Judgment:
1. As in both the Appeals, common question of facts and law is involved hence they are taken together for disposal as per law.
2. This Appeal arises from the Order dated 20-2-1991 passed by the Collector of Customs & Central Excise (Appeals), Bombay. The appellant had claimed the benefit of Notification No. 217/85 for the components and parts used in nozzle and nozzle holders by their supplementary C.L.
No. 2/89, dated 20-8-1989 seeking retrospective approval with effect from 1-3-1989. They had filed an earlier Ch. No. 228/89 for the same product w.e.f. 1-3-1989 but had not claimed the said benefit. The Assistant Collector held that the notification in question exempts component parts of diesel oil 1C engines other than nozzle and nozzle holders, and it did not exempt component parts of 1C Engines. He also did not give retrospective effect to the Ch. 2/89. The Ld. Collector after a careful examination of their pleas before him rejected their contentions on the ground that Notification 217/85 granted to component parts of diesel oil operated 1C Engine, other than engine valves, jackets, nozzle and nozzle holders etc. and as the Notification did not grant the benefit to nozzle and nozzle holders, he rejected their plea.
As regards Notification No. 112/88 dated 1-3-1988 and Notification No.216/87 which specifically exempted nozzle and nozzle holders from the whole of excise duty on certain conditions, stipulated therein, the Ld.
Collector held that :- "The appellants use certain parts in the manufacture of nozzle and nozzle holders. They claim the benefit of Notification 217/85 for these parts used in the above manners. However, nozzle and nozzle holders are not enjoying exemption under Notification 217/85. When this being the case, the parts which go into the manufacture of nozzle and nozzle holders cannot enjoy the benefit of Notification 217/85. To accept the appellants' contention that these parts are to be treated as component parts going into the manufacture of diesel oil operated 1C engine would defeat the intention of Notification 217/85 since such an interpretation would automatically entitle nozzle and nozzle holders for the benefit of notification from duty under this notification. In other words, the trade notice and the CBEC & Circular referred to by the appellants are applicable only to those parts which go into the manufacture of those components which enjoy the benefit of exemption under Notification 217/85 and not otherwise.
In the result, the parts which go into the manufacture of nozzle and nozzle holders are not covered by Notification 217/85, dated 8-10-1985. They also will pay the appropriate rate of duty." 3. This Appeal arises from Order-in-Appeal dated 29-7-1991 passed by the Collector of Central Excise (Appeals), Pune. The Collector (Appeals) by this Order has held :- "I have gone through the written and oral submissions and find that the main issue regarding classification has been denied by my colleague and therefore, it is not open to me to go into that question again and even to direct the Assistant Collector to revise his stand. The issue involved in this appeal is the determination of the correct value for working out the duty. Since it is claimed by the Ld. Advocate that the correct value as indicated by them and which is lower than the value arrived at in this order, has been accepted by the Assistant Collector, I consider it appropriate to remand the matter back to Assistant Collector to determine the correct prices for the purpose of demanding duty. With a view to enable him to do so, the order passed by him is hereby set aside." 4. The appellant is aggrieved with these orders and is pleading in these appeals that the authorities below have unjustly denied the benefit of the notification in question, while the benefit has been extended to their competitors. It is their plea that Notification No.217/85 does not state that the assessee must manufacture the engines in their own factory. The notification exempts component parts of diesel oil operated 1C engines, which are intended for use in the manufacture of such engines. They state that engines need not be manufactured in the same factory and as they are following Chapter X Procedure, they satisfy the proviso to the said notification and hence the benefit should be extended. They contend that they are not claiming the benefit for nozzle and nozzle holders but are claiming the benefit for its component parts, as nozzle and nozzle holders are already exempt under Notification Nos. 112/89 & 216/87. They submit that nowhere it provides that in order to avail the benefit of Notification No. 217/85, nozzle and nozzle holders must enjoy the benefit of the same notification. It is their plea that parts of nozzle and nozzle holders manufactured by them are also parts of diesel oil operated 1C engines. Therefore, they contend that "a part of a part is a part of the whole". Thus, they plead that a part of a nozzle and nozzle holder must be considered to be a part of a diesel oil operated 1C engine. They further plead that the component of nozzle and nozzle holders are captively consumed in the manufacture of nozzle and nozzle holders. If they clear its component parts following the Chapter X Procedure prescribed under Notification No. 217/85, then they are undoubtedly entitled to the benefit of the said notification, as it cannot be denied that nozzle and nozzle holderss as also their components an are parts of diesel oil operated 1C engines. Therefore, they state that the denial of the benefit of this notification to these components which are captively consumed is totally untenable. They further stated that if all the three notifications are harmoniously read, the intention of the Govt.
