1. This Appeal is directed against the order dated 29-2-1992 of Collector (Appeals), Calcutta.
2. Appellants imported components of 25 K.V. Vacuum Circuit Breaker, claiming assessment under Heading 8538.90 read with Notification No.60/87-Cus. and 109/91-Cus. The goods were described in the Bill of Entry: "Components for 25 K.V. Vacuum Circuit Breaker (viz. Vacuum interrupter bottles types - V 506 - 7...) (Parts of high voltage circuit breaker of over 400 volts)." The claim was rejected by both authorities below on the ground that the goods are not classifiable under CTH 85.36 and considering that these are for 25 K.V. circuit breaker, they would be classifiable only under 85.35. The benefit of concessional rate of duty is applicable only to parts of goods which are classifiable under Heading 85.36 as mentioned in table annexed to the Notification.
3. Arguing on behalf of the appellants' the ld. Counsel submitted that the goods are directly covered under the description given in Notification. The heading cannot control the plain meaning of the Notification and in this connection he cited the case of Frick India Ltd. v. U.O.I. reported in 1990 (48) E.L.T. 627 (S.C.).
4. Arguing on behalf of the Revenue the ld. DR on the other hand submitted that though item 85.38 referred to in the Notification covers parts of CTH 85.36, 85.35, 85.37, the Notification makes clear that part of only goods such as are classifiable under CTH 85.36 would be eligible for exemption.
4. We have heard both sides. For the sake of clarity we are extracting the relevant portion of the Notification No. 60/87 from the Appeal Memo itself:"10 85.36 Fuses, automatic circuits switches and other 40% Ad or apparatus for protecting electrical circuits or for valorem" 85.38 making connections to or in electrical circuits of 400 volts and above or of 20 amperes and above 5. The notification exempts Automatic Circuit Breakers among others for protecting electrical circuits or for making connections to or in electrical circuits of 400 volts and above. The impugned goods as admitted in the appeal memo itself are components of 25 K.V. Vacuum Circuit Breaker. In other words these are for electrical circuit breakers of more than 1,000 volts. CTH 85.36 covers circuit breakers for making connection to or electrical circuit for voltage not exceeding 1,000 volts.
6. The exemption is not only to such electrical apparatus as mentioned in the Notification but also parts of said goods. The reference in Notification is to "parts of aforesaid goods". The exemption is to parts of circuit breakers for electrical circuit of 400 volts and above as are classifiable under Heading 85.36. In other words by indicating classification as 85.36 it is clear that the legislature intended to exempt parts of such circuit breakers for making connection to electrical circuit of 400 volts and above but not exceeding 1,000 volts. The Notification itself exempts goods specified in column 3 of the table annexed thereto and falling under heading number or sub-heading of the first schedule of the Customs Tariff Act specified in column 2 of the said table. Column 2 of the table indicates classification of circuit breakers under Heading 85.36. The expression in regard to parts reads "or parts of aforesaid goods". The goods as mentioned in the Notification are electrical apparatus for use in electrical circuit breaker of 400 volts and above. The fact that the goods must be classifiable under CTH 85.36 indicates that though the electrical apparatus may be for electrical circuit of 400 volts and above but because such goods were to fall only under heading 85.36 such goods for protecting the electrical circuit exceeding 1,000 volts are not entitled to this exemption. Parts by themselves are classifiable under Heading 85.38 which is indicated in the column 2 of the Notification. CTH 85.38 covers parts suitable for use solely or principally with the goods of the Heading 85.35, 85.36 or 85.37. Since goods are parts of circuit breakers for circuit of 25 K.V. these goods are parts only of CTH 85.35 even though by themselves they fall under Heading 85.38. What Notification therefore exempts is parts classifiable under Heading 85.38 of goods suitable for use solely or principally with goods falling under Heading 85.36. Merely because 85.38 dealing with classification of parts is also mentioned in the table annexed to the notification would not mean that parts of 85.35 also would be covered by this Notification. Parts of only such goods as fall under Heading 85.36 would be entitled to exemption. The case of Frick India Ltd. v. U.O.I. (supra) is distinguishable and cannot be of any assistance to the appellants. In that case Hon'ble Apex Court held that headings prefixed to Sections or entries cannot control the plain words of the provisions. The scope of sub-item 3 of the 29A is not restricted nor controlled by sub-clause (1) and (2) of the Tariff Item 29A. On the other hand, the Hon'ble Apex Court held in the case of EskayefLtd. v. C.C.E. reported in 1990 (49) E.L.T. 649 (S.C.) that exemption granted under Notification 6/84-C.E., dated 15-2-1984 is confined in its application to goods specified in the schedule annexed to the said Notification which fall under item 68. The Notification does not grant exemption to goods falling in any other entry of tariff.
The insertion of animal feed supplement in schedule to Notification dated 1-11-1982 by notification dated 15-2-1984 would not mean that a product which was liable to payment of Central Excise Duty under item 14E would be classifiable under Heading 68 by virtue of an insertion in an exemption notification. The goods in that case were animal feed supplements. Notification exempted animal feed supplements classifiable under Item 68 only. The particular animal feed supplements in question were however patent and proprietary medicines classifiable under item 14E of the erstwhile tariff. The position here is that exemption is granted only to such goods as fall under Heading 85.36 and to parts of such goods as fall under Heading 85.36 since the expression is "parts of aforesaid goods". The expression "or parts of aforesaid goods" refers only to parts of goods described in the Notification as fall under CTH 85.36.
7. CTH 86.35 covers circuit breakers for electrical circuit exceeding 1,000 volts and 85.36 covers circuit breakers for circuits not exceeding 1,000 volts. The impugned good are for electrical circuits of 25,000 volts which obviously fall under CTH 85.35 and not under CTH 85.36. The case of Jain Engineering Co. v. CC, Bombay 1987 (32) E.L.T.3 (S.C.) is distinguishable. In that case Notification clearly covered the goods in question. The position here would have been different if the Notification had mentioned goods for electric circuit of 25 volts.
In such case it could have been argued that since Notification clearly covers the goods in question, mention of CTH 85.36, under which goods for 25 volts obviously cannot fall, cannot have the effect of denying exemption. This is not the case here. Though Notification mentions "for electrical circuits of 400 volts and above" without indicating the cut-off limit of voltage the fact that such goods, at the same time, have to be classifiable under Section (sic) 85.36, would only mean that the Notification has to be read as "in electrical circuit of 400 volts and above but not above 1,000 volts".
8. The expression "parts of aforesaid" would refer only to parts of such goods as for circuit of 400 volts and above but not exceeding 1,000 volts. Since, the exemption granted only to parts of such goods as fall under CTH 85.36 the appellants are not entitled to exemption.