess of 40% ad valorem in terms of Notification No. 242/76-Cus., dated 2-8-1976 and further that the same were also exempt from auxiliary duty of Customs under Notification No. 112/87-Cus., dated 1-3-1987. The Assistant Collector of Customs rejected the same by his two different Orders. Against these two Orders of the Assistant Collector the appellants filed their two separate appeals before the Collector (Appeals) who vide his common Order-in-Appeal rejected the same. Hence the present two appeals.
3. Arguing on behalf of the appellants, Shri B. Saha, learned counsel, submitted that the authorities below erred in rejecting the refund claims of the appellants on the ground that the subject goods, namely, refractory bricks imported are "spares" for future use in the furnace and not "component" for erection of furnace in the factory of the appellants. It was stressed by him that the Collector (Appeals) erred in making a distinction between "Spares" and "Component" by defining "Spares" as those for future use in the furnace, and the "Components" as those which go into erection of furnace. He took us through the said Notification No. 242/76-Cus. and also to Notification No. 112/87-Cus. and submitted that these Notifications exempt refractory bricks of special shape or quality for use as component parts of industrial furnaces and submitted that, since the Customs Act does not define the term "Component Parts" reference is permissible to the dictionary meaning of the word "Component" as laid down by the Supreme Court in the case of Star Paper Mills Ltd. v. Collector of C. Excise, 1989 (43) E.L.T. 178 (SC) . He laid stress on paragraph 3 of the Report wherein it is stated by the Supreme Court that according to the Webster Comprehensive Dictionary, International Edition the word "Component" inter alia means a constituent part. He also cited the case of Electrosteel Castings Ltd. v. Collector of C. Excise, 1989 (43) E.L.T. 305, wherein the term "Part" of a machine has been stated to mean that "A component, whose absence will disable a machine or appliance, must be regarded as an essential ingredient or part of that machine". The case of Hatim Carbon Co. (P) Ltd. v. Collector of Central Excise, Bangalore, 1988 (17) E.C.R. 241, was also cited wherein it was held that "Carbon brushes used in electric motors fall in the specific entry for 'parts of electric motors'". He also referred to Mc Graw Hill Dictionary of Scientific and Technical terms - 4th Edition, wherein "Component" has been defined as 'A constituent part of a system' and "Part" as 'An element of a sub-assembly, not normally useful by itself and not amenable to further disassembly for maintenance purpose'. Reference was also made to Chambers 20th Century Dictionary, New Edition, wherein "Component" has been defined as 'making up; forming one of the elements or parts; one of the parts or elements of which anything is made up or into which it may be resolved' and "Part" as 'something less than the whole; a portion; that which along with others make up, a constituent; a component'. To top his argument, he also drew our attention to certain Notifications, such as, Notification Nos. 138-Cus. dated 27-6-1979; 349/86-Cus. dated 16-6-1986; 350/86-Cus. dated 16-6-1986; 155/86-Cus. dated 1-3-1986; and 158/86-Cus. dated 1-3-1986 to show that wherever it was intended by the Government that the exemption is to be extended only to those component parts which are imported for initial setting up of machines etc. it is said so in the Notifications itself. Since in the Notifications under reference it is not stated that it exempts refractory bricks of special shape or quality only when these are imported for the purpose of initial setting up of industrial furnace, no distinction can be drawn between "Component Parts" and "Spares".
4. In reply, the learned SDR, Smt. JMS Sundaram, submitted that the said issue was duly considered by this Tribunal in the case of Vaz Forwarding Pvt. Ltd. v. Collector of Customs, 1989 (43) E.L.T. 358, wherein it was held that the same parts when initially used in the assembly or manufacture of the machine would be called "component parts" whereas the same parts imported for subsequent replacement of its part of initial assembly has to be considered as a "spare parts". It was stressed by her that the same view was reiterated by this Tribunal in the case of Vidyut Greenbank Castbasalt Pot. Ltd. v. Collector of Customs, Bombay, Order No. C/142/92-D dated 17-3-1992 reported in 1992 (61) E.L.T. 89 (Tribunal). In his rejoinder, Shri B. Saha, learned counsel, submitted that in view of the said submissions, the decision rendered by this Tribunal in the case of Vaz Forwarding Pvt. Ltd., supra, be referred to the Larger Bench.