is apparent that all component parts of diesel oil operated 1C Engines would be exempt from payment of duty. They submit that if duty is paid on the components of nozzle and nozzle holders, it would mean that the price of injectors (which consist of nozzle and nozzle holder) would in fact, be higher than the price of nozzles and nozzle holders in the spare market. When nozzles and nozzle holders are sold as spares they are not entitled to any exemption as the said exemption is only available if they are sold as OE to OE manufacture. Hence they claim that if the benefit of the notification is denied to them then the purpose behind the notification would be rendered nugatory, as the injectors to OE manufacturers would have the same price or even a higher price than if the OE manufacturers purchased these parts as spares. They rely on the Trade Circular No. 14/88 dated 26-5-1988, which states that parts which go into the manufacture of component parts that are in turn used in the manufacture of diesel oil operated 1C Engines would be entitled to the benefit of the Notification No.217/85. They also place reliance on the Trade Notice No. 144/CA-84(5) dated 24-6-1988 issued by Calcutta C.E. Collectorate, Trade Notice No.146/88 dated 29-6-1988 issued by Bangalore Collectorate & Trade Notice No. 63/Bombay in/HP) parts of MV (2) 88 dated 11-7-1988.
5. We have heard Shri J.R. Gagrat, learned Advocate for the appellants and Shri S.K. Sharma, learned Junior Departmental Representative for the Revenue. Shri Gagrat learned advocate elaborating on the ground of appeal put forth the following four propositions :- (I) parts of part are also component and that they entitled for the benefit of notification. In this context, the Ld. advocate relied on the following rulings :-Audio Vision Electronics v. Collector of Central Excise -1987 (31) E.L.T. 797 (para 5) (II) Practical and meaningful interpretation should be given to the notification and its predecessor notification can also be looked into, but earlier wording of the notification cannot be read in the subsequent notification. In this context following ratios are relied. The notification should not be interpreted in such a manner as to defeat its intendment & purpose and reduce it to nugatory. In this context, Counsel relied on the following ratios :-Hemraj Gordhandas v. H.H. Dave, Assistant Collector -1978 (2) E.L.T. J 350 (S.C.) Quality Steel Tubes Pvt. Ltd. v. Collector - 1987 (30) E.L.T. 447 (Tribunal) Meteor Satellite Ltd. v. Collector -1987 (29) E.L.T. 437 (Tribunal) (III) The third proposition placed was that the Trade Notice & Circular are binding on the authorities. In this context, the Counsel relied on the following rulings:Union of India and Ors. v. Godfrey Philips India Ltd. and Ors.
-1985 (22) E.L.T. 306 (ii) Nav Gujarat Paper Industries v. Superintendent and Ors. - 1977 (1)E.L.T.(J67) (IV) The fourth proposition placed was that the department was bound to give the benefit of the notification whether expressly asked or delayedly asked for. In this context, he relied on the following ratios :Vickers Sperry of India Ltd. v. Collector of Central Excise -1989 (40) E.L.T. 202Dunlop India Ltd. v. Union of India and Ors.
(V) Lastly, the counsel submitted that the department cannot give different treatment to different manufacturers of. same goods and that would be violative of law and would cause hardship to competitors. In this context, the counsel relied on the ruling of the judgment rendered in the case of Anup Engineering Ltd., Ahmedabad and Ors. v. Union of India and Ors. -1978 (2) E.L.T. (J 533).
