Full Judgment
speedometer; that their goods are of no use to any other apparatus or instrument other than speedometer which are classifiable under chapter 90 and as such the products could only be classified under sub-heading 90.33 as parts, accessories for machines, appliances, instruments or apparatus of chapter 90. They also challenged the ruling given by the Assistant Collector in relying on the HSN notes. The Collector (Appeals) in the impugned order took note of chapter note 2(a) of chapter 90 and rejected their claim. Hence the present appeal.
2. Shri Mohan Bir Singh along with Shri Curush F. Bilimoria, advocates appeared for the appellants and Shri Deepak Kumar, SDR appeared for the department.
3. Shri Singh stated that the products in question are made from plastics. He submitted four different types of such products in various colours. He stated that the approach of the appellate Collector is clearly wrong in law. He stated that the Collector made a grave error in passing the impugned order inasmuch as he failed to note the exceptions provided under chapter note 2(a) under chapter 90. He also stated that the products were sold to two customers namely M/s. Pricol, Coimbatore and International Instruments Ltd., Bangalore. He invited our attention to para 3 of the appellate order where the Collector (Appeals) has stated that their products were used by the Coimbatore purchasers in the manufacture of speedometer falling under sub-heading 90.29 which is evident from the jurisdictional Superintendent who wrote by his letter dated 9-11-1993 confirming the same. He read the provisions of chapter note XVI and note 1(1) which exempts the application of the said chapter in respect of products or articles which fall under chapter 90. He also stated that when we look into the chapter note 2(a) of chapter 90 there is a specific exemption provided under the said note which reads as "other than heading Nos. 84.85, 85.48 or 90.33" which has been omitted to look into by the appellate authority as well as the original authority. He states the crucial point in this case is effect of the above words. He states that the product has been used only for the speedometer. The speedometer has been provided to be classified under sub-heading 90.29. Where the parts are included in the sub-heading like 90.03 the words parts thereof are absent in heading 90.29. Therefore under the circumstances the products can only come under sub-heading 90.33, which is the omnibus entry. He therefore says that the product should come only under sub-heading 90.33.
4. Learned DR argued that one has to look into the classification list submitted by them. The product definitely comes under sub-heading 84.83. The product can only come under that entry because it is a specific entry. As against the omnibus entry one has to prefer specific entry. He also invited our attention to note 2 of Section XVI to buttress his argument. It is his submission that if the parts should come under sub-heading 90.33 Section note 2(a) will become redundant.
5. We have considered the rival submissions. If we take the argument of Shri Singh, namely the note under Section XVI it states that the note does not apply to articles of chapter 90. It is therefore clear from that the application of note 2(a) under that particular Section, in view of the specific provision contained in the said section itself. So the argument of Shri Deepak Kumar has to be rejected at the threshold.The relevant entries 84.83, 90.29 and 90.33 read as under:"84.83 - Transmission shafts (including cam shafts and crank shafts and cranks; bearing housings and plain shaft bearings gears and gearing, ball screws; gear boxes and other speed changers, including torque converters; plywheel and pulleys, including pulley blocks; clutches and shaft couplings (including universal joints). 90.29 - Revolution counters, production counters, taximeters, mileometers, pedometers and the like; speed indicators and tachometers, other than those of heading No. 90.33 - Parts and accessories (not specified or included elsewhere in this chapter) for machines, appliances, instruments or apparatus of chapter 90".
When we look into the same one has to look into it along with the facts before us. It is undisputed fact that the products manufactured by the appellants are parts of speedometer. The products manufactured by them are used in the manufacture of speedometers. This is confirmed in paragraphs 2 and 3 of the order of the Collector (Appeals) which also refers to the confirmation given by the jurisdictional Superintendent at Coimbatore.
6. Now the question is the consideration of the competing entries. For the sake of repetition it is the contention of the department that the products come under sub-heading 84.83. 84.83 no doubt deals with transmission shafts, gears and gearing, but the Section note XVI clearly states as pointed out by Shri Singh that it would be applicable to articles coming under chapter 90. When we look into chapter 90, speedometer comes under heading 90.29 i.e. the final product which contains one of the products manufactured by the appellants. The accessories and parts of the said speedometers have to be classified under sub-heading 90.33 only where the sub-heading itself deals with parts for e.g., sub-heading 90.03 deals with frames and mountings for spectacles, goggles or the like and parts thereof. The parts are contained in the said particular subheading. The tariff entry 90.29 does not speak of parts and accessories thereof. Therefore one has to file only under sub-heading 90.33.
7. The Collector in his order refers to note 2(a) of chapter 90 for his coming to the conclusion the way in which he has decided the case. The said note 2(a) reads as "parts and accessories which are goods included in any of the headings of this chapter or of chapter 84, 85 or 91 (other than headings 84.85, 85.48 or 90.33) or are in all cases to be classified in their respective headings". The Collector in our view went into a grave error when he omitted to consider the excepted portion which has been extracted above. Without the words other than headings 84.85, 85.48 or 90.33, the observation of the Collector may be correct but the effect of words "other than" clearly clinches the issue in favour of the appellants. Apart from that as stated above notes under Section XVI clearly states that the provisions of that Section note will not be applicable to the products manufactured under the products coming under chapter 90. In our view the approach of the lower authorities is clearly wrong. We therefore set aside the impugned order and classify the products in question under chapter sub-heading 90.33.