Judgment:
1. The appellants imported bearings and bushings which were assessed to duty under Heading 84.62(2). Thereafter, the appellants filed a refund claim in respect of two bushes claiming that they were tractor parts and merited classification under Heading 87.04/06. This claim was rejected by the Assistant Collector. The Collector (Appeals) upheld the lower authority's order resulting in the present appeal. In the appeal Memorandum, the claim is made that the impugned goods were exclusively used for tractors and would, therefore, merit assessment as parts of tractors. It was claimed that the plea of the lower authority that the subject goods would be covered under Heading 84.62 or 84.63 was wrong, since the impugned goods were bushes and were required to be distinguished from bearings.
2. Shri K. Kumar, learned Advocate appearing for the appellants, relied upon the judgment of the Supreme Court in the case of Jain Engineering Co. v. Collector of Customs, Bombay -1987 (32) E.L.T. 3 (SC) in which it was held that bushes and bearings were not the same and identical but distinct and separate though their functions might be the same. He referred to the catalogue showing the details of the impugned goods and claimed that the catalogue described the goods as tractor bushes.
3. Shri Mohd Ali, learned DR representing the Revenue, claimed that the catalogue cited was that of a manufacturer whereas the invoice shows that the goods were purchased from traders. He further claimed that bushes are not mentioned in any Tariff item and therefore, would fall under Heading 84.62 by virtue of having the same functions as bearings.
He referred to the Tribunal's order which was dealt with in the order of the Supreme Court cited by the appellants and stated that the Supreme Court was interpreting the Notification No. 281/76-Cus. and therefore, the findings of the Tribunal on classification would still prevail.
4. We have carefully considered the submissions made by both the sides and have perused the cited judgments. In their order, the Tribunal had held that bushes and bearings had the same function and therefore, even when bushes had specifically not been mentioned in Tariff Heading 84.63, their classification was warranted thereunder. The Tribunal had relied upon the definition given in the McGraw Hill Encyclopedia of Science and Technology. The Supreme Court on examination of this has observed as under : "It has been held by the Appellate Tribunal and it is also the contention of the learned Additional Solicitor General that bushings and bearings are identical articles. It seems that the appellate Tribunal was influenced by the fact that the functions of the bushings and bearings are the same. It may be that two articles have the same functions but nonetheless, they are distinct and separate.
As the functions of bushings are the same that of the bearings, sometimes bushings are also called bearings, as pointed out by the Appellate Tribunal. But when these two articles are known in the market by two different names, it is difficult to uphold the contention that they are same and identical, even though they perform the same functions. We, therefore, do not agree with the finding of the Appellate Tribunal and the Customs authorities that bushings and bearings are same and identical." 5. The learned DR had submitted that the order of the Tribunal as for the classification of bushes are concerned, would hold valid in spite of the Supreme Court order. This claim is not correct. He had submitted that since bushes are not referred to in the Tariff by their nomenclature, they had to fall under the same heading as bearings.
6. In view of the findings of the Supreme Court referred to above, these goods would have to be included in the heading as 'parts' of those articles in which they would be used. In the cited case, the issue was whether the bushes were parts of internal combustion piston engines or not. The finding of the Supreme Court was in the affirmative. It was held that bushes were parts of combustion piston engines and therefore, exemption under Notification No. 281/76-Cus. was available on the same lines. Following the ratio of this judgment, the plea of the appellants that these should be treated as parts of tractors meriting classification under Heading 87.04/06 will have to be accepted. The identity of the parts is not in doubt. Even if the catalogue/invoice is from traders, the VP Number given in the manufacturers catalogue is specifically listed therein. There is a definite link in the manufacturers catalogue and goods sold by the traders. In the result, the appeal succeeds. The order of the lower Appellate authority is set aside and consequential relief granted.