6. Ld. JDR strongly pleaded for dismissing the appeals by upholding the impugned orders as there was no infirmity in the same. He pointed out that the CL filed by the appellants did not disclose the entire components manufactured by them. They were buying a few components also from outside and that they were making clearances separately in the market as spare parts. Therefore, in the absence of all these details also, they were not entitled to make any claim of the notification, which restricted to grant benefit only to the component parts, which are suitable for use in the 1C diesel oil operated internal combustion engines. Admittedly, these components were not parts of diesel oil engines. Admittedly, these components were not parts of diesel oil engines and therefore the wordings and scope of the notification cannot be enlarged to bring within its ambit all other components and parts which are not at all specified therein and also extend the benefit to those spare parts which are sold in the market and not cleared to OE manufacturers. He pointed out that Notification No. 217/85 specifically excluded nozzle and nozzle holders and therefore, their component parts would also be excluded; the same logic of exclusion of the "the parts of part being parts" and once parts were excluded, its parts would also be automatically excluded from the ambit and scope of the notification in question. He submitted that if the benefit was extended to specifically excluded items then the ambit of notification is being enlarged, which would be against the intendment of the notification. He submitted that in that event, there would be large evasion of duty by manufacturers clearing the item as spare parts. He submitted that the ratio of the ruling rendered in the case of Mahindra & Mahindra's case is clearly distinguishable as the interpretation was in the context of the wordings in the notification which covered to "parts of power driven pumps" and hence part of parts were also held to be exempted.
While the situation in this case was different and that nozzle and nozzle holders were clearly excluded in the notification and hence by a different interpretation, its component cannot be granted benefit by considering it as component parts of diesel oil operated internal combustion. The Trade Notices and Circulars referred to part of parts being exempted under the notification, while in the present case, the part i.e. nozzle and nozzle holder had been excluded and hence the denial of benefit is totally justified. He submitted that the period in question pertains to the period, when the Notification 217/85 was in operation and the other two notifications were not applicable, as they did not operate retrospectively. Ld. JDR submitted that the supplemental classification list cannot be approved retrospectively and the procedure is only to ask for refund within six months and all fresh C.L. filed will be considered only prospectively.
7. We have carefully considered the submissions of both the sides and have perused the grounds and rulings placed before us. There is absolutely no merit in these appeals. There is a lot of force in the arguments of Ld. JDR and that there is absolutely no infirmity in the findings given in the orders of the lower authorities. The Notification No. 217/85, dated 8-10-1985 as amended by Notification No. 79/86, dated 10-2-1986 read as follows :- "In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts component parts of diesel oil operated internal combustion engines other than engine valves, gaskets, nozzles and nozzle holders, pistons, piston rings, gudgeon pins, circlips and filter elements or inserts or cartridges and falling under Chapter 84 or 85 of the Schedule to Central Excise Tariff Act, 1985 (5 of 1986) and intended for use in the manufacture of diesel oil operated internal combustion engines, from the whole of the duty of excise leviable thereon under Section 3 of the Central Excises and Salt Act, 1944 (1 of 1944): Provided that where such use is elsewhere than in the factory of production of such component parts, the procedure set out in Chapter X of the Central Excise Rules, 1944 is followed.
[Notification No. 217/85-C.E., dated 8-10-1985 as amended by Notification No. 79/86-C.E., dated 10-2-1986]".
