Fag Precision Bearings Ltd. Vs. Collector of Customs - Court Judgment

Excerpt:
1. this appeal is directed against order-in-appeal dated 4-11-1988 of collector of customs (appeals).2. the appellants had imported a consignment of components of rollers for taper roller bearings up to 85 mm. internal diameter. the goods were warehoused and subsequently cleared from the warehouse on payment of customs duty on 11-3-1987. benefit of exemption under notification no. 85/86-cus., dated 17-2-1986 was claimed and allowed. subsequently, however, it was found that it could have been given only under notification no. 146/86, dated 26-2-1986 which had in the meantime replaced the notification no. 85/86, dated 17-2-1986. show cause notice for demanding differential duty was issued to the appellants. the asstt. collector held that the assessment can be made only under sl.no. 6(i)(a) of the table appended to the notification no. 146/86, dated 26-2-1986. collector (appeals) upheld the order. hence this appeal.3. arguing on behalf of the appellants ld. counsel submits that the notification no. 146/86, dated 26-2-1986 came to their knowledge subsequent to the clearance of the goods from the warehouse. he submits that in such a case what is relevant is not the date of notification but the date they were made aware of it. in fact trade notice intimating contents of the notification no. 146/86 was issued one day after the removal of the goods from the warehouse.4. in the alternative he argued that even on merits they ought to have been assessed under sl. no. 6(ii) of the table annexed to the notification 146/86. the main reason in support of his contention is that what they have imported are part of the assembly and therefore they cannot be deemed to be part of the roller bearings to attract placement tinder sl. no. 6(i)(a) of the table annexed to the notification.5. ld. d.r. submits that the position that date of publication is the effective date is now well settled through the judgment of the hon'ble supreme court in case of i.t.c. ltd. v. c.c.e. - 1996 (86) e.l.t. 473 (s.c.). even on merits the assistant collector has discussed in his order the reasons why their pleas cannot be accepted.6. we have heard both sides. that the date of publication of the notification has to be taken as relevant date for determining the rate of duty is no longer res integra and has been settled through judgment of the hon'ble apex court in case of i.t.c. (supra).7. coming now to the merits of the case the ld. counsel submits that roller bearings consists of outer ring, the inner ring and the retainer assembly. these three items alone are covered by words "parts including sub-assemblies of bearings." the rollers which are imported by appellants are only a part of retainer assembly which itself is a sub-assembly. sl. no. 6(i)(a) of the notification does not make any reference to the parts of sub-assemblies for the purpose of levy of tax and therefore parts of sub-assembly would obviously be covered by sl.no. 6(ii) and impugned goods are not liable to any differential duty.8. sl. no. 6 of notification refers to "parts of goods specified in sl.no. 5" of the notification no. 146/86, dated 26-2-1986. s. no. 6(i)(a), (b), (c) and (d) refers to parts including sub-assemblies whereas sl.no. 6(ii) refers to "others". it was contended the roller bearings consists of outer ring, inner ring and retainer assembly and impugned goods are only part of retainer assembly which itself is a sub-assembly.9. we cannot accept the contention that since sl. no. 6(i)(a) does not refer to parts of sub-assembly the impugned goods are not covered by this sl. no. even assuming impugned goods are part of sub-assembly they do not cease to be parts of roller bearings. we therefore hold that impugned goods are covered by sl. no. 6(i)(a) of the notification itself and cannot be pushed to a residuary heading of "others" under sl. no. 6(ii) of the notification. in the result the impugned order is upheld and appeal is rejected.

Judgment:
1. This appeal is directed against Order-in-Appeal dated 4-11-1988 of Collector of Customs (Appeals).

2. The appellants had imported a consignment of components of Rollers for Taper Roller bearings up to 85 mm. internal diameter. The goods were warehoused and subsequently cleared from the Warehouse on payment of Customs duty on 11-3-1987. Benefit of exemption under Notification No. 85/86-Cus., dated 17-2-1986 was claimed and allowed. Subsequently, however, it was found that it could have been given only under Notification No. 146/86, dated 26-2-1986 which had in the meantime replaced the Notification No. 85/86, dated 17-2-1986. Show cause notice for demanding differential duty was issued to the appellants. The Asstt. Collector held that the assessment can be made only under Sl.

No. 6(i)(a) of the Table appended to the Notification No. 146/86, dated 26-2-1986. Collector (Appeals) upheld the order. Hence this Appeal.

3. Arguing on behalf of the Appellants ld. Counsel submits that the Notification No. 146/86, dated 26-2-1986 came to their knowledge subsequent to the clearance of the goods from the warehouse. He submits that in such a case what is relevant is not the date of notification but the date they were made aware of it. In fact Trade Notice intimating contents of the Notification No. 146/86 was issued one day after the removal of the goods from the warehouse.

4. In the alternative he argued that even on merits they ought to have been assessed under Sl. No. 6(ii) of the table annexed to the Notification 146/86. The main reason in support of his contention is that what they have imported are part of the assembly and therefore they cannot be deemed to be part of the roller bearings to attract placement tinder Sl. No. 6(i)(a) of the table annexed to the notification.

5. Ld. D.R. submits that the position that date of publication is the effective date is now well settled through the judgment of the Hon'ble Supreme Court in case of I.T.C. Ltd. v. C.C.E. - 1996 (86) E.L.T. 473 (S.C.). Even on merits the Assistant Collector has discussed in his order the reasons why their pleas cannot be accepted.

6. We have heard both sides. That the date of publication of the Notification has to be taken as relevant date for determining the rate of duty is no longer res integra and has been settled through judgment of the Hon'ble Apex Court in case of I.T.C. (supra).

7. Coming now to the merits of the case the ld. Counsel submits that Roller Bearings consists of outer ring, the inner ring and the retainer assembly. These three items alone are covered by words "parts including sub-assemblies of bearings." The rollers which are imported by appellants are only a part of retainer assembly which itself is a sub-assembly. Sl. No. 6(i)(a) of the Notification does not make any reference to the parts of sub-assemblies for the purpose of levy of tax and therefore parts of sub-assembly would obviously be covered by Sl.

No. 6(ii) and impugned goods are not liable to any differential duty.

8. Sl. No. 6 of Notification refers to "Parts of goods specified in Sl.

No. 5" of the Notification No. 146/86, dated 26-2-1986. S. No. 6(i)(a), (b), (c) and (d) refers to parts including sub-assemblies whereas Sl.

No. 6(ii) refers to "others". It was contended the roller bearings consists of outer ring, inner ring and retainer assembly and impugned goods are only part of retainer assembly which itself is a sub-assembly.

9. We cannot accept the contention that since Sl. No. 6(i)(a) does not refer to parts of sub-assembly the impugned goods are not covered by this Sl. No. Even assuming impugned goods are part of sub-assembly they do not cease to be parts of roller bearings. We therefore hold that impugned goods are covered by Sl. No. 6(i)(a) of the Notification itself and cannot be pushed to a residuary heading of "others" under Sl. No. 6(ii) of the notification. In the result the impugned order is upheld and appeal is rejected.