5. We have considered the submissions. For ready reference the said Notifications may be extracted as below :-
'NOTIFICATION NO. 242-CUS, DT. 2-8-1976 Exemption to refractory bricks of special shape or quality for use as component parts of industrial furnaces. - In exercise of the powers conferred by Sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts refractory bricks of special shape or quality for use as component parts of industrial furnaces falling under Heading No. 69.02 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), from so much of that portion of the duty of Customs leviable thereon, which is specified in the said First Schedule, as is in excess of 40 per cent ad valorem."
"EXEMPTION NOTIFICATION NO. 112-CUS., DATED 1-3-1987 (so far relevant) Total exemption from auxiliary duty to certain specified goods -
In exercise of the powers conferred by Sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), read with sub-clause (4) of clause 95 of the Finance Bill, 1987 which clause has, by virtue of the declaration made in the said Finance Bill under the Provisional Collection of Taxes Act, 1931 (16 of 1931), the force of law, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in column (3) of the Table annexed hereto and falling within Chapters of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) specified in the corresponding entry in column (2) of the said Table, when imported into India, from the whole of the auxiliary duty of customs leviable thereon under sub-clause (1) of clause 95 of the said Finance Bill.
THE TABLE
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S. No. Chapter of the First Description of goods
Schedule to the Cus-
toms Tariff Act, 1975
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(1) (2) (3)
28. 69 Refractory bricks of special shape
or quality for use as component
parts of industrial furnaces.
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(NOTIFICATION NO. 112/87-Cus., dt. 1-3-1987)"
From a reading of the said Notifications, it is clear that, these Notifications exempt refractory bricks of special shape or quality for use as component parts of industrial furnaces. The word "Component Parts" used in these Notifications cannot be ignored. If it was the intention of the Notification to exempt parts used for initial assembly as well as parts imported later for replacement, the Notification should not have used the word 'Component' and should have really mentioned "Parts". In other words, the use of the word "Component" is indicative that the same parts when initially used in the assembly or manufacture of the machine would be called "Component Parts" whereas the same parts imported for subsequent replacement of its part of initial assembly has to be considered as "Spare Parts". This was the view taken by this Tribunal in the case of Vaz Forwarding Pvt. Ltd. v. Collector of Customs, supra. We do not find any reason to take a different view after having considered the submissions made by the learned counsel for the appellants. The contention of the learned counsel that whenever the Government intended that the exemption is available only when the parts are imported for the purpose of initial setting up, it is stated so by the Government in the Notification itself and since in both these Notifications under reference the words "for the purpose of initial setting up" are absent, the intention of the Government was that the exemption would be available if refractory bricks of special shape or quality are imported for use as component parts of industrial furnaces whether for the purpose of initial setting up or as spares, cannot be accepted. For, it is settled law that while interpreting an exemption Notification the Courts are not to ascertain the intention of the Government by a comparison of expression used in the two different Notifications. See: Coromandel Fertilizers Limited v. Collector of Customs, Madras, 1986 (25) E.L.T. 861 (SC). Both these Notifications under reference have been couched in clear and unambiguous language. Both these Notifications use the word "Component Parts" and not only "Parts". Before we part, it may be stated that reference made by the learned counsel to certain Minutes of the Tariff Conference of Collectors of Customs held at Delhi on 2nd November, 1987 wherein after considering the scope of expression "Component Parts" appearing in Notification No. 156/86-Cus., dated 1-3-1986, Notification No. 26/84-Cus., dated 22-2-1984 and Notification No. 242/76-Cus., dated 2-8-1976, it was observed that the Board's Office (TRU) was to amend such Notifications saying it clearly that parts and spare parts are covered by them, is also of no help to the appellants. Firstly, because it was never amended, as suggested by the conference and secondly, because a statutory Notification is a law and by issuing trade notice, trade circular, the Department cannot add to the terms and conditions to the Notification nor they can change the meaning and scope of the exemption. See: Mangalore Chemicals & Fertilizers Ltd. v. Assistant Collector of Central Excise, Mangalore, 1986 (23) E.L.T. 48 (Kar). Moreover, the Collectors' Conference view has no binding effect in so far as this Tribunal is concerned. See : Jyoti Limited v. Collector of Customs, Bombay, 1988 (33) E.L.T. 529 (Tribunal) -1983 ECR 1527. In fact, on the point of repetition the said Notification was never amended, as suggested by the Tariff Conference.
6. In the result, we find no substance in the appeals and reject the same.