A simple reading of the notification makes it clear that nozzle and nozzle holders are clearly excluded from the benefit of the above notification. Nozzle and nozzle holders come into existence only after their component parts and sub-assemblies are manufactured and assembled as per their design and specifications. As can be seen both nozzles and nozzle holders have been excluded from the notification. It follows that all the components which go to form the item known in market as nozzles and nozzle holders are clearly excluded from the benefit of the notification. The notification grants exemption to "other component parts of diesel oil operated internal combustion engines other than those clearly specified therein". Admittedly nozzle and nozzle holders fall within the exclusion clause. Its sub-assemblies which go to form the said item are also clearly excluded. The parts or sub-assemblies of nozzles and nozzle holders cannot be considered independently as parts of diesel oil operated internal combustion, in the face of their clear exclusion. Such an interpretation would be to cause violence to the notification by granting benefit to those parts and its parts which are clearly excluded from the ambit of the notification. The ratio of Mahindra & Mahindra's case is clearly distinguishable. The notification therein granted benefit to "parts of power driven pumps", therefore, part of parts also fell within the ambit of the description of the parts of power driven pump. The citation cannot be misapplied, as sought by Ld. counsel. The Trade Notices referred were also in the context of those parts which fell within the ambit of 'component parts of diesel oil operated internal combustion engine' and the T.N's did not suggest anywhere that parts of excluded items should be brought within the main description and wording of the notification. The Ld.
counsel has attempted to place a-very strange reading of both the notification and the trade notice, which requires to be rejected outright. The other rulings relied before us are also not applicable for consideration. Merely because the department grants or misapplied to a contemporary manufacturer when the notification does not grant the benefit that cannot be a ground for us to extend the benefit when the same is not applicable. The Ld. Counsel made a grievance that by supplemental C.L. dated 20-8-1989 approval from 1-3-1989 can ... also be claimed. This can be true, if the C.L. had been kept pending approval or had been approved provisionally. In cases, where CL had been approved the supplemental CL filed by the assessee could be considered only from its date. However, the assessee would be entitled to claim refund for duty paid for six months by processing an independent refund application [see Chandras' Chemical Industries (Pvt.) Ltd. v. Collector of Central Excise -1992 (57) E.L.T. 110]. The ld. counsel also submitted that the department should suo motu grant benefit of notification even if not asked for by the assessee. This is true if the benefit is available in straight forwarded cases. The department cannot be asked suo motu to interpret the wordings of a notification; when the burden is on the assessee to discharge the same by placing evidence for its claim. Therefore, it is not correct to say that department should have granted the benefit, even if the party has not asked for the same in this case. The rulings referred by the counsel dealt into cases, where there was a blanket exemption from levy of duty. In such cases, charging and claiming duty was considered as not proper. The situation is quite different in the present case. The appellant wants to give a twist to the wording of the notification and seeks exemption to an item which is clearly excluded within the scope and ambit of the notification. In cases of the nature, the question of granting a liberal interpretation or looking into the genelogy of the notifications does not arise at all. As regards the claim of the benefit of Notification No. 216/87-C.E., dated 15-9-1987 and Notification No. 112/88-C.E., dated 1-3-1988, it is seen that these notifications are conditional notifications. The same has not been considered by lower authorities in its right prospective and therefore the matter is remanded to lower authorities to consider the applicability of these two notifications only, in the light of settled blaw and rulings. The original authorities may also consider any fresh evidence that may be placed by the appellants. It is seen that the C.L.
filed before us does not give the variovis details of the components of nozzles and nozzle holders. Therefore, it is necessary that the appellants place full evidence in this regard at the time of consideration of their claim under these two notifications.
8. The Appeals are disposed of in the above terms.
Sd/- 9. I have carefully considered the order proposed by my learned brother. But I regret, with respect, that I am unable to agree to the same.
10. Central Excise duty, it is now well-settled, is a tax on manufacture of the goods specified in the Schedule to the CETA, 1985 (hereinafter referred to as the Tariff Schedule). If any goods are mentioned in the Tariff Schedule, they are liable to duty in their own right irrespective of the fact that those 'goods' are further used or utilised in the manufacture (or assembly) of another goods. This liability to duty of components/parts has to be discharged separately unless there is a specific exemption from duty on such components.
