Tata Engg. and Locomotives Co. Vs. Collector of Cus. - Court Judgment

Excerpt:
1. this appeal is directed against order-in-appeal no. 491/89-bch, dated 6-3-1989 passed by the collector of customs (appeals).2. the appellants imported a consignment of adaptors, facing heads, tie rods and micro heads. they claimed assessment of these goods under tariff heading 8466.93 read with government of india's notification no.69/87-cus. customs authorities, however, assessed these goods as tools under tariff heading 8207.90. collector of customs (appeals) upheld the order of lower authority. hence, this appeal.3. arguing for the appellants the ld. advocate submits that what they imported are in fact only tool holders and not tools by themselves. he draws our attention to catalogue placed in the file which indicates that these are without the cutters which actually perform the function of a tool. without such functional component it is merely a tool holder.4. the ld. dr submits that catalogue does not specifically indicate that these are only tool holders and, in fact, it categorises these goods under the broad description of a tooling system and even when it refers to these goods as being without cutters it retains the description of tools for such goods.5. we have heard both sides. in the appeal memo, the appellant's contend that these tool holders were specially designed for fitment on the cnc sip jig boring machines. perusal of the catalogue also indicates that at certain places these goods have been described as tool holders. page 4 of that catalogue, for instance, while describing the code no. 046025 as a set of boring tools indicates (without cutters). same position is indicated at page 6 and 7 of the catalogue.perusal of the order-in-original itself indicates that the imported goods function more as holders of tools than as tools themselves. for instance, referring to adaptors, assistant collector has recorded that this is basically a reducer which uses in between spindle and the cutter head to increase the adaptability of spindle with various types of cutter heads. while one end fits into the spindle on the other end cutter head is mounted. in regard to facing heads, the assistant collector has recorded that this is a specially designed spare part which has got sliding arrangement for fitment of boring bar holders on which the cutters are mounted, for boring as well as facing operations.micro head is indicated as a specially designed tool holder for sip jig boring machine. assistant collector, however, has rejected the claim on the ground that these are parts of accessories of cutting tool and not of machine tools.6. considering fact that catalogue itself describes these goods as without essential components like cutters which would perform the tooling function, the goods have necessarily to be held to be only as tool holders and not tools by themselves. the items imported do not by themselves perform any cutting operation without mounting specific cutting tools, and therefore, these can only be called specially designed tool holders for use on spi - cnc jig boring machine. in this connection, our attention was drawn to order no. 643/86-b2 passed by tribunal which held that cutter heads were correctly classifiable under old tariff heading 84.45/48 as against item 82.05 of cta, 1975. chapter note 1 of chapter 82 of hsn notes indicates that chapter covers only articles with a blade, working edge, working surface or other working part of base metal, metal carbides or circuits, pressures or semi-pressure stones, appraisal materials. chapter note 2 indicates that parts of base metal of the articles of this chapter are to be classified with articles of which they are parts, except parts separately specified as such and tool holders for hand-tools (heading no. 84.66). parts of general use as defined under note 2 to chapter xvi are in all cases excluded from the chapter. in the light of this, for the sake of clarity to appreciate the issue involved we are extracting below the two competing entries :- 82.07 : interchangeable tools for hand-tools, whether or not power-operated, or for machine-tools (for example, fore 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 tools. 84.66 : parts and accessories suitable for use solely or principally with the machines of heading nos. 84.56 to 84.65, including work or tool holders, self-opening die-heads, dividing heads and other special attachments for machine-tools; tool holders for any type of tool for working in the hand.7. it is obvious from the plain reading of the two competing tariff entries that the impugned goods are parts and accessories suitable for use solely or principally with the jig boring machines. in fact, it was contented before us that these are specially designed for use on such type of machines. jig boring machine is classifiable under heading 84.59 and there, in fact, is no serious challenge from ld. dr to this classification.8. in this view of the matter, therefore, these tool holders which are specifically designed for use with jig boring machine would correctly fall under 8466.93 as parts and accessories suitable for use solely or principally with machines of heading 84.59.9. in the result, for the reasons mentioned hereinbefore, we set aside the impugned order and allow the appeal.

