Customs, Excise and Gold Tribunal - Delhi
Gordon Woodroffe And Co. vs Collector Of Customs on 18 August, 1986
Equivalent citations: 1986(10)ECC53, 1987(10)ECR91(TRI.-DELHI), 1987(27)ELT99(TRI-DEL)
ORDER S. Duggal, Member (T)
1. In the two appeals capitoned above, the surviving issue is common; namely, as to whether items imported as "springs" by the appellants merit classification as parts of machinery under Tariff Item 84.29 of CTA or as articles of General Use depending upon their composition vis-a-vis the metal and correspondingly under T.I. 73.33/40. The authorities below have gone by the definition given in Section Note 2(b) to Section XV of the CTA, and 'springs' have been treated as "parts of general use", irrespective of their use in machinery or mechanical equipment It was, therefore, held that all steel springs were correctly classifiable under TI 73.33/40 of the CTA.
2. Today, Shri K.V. Kunhikrishnan appearing for the appellants in both the appeals has argued that Chapter 73 falls under Section XV, and that a reference to the Section notes reveals that note 1 of this Section which contains exclusion clauses; mentions, inter alia, vide clause (f) that 'articles falling within Section XVI (machinery, mechanical appliances and electrical goods)', and that this Section Note 1 precedes Note 2 on which the authorities below have placed reliance. Shri Kunhikrishnan contends therefore that whatever stands excluded by virtue of Note 1 from Chapter 73 itself could not fall thereunder by applying Note 2(b), and that in view of the fact that these springs had catalogue part numbers, and specific design, and were meant exclusively for the milling machinery; they have to be treated as parts of machinery, and would not go under T.I. 73.33/40 of the CTA.
3. Shri J. Gopinath, on the other hand, invites our attention to the emphasis in Note 2 to the effect that definition given therein is meant to operate throughout the 'Schedule' to the Customs Tariff Act, which means that articles falling under Whichever Chapter of the Schedule to the CTA would be subject to application of Note 2, in Section XV. He has further pointed out that Note 1(g) of Section XVI itself states that parts, though of machinery, which are covered under Note 2 to Section XV would not fall under Section XVI; namely, the Section dealing with machinery and parts thereof. To elaborate his point, and to bring out intention of the legislation, he has referred us to the Chapters and Section Notes following Section XVI also; namely, XVII, XVIII & XIX, where the goods are of a highly special nature; such as locomotives, vessels and aircrafts, but every Section Note quotes that articles of general use, as covered by Note 2 to Section XV, would not fall within the said respective Chapter. Shri Gopinath argues that this inference is obvious, to the effect that the definition of Note 2, though given under Section XV, is to operate throughout the Schedule of the Tariff, and whatever is excluded from the respective Chapters, shall have to be excluded for all purposes.
4. We have given our very careful thought to this matter, because of this point raised by Shri Kunhikrishnan laying stress on. the fact that Section Note 1(f) of Section XV excludes from Chapter 73 itself machinery and appliances thereof, and that Note 2 has to be subject to Note 1. We, are of the view that this argument would have been very plausible, had there been no further exclusion note in the respective Section Notes, covering the Chapter of machinery also. Section XV, by specific mention, could be said to have not excluded parts of general use, as defined in Note 2, in case they were saved by Section Note 1 thereof, but for the exclusion clauses in related Chapter, that being Section Note 1(g) to Section XVI in this case, though they would ordinarily fall under Section XV but for this exclusion. This intention as has been pointed out by the learned SDR is very expressly spelt out, by all Section notes which deal with highly specialised goods besides, machinery such as locomotives, vessels, aircrafts etc. Obviously by virtue of exclusion clause in each Section note, even though these items like springs, may be for specific purposes, they stand excluded from the respective headings, and we have to revert to Chapter 73, by virtue of Note 2. We, therefore, do not find any ground having been made out to accept the arguments of Shri Kunhikrishnan, and find no infirmity in the orders passed by the authorities below, in regard to this item. No interference is called for, and the appeals are dismissed accordingly.