Needless to say that these components/parts should be 'marketable' to become "goods", as again settled by rulings of the Apex Court. If they are not known as 'goods', they are not liable to duty. To give a very routine example 'motor vehicle' is separately liable to duty under Chapter 87 of the Tariff Schedule. To manufacture a motor vehicle, one requires an engine, a chassis, body, battery, tyres to name only a few of the parts. All these parts are also liable to duty separately, apart from the duty on motor-vehicle. Apart from paying duty on motor vehicle, the manufacturer of motor vehicle will be required to pay duty on all these parts if he manufactures these parts himself or he would bring these parts after payment of duty from other manufacturers such as those of batteries and tyres. Such a situation would make the burden of duty on a motor-vehicle very heavy. In order to reduce the burden of duty, as a matter of policy, on motor vehicle, Central Government has used the provisions of Section 5A (previously of Pule 8 of the Central Excise Rules, 1944) of the Central Excises and Salt Act, 1944 to issue notifications exempting from duty such goods which arise in the course of manufacture of a final product in the same or another factory of the same manufacturer or are brought from another manufacturer. Burden of duty on the final products is also reduced through the MODVAT Scheme or through the procedure under Chapter X of the Central Excise Rules, 1944. Notification No. 217/86 is a classic example of one such notification. In sum and substance, duty is chargeable on production of any 'goods' which are chargeable to duty under the Tariff Schedule, unless there is an exemption from duty under a provision of the Central Excises & Salt Act, 1944 or the Central Excise Rules, 1944.
11. An exemption notification exempts what it specifically states and the notification cannot be extended to any other goods, e.g. if an exemption notification exempts a motor vehicle, it cannot be taken to exempt other excisable goods arising in the course of manufacture of a motor vehicle, unless there is some other provision of law exempting such intermediate goods. Having regard to the scheme of Central Excises and Salt Act, 1944 and the rules made thereunder, as explained above, an exemption notification cannot be extended in its scope by a process of intendments, conjectures and surmises, as observed by the Hon'ble Supreme Court in Hemraj Gordhandas (supra).
11.1 Notification 217/85 (as amended by Notification 79/86, dated 10-2-1986) exempts component parts of diesel operated 1C. engines except certain specified parts - one of them being nozzles and nozzle holders. Question involved herein is whether parts of nozzle and nozzle holders are also excluded from the scope of Notification 217/85; Revenue is of the view that parts of "nozzles and nozzle holders" are also excluded from the scope of the notification whereas the assessee (appellant) contends that parts of nozzle and nozzle holders - being parts of diesel operated I.C. engines other than the excluded categories of parts - are covered by the said exemption notification.
It is significant to note that parts of nozzle and nozzle holders are being classified in the same heading of the tariff as the parts of diesel operated I.C. engines. It is also noted here that some of the parts of 'nozzle and nozzle holders' are purchased by the appellant from outside and such parts have discharged duty due thereon. The dispute is about the manufacture of parts of nozzle and nozzle holders within the factory of the appellants.
11.2 Lower appellate authority's findings have already been set out in para 2 of learned Brother's proposed order. Lower authorities' findings are that the clear intention of exemption Notification 217/85 excluding inter alia, nozzle and nozzle holders from the benefit would be defeated if parts of nozzle and nozzle holders are extended the benefit of the notification. Although the authority has not further stated, why the exclusion of the benefit to nozzle and nozzle holders would be defeated, the reasoning appears to be that 'nozzle and nozzle holder' is nothing but an assembly of its parts.
12. Let me examine the reasoning in the light of the scheme of levy and collection of Central Excise duty discussed above. Had the Notification 217/85 (as amended) and any other exemption not been in existence, goods namely (i) parts of nozzle and nozzle holder, (ii) nozzle and nozzle holder and (iii) diesel operated I.C. engine would have been liable to duty separately at each stage, first two goods under the broad category of parts of diesel operated I.C. engines. Central Government has the power to issue an exemption notification to exempt any excisable goods from duty. In Notification 217/85 (as amended), it has chosen to exempt all parts except certain specified parts mentioned in the notification. If the Government had the intention not to exempt parts of specified categories of excluded parts, it should have mentioned so in the notification. We cannot read the expression "or parts of all the aforesaid specified parts" after the word "cartridges' in the said notification.
