Judgment:
1. This appeal arises from common order dated 20-11-1989 passed by the Collector of Customs (Appeals), Bombay.
2 The appellants have also filed supplementary appeals along with COD application. As the supplementary appeals arise from the Order-in-Original which is merged with the impugned order and in view of the prevailing practice, the application for condonation is allowed and the supplementary appeals are taken up for disposal as per law.
3. The short question that arises for consideration in these appeals is as to whether the appellants are entitled for the benefit of SI. No. 32 of the Notification No. 125/86 which covers for goods falling under Chapter 94 and the SI. No. 32 refers to Multi-layer coater/extruding machine. There is no dispute in these appeals that the item imported is multi-layer coater/extruding machine and on merits it is classifiable under Chapter 84. The lower authorities have denied the exemption of this Notification No. 125/86 on the ground that the goods have been assessed under Heading 98.01 and that Notification 132/85 is a specific Notification covering goods falling under Heading 98.01 and as such benefit of Notification No. 125/86 is not available to the importer.
4. We have heard both the sides in this matter. The Hon'ble Supreme Court in the case of Abrol Watches Pvt. Ltd. v. Collector of Customs, Bombay by its judgment dated 17th December, 1996 have interpreted the proviso to Notification No. 132/85 which states : - "Nothing contained in this notification shall affect the exemption granted under any other notification of the Government of India for the time being in force from the duty of customs specified in the said First Schedule in respect of the goods referred to in this Notification." 5. On interpretation, the Hon'ble Supreme Court has held that the goods if they are classifiable under any other heading and that heading has got a specific benefit under any notification, that benefit cannot be denied to the importer. The admitted fact in this case is that the classification under Heading 98.01 has merited in view of the goods having been imported under the Project Import (Regulations) Act.
Otherwise admittedly the goods are classifiable under Chapter 84 and as per SI. No. 32 of the said Notification, the imported goods would get covered for the benefit of the said Notification, in view of the clarifications and law laid down by the Hon'ble Supreme Court, which is as under: - "The assessee imported horological machinery. It was imported to be installed in a watch making factory. The import was treated as a project import within the meaning of Chapter 98 of the First Schedule of the Customs Act and the goods were cleared under Heading 98.01.
To project imports an Exemption Notification dated 19th April, 1985, as amended from time to time, applied. At the relevant time, such project imports were exempted from the customs duty leviable thereon in excess of 20% ad valorem. The Notification added, "Nothing contained in this notification shall effect the exemption granted under any other notification of the Government of India for the time being in force from the duty of customs specified in the said First Schedule in respect of the goods referred to in this notification".
There was another Exemption Notification which was dated 28-2-1985 as amended on 1-6-1985, which granted exemption from Customs duty to horological machines and testing equipments for manufacture or assembly of mechanical and quartz analog wrist watches and parts thereof over and above 10% ad valorem.
The assessee claimed the benefit of the second of the two Notifications referred to above (now called "the horological notification"). The Tribunal took the view that, since the assessee had chosen the classification under Chapter 98 as a project import, the assessee was not entitled to the benefit of the larger exemption given by the horological notification. The Tribunal relied upon a judgment of the Madras High Court in this behalf.
The horological notification exempted, as aforesaid, horological machines, etc., without specifying the heading under which they fell. Therefore, provided the machines were horological machines, they were entitled to the benefit of the exemption thereunder. The Madras High Court's judgment dealt with a case where the assessee claimed the benefit of an exemption notification which specified a particular heading, and it was held that since the assessee had chosen to classify his imports under that particular heading, he could not be granted an exemption that applied to another heading.
The clause that we have quoted from the project imports notification clearly specified that the exemption thereunder granted would not effect the exemption granted in respect of Customs duty under any other notification. The two notifications read together, therefore, leave us in ho doubt that the view taken by the Tribunal was erroneous. Though the assessee had cleared his goods under Heading 98.01, it was, for the reasons aforesaid, entitled to the benefit of the exemption given by the horological notification.
The appeal is allowed. The order under appeal is set aside. Refund shall be made in accordance with law 6. Therefore, there is no reason to confirm the impugned order and as such the impugned orders are set aside and the appeals are allowed in accordance with law with consequential relief, if any.