Sundaram Clayton Limited Vs. Collector of Customs - Court Judgment

Excerpt:
1. sundaram clayton ltd., madras had filed a revision application to the additional secretary, government of india being aggrieved from order-in-appeal no. c3/2690/79, dated 4-2-1981 passed by the appellate collector of customs, madras. the said revision application stands transferred to the tribunal in terms of the provisions of section 131b of the customs act, 1962.2. briefly the facts of the case are that sundaram clayton ltd., madras had imported connecting rods, a component part of compressors vide bill of entry no. d-975, dated 18th june, 1979. the assistant collector had assessed the same under heading 87.04/06 (1). the appellants had filed a refund claim on the ground that the same are to be assessed under heading 84.11 (1) of the customs tariff act, 1975. the assistant collector had rejected the refund claim. being aggrieved from the aforesaid order the appellant had filed an appeal before the appellate collector of customs. the learned appellate collector of customs had rejected the appeal on the ground that the goods imported are principally used with motor vehicles and as such as per note 3 they have to be classified under chapter 87 in preference to chapter 84 of the customs tariff act and had rejected the appeal. being aggrieved from the aforesaid order the appellant has come in appeal before the tribunal.3. shri d. vedantam, deputy manager (imports) has appeared on behalf of the appellants. he has reiterated the contentions made in the revision application. he has pleaded that the connecting rods imported by the appellants were used in air compressors for the braking system of the motor vehicles. he pleads that the same needs to be assessed under heading 84.11(1). shri vedantam has laid great emphasis on sub note (e) of note 2 of section xvii of the customs tariff act, 1975. he pleads that in terms of the provisions of note 2(e) 'throughout this section "parts" and tarts and accesseries" are to be taken not to apply to the following articles, whether or not they are identifiable as for the goods of this section" and sub-section (e) of note 2 relates to machines and mechanical appliances and other articles falling within heading nos. 84.01/02 to 84.59, 84.61 or 84.62 and parts of engines and motor falling within heading no. 84.63. shri vedantam states that the compressors fall under heading 84.11 (1) and as such the same should also be assessed under heading 84.11 (1). he has also argued that chapters 84 and 87 have to be read together. he has pleaded for the acceptance of the appeal.4. shri j. gopinath, the learned senior departmental representative, who has appeared on behalf of the respondent states that he has got no comments to the arguments of the appellants in respect of section xvii [note 2(e)]. shri gopinath fairly states that the connecting rod imported by the appellant fall under heading 84.11 (1). he has got no objection to the acceptance of the appeal.5. we have heard both the sides and have gone through the facts and circumstances of the case. the connecting rods imported by the appellants are to be used in the compressors meant for the braking system. in view of the arguments of both the sides and after perusing 84.11 (1) we hold that the connecting rods imported by the appellant fall under heading 84.11 (1). accordingly the orders passed by the lower authorities are set aside. the appeal is allowed. the lower authorities are directed to give consequential effect to this order.

Judgment:
1. Sundaram Clayton Ltd., Madras had filed a revision application to the Additional Secretary, Government of India being aggrieved from order-in-appeal No. C3/2690/79, dated 4-2-1981 passed by the Appellate Collector of Customs, Madras. The said revision application stands transferred to the Tribunal in terms of the provisions of Section 131B of the Customs Act, 1962.

2. Briefly the facts of the case are that Sundaram Clayton Ltd., Madras had imported Connecting Rods, a component part of Compressors vide Bill of Entry No. D-975, dated 18th June, 1979. The Assistant Collector had assessed the same under Heading 87.04/06 (1). The appellants had filed a refund claim on the ground that the same are to be assessed under Heading 84.11 (1) of the Customs Tariff Act, 1975. The Assistant Collector had rejected the refund claim. Being aggrieved from the aforesaid order the appellant had filed an appeal before the Appellate Collector of Customs. The learned Appellate Collector of Customs had rejected the appeal on the ground that the goods imported are principally used with Motor vehicles and as such as per note 3 they have to be classified under Chapter 87 in preference to Chapter 84 of the Customs Tariff Act and had rejected the appeal. Being aggrieved from the aforesaid order the appellant has come in appeal before the Tribunal.

3. Shri D. Vedantam, Deputy Manager (Imports) has appeared on behalf of the appellants. He has reiterated the contentions made in the revision application. He has pleaded that the Connecting Rods imported by the appellants were used in Air Compressors for the braking system of the Motor vehicles. He pleads that the same needs to be assessed under Heading 84.11(1). Shri Vedantam has laid great emphasis on Sub note (e) of Note 2 of Section XVII of the Customs Tariff Act, 1975. He pleads that in terms of the provisions of Note 2(e) 'Throughout this Section "Parts" and Tarts and accesseries" are to be taken not to apply to the following articles, whether or not they are identifiable as for the goods of this Section" and Sub-section (e) of Note 2 relates to machines and mechanical appliances and other articles falling within Heading Nos. 84.01/02 to 84.59, 84.61 or 84.62 and parts of engines and motor falling within Heading No. 84.63. Shri Vedantam states that the Compressors fall under Heading 84.11 (1) and as such the same should also be assessed under Heading 84.11 (1). He has also argued that Chapters 84 and 87 have to be read together. He has pleaded for the acceptance of the appeal.

4. Shri J. Gopinath, the learned Senior Departmental Representative, who has appeared on behalf of the respondent states that he has got no comments to the arguments of the appellants in respect of Section XVII [Note 2(e)]. Shri Gopinath fairly states that the Connecting Rod imported by the appellant fall under Heading 84.11 (1). He has got no objection to the acceptance of the appeal.

5. We have heard both the sides and have gone through the facts and circumstances of the case. The Connecting Rods imported by the appellants are to be used in the Compressors meant for the braking system. In view of the arguments of both the sides and after perusing 84.11 (1) we hold that the Connecting Rods imported by the appellant fall under Heading 84.11 (1). Accordingly the orders passed by the lower authorities are set aside. The appeal is allowed. The lower authorities are directed to give consequential effect to this order.