12.1 There is also a fallacy in the reasoning of the lower authorities.
They have taken collection of various parts of the nozzle and nozzle holder as nozzle and nozzle holder itself. 'Nozzle and nozzle-holder' would come into existence as a result of series of processes of assembling various parts into 'nozzle and nozzle holder'. Land, labour and capital are all involved in manufacture (assembly) of nozzle and nozzle holder from its parts. Simply because parts of nozzle and nozzle holder stand exempted, it would not mean that "nozzle and nozzle holders" would also automatically get exempted thereby defeating the intention of the notification. Value of 'nozzle and nozzle holders' which would still be liable to duty would be reduced only by the element of duty on parts of nozzle and nozzle holders. I am, therefore, unable to appreciate the reasoning of the lower authorities.
13. The impugned order in Appeal E/5530/91-B1, therefore, deserves to be set aside on the question of applicability of Notification 217/85 (as amended) to parts of nozzle and nozzle holders. I order accordingly.
14. In the second appeal, apart from the question of availability of the said notification, demand of duty has been raised. Since the benefit of the Notification 217/85 (as amended) is available to parts of nozzle and nozzle holders, question of demand of duty and consequently valuation of such parts does not arise. The impugned order in the second appeal E/5647/91-B1 is also set aside.
15. In short, both the appeals are allowed with consequential relief to the appellant.
Whether in the facts and circumstances of the case parts of nozzle and nozzle holders are entitled to the benefit of Notification 217/85 (as amended), as held by the Technical Member.
they are not entitled to the benefit of the said notification and matter requires to be remanded for considering the claim of benefit of Notification 216/87-C.E, dated 15-9-1987 and Notification 112/88-C.E., dated 1-3-1988, as held by the Judicial Member.
16. On the point arising for determination on account of the difference of opinion between the Learned Members, I have heard Shri J.R. Gagrat, Learned Advocate on behalf of the appellants and Shri K.K. Jha, Learned SDR on behalf of the Revenue. Both sides have reiterated the submissions made during the hearing of the matter by the Learned Members.
17. I have gone through the proposed orders and the submissions made on behalf of both sides. On a plain reading of Notification No. 217/85, dated 8-10-1985 as amended by Notification No. 79/86, dated 10-2-1986 reproduced in para 7 of the order recorded by Learned Member Judicial, it follows that it exempted from the payment of whole of the duty of excise leviable thereon, all component parts of diesel oil operated internal combustion engines falling under Chapter 84 or 85 of the Schedule to the Central Excise Tariff Act, 1985 when intended for use in the manufacture of diesel oil operated internal combustion engines, as long as such parts were other than engine valves, gaskets, nozzles and nozzle holders, pistons, piston rings, gudgeon pins, circlips and filter elements or inserts or cartridges. The notification also provided that when the use of the parts for the prescribed purpose was elsewhere than in the factory of production, the procedure set out in Chapter X of the Central Excise Rules, 1944 was to be followed. Since the appellants have claimed that the disputed nozzle and nozzle holders were intended for use in the manufacture of diesel oil operated internal combustion engines, in order to determine the eligibility of the said parts for exemption under Notification No. 217/85 (as amended), the only question that needs to be examined is whether parts of nozzle and nozzle holders could be deemed as parts of diesel engines and distinct from nozzles and nozzle holders which were specified as items not eligible for exemption under the said notification.Audio Vision Electronics v.Collector of Customs, Madras, reported in 1987 (31) E.L.T. 796, the Tribunal has held that a component of a component of a machine has to be deemed as a component of the machine. Similarly, in the case of Sahney Steel and Press Works Ltd., Bombay v. Union of India and Ors., reported in 1988 (36) E.L.T. 94, the Hon'ble Bombay High Court has held that starter armature which is a part of automobile starter motor is a part of automobile. It is also seen that in the case of Collector of Central Excise v. MP (I) Ltd., reported in 1990 (46) E.L.T. 68, the Tribunal has held that a part of a cycle tyre is also a part of bicycle. Hence, it is well settled in law that a component of a component of a machine has to be deemed as a component of the machine taken as a whole. Since it cannot be denied that nozzles and nozzle holders are parts of automobile internal combustion diesel engines, on the ratio of the judgments discussed above, it has to be held that parts of nozzles and nozzle holders are also parts of automobile internal combustion diesel engines.