Judgment:
1. This appeal is directed against Order-in-Appeal No. 491/89-BCH, dated 6-3-1989 passed by the Collector of Customs (Appeals).

2. The appellants imported a consignment of Adaptors, Facing Heads, Tie Rods and Micro Heads. They claimed assessment of these goods under Tariff Heading 8466.93 read with Government of India's Notification No.69/87-Cus. Customs Authorities, however, assessed these goods as tools under Tariff Heading 8207.90. Collector of Customs (Appeals) upheld the order of lower authority. Hence, this appeal.

3. Arguing for the appellants the ld. Advocate submits that what they imported are in fact only tool holders and not tools by themselves. He draws our attention to catalogue placed in the file which indicates that these are without the cutters which actually perform the function of a tool. Without such functional component it is merely a tool holder.

4. The ld. DR submits that catalogue does not specifically indicate that these are only tool holders and, in fact, it categorises these goods under the broad description of a tooling system and even when it refers to these goods as being without cutters it retains the description of tools for such goods.

5. We have heard both sides. In the appeal memo, the appellant's contend that these tool holders were specially designed for fitment on the CNC SIP Jig boring machines. Perusal of the catalogue also indicates that at certain places these goods have been described as tool holders. Page 4 of that catalogue, for instance, while describing the Code No. 046025 as a set of boring tools indicates (without cutters). Same position is indicated at Page 6 and 7 of the catalogue.

Perusal of the Order-in-Original itself indicates that the imported goods function more as holders of tools than as tools themselves. For instance, referring to adaptors, Assistant Collector has recorded that this is basically a reducer which uses in between spindle and the cutter head to increase the adaptability of spindle with various types of cutter heads. While one end fits into the spindle on the other end cutter head is mounted. In regard to facing heads, the Assistant Collector has recorded that this is a specially designed spare part which has got sliding arrangement for fitment of boring bar holders on which the cutters are mounted, for boring as well as facing operations.

Micro head is indicated as a specially designed tool holder for SIP Jig boring machine. Assistant Collector, however, has rejected the claim on the ground that these are parts of accessories of cutting tool and not of machine tools.

6. Considering fact that catalogue itself describes these goods as without essential components like cutters which would perform the tooling function, the goods have necessarily to be held to be only as tool holders and not tools by themselves. The items imported do not by themselves perform any cutting operation without mounting specific cutting tools, and therefore, these can only be called specially designed tool holders for use on SPI - CNC Jig boring machine. In this connection, our attention was drawn to Order No. 643/86-B2 passed by Tribunal which held that cutter heads were correctly classifiable under old Tariff Heading 84.45/48 as against Item 82.05 of CTA, 1975. Chapter Note 1 of Chapter 82 of HSN Notes indicates that Chapter covers only articles with a blade, working edge, working surface or other working part of base metal, metal carbides or circuits, pressures or semi-pressure stones, appraisal materials. Chapter Note 2 indicates that parts of base metal of the articles of this Chapter are to be classified with articles of which they are parts, except parts separately specified as such and tool holders for hand-tools (Heading No. 84.66). Parts of general use as defined under Note 2 to Chapter XVI are in all cases excluded from the Chapter. In the light of this, for the sake of clarity to appreciate the issue involved we are extracting below the two competing entries :- 82.07 : Interchangeable tools for hand-tools, whether or not power-operated, or for machine-tools (for example, fore 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 tools.

84.66 : Parts and accessories suitable for use solely or principally with the machines of Heading Nos. 84.56 to 84.65, including work or tool holders, self-opening die-heads, dividing heads and other special attachments for machine-tools; tool holders for any type of tool for working in the hand.

7. It is obvious from the plain reading of the two competing tariff entries that the impugned goods are parts and accessories suitable for use solely or principally with the jig boring machines. In fact, it was contented before us that these are specially designed for use on such type of machines. Jig boring machine is classifiable under Heading 84.59 and there, in fact, is no serious challenge from ld. DR to this classification.

8. In this view of the matter, therefore, these tool holders which are specifically designed for use with jig boring machine would correctly fall under 8466.93 as parts and accessories suitable for use solely or principally with machines of Heading 84.59.

9. In the result, for the reasons mentioned hereinbefore, we set aside the impugned order and allow the appeal.