Full Judgment
2. We have gone through the aforesaid judgment of the High Court. We have also gone through the impugned order and have heard the ld. JDR.In support of the Revenue's contention, we observe that Chapter Note 1(b) of Chapter 84 specifically excludes "appliance or machinery (for example Pumps) or parts thereof, of Ceramic material (Chapter 69)". It is, therefore, clear that in view of this note ceramic article, even if it is a part of a machine or an appliance will not fall under Chapter 3. Judgment of Bombay High Court relied upon by the apellants is of no help to the appellants inasmuch as there is no reference to such a note in the said judgment as is available before us. Consequently, we dismiss the appeal of the appellants herein.
4. Question involved in the other appeal is regarding the classification of ceramic filter element. The lower authority has classified the same under Tariff Heading 87.08 on the consideration that the said part is a part of accessories of motor vehicle falling under Tariff Headings 8701 to 8705. Lower authority has also observed that Chapter 87 does not have any restrictive exclusion clause like that in Chapter 84. Therefore, the item has been held to be rightly classifiable under Heading 8708.00.
5. Against the aforesaid order the Revenue has come in appeal, stating that the lower appellate authority has fallen into an error of fact and law. It is pointed out that Note 2(e) of Section XVII, excludes "machines and apparatus of Heading Numbers 84.01 to 84.79 and parts thereof". Filter elements are specifically classified under Tariff Heading 84.21. Therefore by virtue of Note 1 (b) of Chapter 84, Ceramic parts of Chapter 84 will be covered under Chapter 69 and not under Chapter 84. It has, therefore, been urged by the Revenue and reiterated by the ld. JDR that the proper classification of ceramic filter elements would be under Tariff Heading 69.11.
6. We have carefully considered the pleas advanced from both sides. We agree with the reasoning advanced by the Revenue in its appeal. The lower appellate authority has obviously not noticed Note 2(e) of Section XVII of the CETA, 1985 and that is why the error has occurred into his order. Consequently we set aside the impugned order, so far as this item is concerned and allow the appeal of Revenue to this extent.