Full Judgment
2. Briefly stated the facts of the case are that the appellants are engaged in the manufacture of Fans. They have a fresh Laminations Division for the purposes of manufacturing of Lamination of various types and designes required for fan motors. The Laminations are made from Silicon Steel Strip/Rolls. The Strip/Rolls are fed in a Press on which progressive steel die as per design of the Lamination required is fitted and punched. According to the appellants the die can be mounted on any Lamination Press and is specifically made as per a particular lamination drawing and for different type/design of lamination different dies are required. The appellant imported a consignment of progressive Steel Dies with Design and Development and spares thereof and presented their Bill of Entry for clearance of the goods for home consumption. The appellant claimed classification of the goods under Customs Tariff Heading 8207.30. However, the Customs did not agree with the classification sought by the appellant and held that on the basis of the examination report the goods fell under Customs Tariff Heading 9806.00 read with 8479.89 and were liable to duty under Notification Nos. 68/87 and 157/88.
3. Shri A.S. Sunder Rajan, the ld. Consultant appeared for the appellant and Shri R.K. Kapoor, the ld. SDR for the respondent. The appellants contended that similar goods cleared in the past by the Customs Authorities on two occasions were classified under Customs Tariff Heading 8207.30 as interchangeable parts and that the report of the dock appraiser and the Asstt. Collector conformed to the description given in the Bill of Entry and the Invoices. It was also argued by the appellants that the goods imported were in the nature of articles under Customs Tariff Heading-82 and, therefore, they could not at the same time be classified under Chapter Heading 84. It was also argued that Chapter Notes 1 under Chapter 84 (Section XVI) reads as follows :- That Progressive Steel Die is nothing but an interchangeable tool for machine tools and is specifically mentioned under Chapter 82 with sub-heading 8207.30. The ld. Consultant therefore, submitted that in view of the past practice and the Chapter Notes, the goods deserve classification under 8207.30.
4. The Departmental Representative submitted that with the introduction of the new Tariff Heading 98.06 as per budget of 1987 it changed a number of Tariff entries and the criteria of assessment in many ways hitherto followed in the past. Many of the existing stipulations under Chapter Notes and Section Notes were no longer followed for many items for purpose of considering their re-classification under new Tariff Heading 98.06. He also pointed out that Note 1 to Chapter 98 clarified that new heading was applicable to all goods finding location in a machine etc., even though they were covered by more specific heading elsewhere in the Tariff Schedule provided they were not otherwise excluded by virtue of notes of Chapter 78. It was also submitted on behalf of the Department that although tools are included in separate Chapter of the Tariff namely Chapter 82 to distinguish them as separate items from machine or part thereof falling under Chapter 84. The amendment of Notn. No. 69/87 by per Norn. No. 52/88-Cus., dated 1-3-1988 provided that items falling under Chapter 82 or 83 would also be included within the purview of Tariff Heading 9806.00 but would remain excluded from the scope of Notn. 69-Cus/87, dated 1-3-1987. It was also contended on behalf of the Department that proviso to Notn.
No. 69-Cus/87 as amended by Notn. No. 52/88-Cus., dated 1-3-1988 stipulates that nothing contained in the said Notn. shall apply in respect of items as indicated in SI. No. I to SI. No. XIV of the said notification. Thus, it was contended that the implication was quite obvious. It was argued that this clearly showed that the goods imported were covered by Heading 9806.00 but were not covered by Notn. No.69/87-Cus., for purpose of extending benefits under the said Notn. In regard to two similar consignments allowed Customs clearance earlier, the ld. SDR submitted that it did not show that it was the established practice and that two cases were not before the Tribunal to comment on them.
5. Heard the submissions of both sides and considered them. In regard to the contention of the appellant that two similar consignments were allowed by Customs to be imported on earlier occasions by classifying them under Customs Tariff Heading 8207.30 we find that no evidence has been brought on record to show that this was an established practice.
Moreover, we find that there is no penalty imposed in the instant case and it is a simple case of classification. We, therefore, do not see any reason as to why these two stray incidents in which clearance was allowed under different Chapter heading should be treated as an established practice. It was also argued by the appellant that Chapter Note 1 of Section XVI excluded the articles of Chapter 82 or 83, however we find that we are not considering the applicability of Chapter 84 and hence these arguments are not relevant.
6. On careful consideration of the submissions made by both sides, we find that there is force in the contentions of the ld. SDR in so far as re-classification of goods under Tariff Item 98.06 is concerned. The admitted position is that the goods were imported and were sought clearance under Chapter 82, under the actual user clause of the Import Policy. We also observe that the said goods were to be mounted on a press machine and were made specifically as per particular Lamination drawing/design. These imported goods, therefore, were parts of machines imported by the actual user in accordance with Note-I to Chapter 98. We observe that the note provides :- "this chapter is to be taken to apply to all goods which satisfy the conditions prescribed therein, even though, they may be covered by a more specific heading elsewhere in this schedule." "Parts of machinery, equipments, appliances, instruments and articles of Chapters 84,85,86,89 and 90." Further, we find that Notification No. 69/87-Cus., dt. 1-3-1987 as amended by Notification No. 52/88, dt. 1-3-1988 inter alia provides :- "Central Govt. exempts parts falling under heading No. 98.06 of the 1st Schedule to the Customs Tariff ... provided that nothing contained in this notification shall apply in respect of ... XI) articles in chapters 82 or 83." 8. We also observe that the appellant had claimed classification under Chapter sub-heading 82.07 which reads, "Interchangeable tools for hand tools, whether or not power operated or for machine tools (for example for pressing, stamping, punching, tapping, threading, drilling, boring, broaching, milling, turning or screw driving) including dies for drawing or extruding metal and rock drilling or earth boring tool." 9. On reading the two entries under Chapter Heading 82.07 and 98.06 together, we find that the items mentioned against Chapter sub-Heading 82.07 fit in the description of items mentioned against Chapter Heading 98.06. Further, when we go through the contents of Notification No.69/87-Cus., dt. 1-3-1987 as amended by Notification No. 52/88-Cus., dt.1-3-1988, we further get support that Chapter sub-heading 98.06 also covers articles of Chapter 82. Having regard to all these facts and circumstances we hold that the progressive steel dies with design and development and spares thereof shall be classified under Chapter sub-heading 98.06.
10. In view of the above findings we uphold the impugned order and reject the appeal.