Full Judgment
2. On hearing both sides, we notice that the scheme of the Customs Tariff Act, as outlined in Note 2(a) to Section XVI and in Interpretative Rule 3(a), is that if there is separate heading provided for the parts themselves, the parts are to be assessed under that heading; otherwise, they are to be assessed under the heading relating to the main equipment of which they are a part. In the present case, Heading 85.04 invoked by the lower authorities is a specific heading for "electric accumulators". We are told that electric accumulators are rechargeable storage batteries, as distinct from dry batteries or primary cells. The appellants admit that the heading "electric accumulators " would broadly cover the Nickel Cadmium cells imported by them. But they draw a distinction saying that while electric accumulators usually use a liquid as the electrolyte the cells imported by them use Potassium Hydroxide in a paste form as electrolyte. We do not consider that the nature of the electrolyte used would take the imported cells out of the general category "electric accumulators". The technical book, "A Dictionary on Electronics" by S. Handel, which the appellants showed us during the hearing, itself says that usually the accumulators use a liquid as electrolyte. This description itself leaves room for use of other electrolytes, i.e., in other than liquid form. Since Heading 85.04 is a separate and specific heading for the cells imported, we hold that the lower authorities were correct in classifying them under that heading. Their action is in conformity with the statutory scheme of classification of parts in the Customs Tariff and confirm it.
3. Coming to the Exemption Notification No. 172/77-Customs, we find that it is applicable to parts of receiver sets falling under Heading 85.15. Since the cells imported by the appellants have been held to fall under Heading 85.04 and not Heading 85.15, the exemption is not applicable to them. Accordingly, we confirm the assessment of basic customs duty made under Heading 85.04 and reject the appeals in so far as they relate to basic customs duty.
4. Except in the case of three appeals, viz. Appeals No. 1099, 1100 and 1101/85/B2, an additional claim for refund of countervailing duty was also made by the appellants. The claim was on the ground that 20% duty should have been charged by virtue of exemption Notification No.94/76-C.E., dated 16-3-1976. On hearing both sides, we observe that this exemption is applicable to metal jacketed dry batteries. As already stated in the preceding paragraph 2, Nickel Cadmium cells imported are rechargeable storage batteries and not dry batteries. The exemption, is, therefore, not applicable to them. However, it appeared to us that since the cells were storage batteries, their assessment should have been under sub-item (2) of Item 31 of the Central Excise Tariff which attracted the lower rate of 20% - the same rate which the appellants had claimed in terms of the exemption notification. We put this to the learned representative of the department. He had no comments to make. The order that countervailing duty be re-assessed under Item 31(2) CET and consequential refund given to the appellants.
5. Except for the above relief in countervailing duty in six of the Appeals No. 63, 325, 326, 327, 329 and 1098/85-132, the appeals are otherwise rejected.