19. As regards the question whether parts of nozzles and nozzle holders have to be treated as nozzle and nozzle holders which stand excluded from the purview of the exemption under Notification 217/85 (as amended), I am inclined to agree with the Learned Member (Technical) that parts of nozzles and nozzle holders cannot be deemed as nozzles and nozzle holders which come into existence only as a result of a series of processes of assembling of various parts.
20. In this regard the judgment of the Hon'ble Supreme Court in the case of Union of India v. Tarachand Gupta & Bros., reported in 1983 (13) E.L.T. 1456 appears to be relevant. In that case the respondent who held an import licence permitting him to import parts and accessories of motor cycles and scooters as per Appendix XXVI of the Import Policy Book for July-December 1956 imported two consignments consisting of 17 cases of motor cycle parts which arrived by two different vessels. The goods were imported against an Import Licence issued under Entry No. 295 of the Schedule to the Import Trade Control Order under which import of only parts and accessories of motor cycles and scooter was permissible. The Customs authorities after examination of the two consignments held that the imported goods constituted 51 sets of complete mopeds in knocked down condition. The Deputy Collector who decided the case ordered the confiscation of the goods on the grounds that the goods being complete mopeds/motorcycles could be imported only against an Import Licence issued under Entry 294 of the Schedule to the Import Trade Control Order, which covered complete motorcycles. The Apex Court while deciding the matter held that since the importer had imported parts and accessories of mopeds his imports were covered by Entry 295 of the Schedule to the Import Trade Control Order and it was not permissible for the Collector to hold that they were not covered by Entry No. 295 on the grounds that when lumped together they would constitute other articles, namely, motor cycles and scooter in C.K.D. condition since adoption of such a process by the Collector would mean insertion in Entry 295 a restriction which was not there. Para 24 of the said judgment being relevant is reproduced below :- "24. The respondents' licence admittedly authorised them to import goods covered by Entry 295. They could, therefore, legitimately import, on the . strength of that licence, all and several kinds of parts and accessories of motor i cycles and scooters. The only question, therefore, before the Collector was whether the respondents' licence covered the goods imported by them, i.e., whether the goods were parts and accessories. If they were, the imports were legitimate and no question of their being not covered by the licence or the respondents having committed breach of Section 3 of the Imports and Exports (Control) Act or Section 167(8) of the Sea Customs Act could possibly arise. What the Collector, however, did was that he put the two consignments together and held that they made up 51 'Rixe' Mopeds in C.K.D. condition and were, for that reason, not the articles covered by Entry 295 but articles prohibited under remarks (ii) of Entry 294. But Entry 294 deals with motor cycles and scooters complete and assembled. Remark (ii) against that entry prohibits an importer who held a licence to import motor cycles and scooters from importing motor cycles and scooters in C.K.D. condition. Remark (ii) containing that prohibition had nothing to do with Entry 295 which did not contain any limitations or restrictions whatsoever against imports of parts and accessories." 21. Having regard to the ratio of the judgment discussed above, it has to be held that in the absence of any stipulation in Notification No.217/85 to the effect that for the purposes of the exemption parts and sub-assemblies of articles specified in the notification including nozzles and nozzle holders would also be treated on par with the complete articles, it would not be permissible to hold that such parts or sub-assemblies would not be eligible for exemption under the notification. I am, therefore, inclined to agree with the Learned Member (Technical) that if the Government had intended not to exempt even parts of the specified items which stand excluded from the purview of the exemption under Notification No. 217/85 (as amended), it would have mentioned so in the Notification.
22. In view of the foregoing, I hold that subject to fulfilment of other conditions of the notification, parts of nozzles and nozzle holders were entitled to the benefit of the exemption under Notification No. 217/85 (as amended).
23. In view of the majority opinion parts of nozzle and nozzle holders are entitled to the benefit of Notification 217/85 (as amended) subject to fulfilment of the conditions provided therein.