V. Rajamanickam, Member (T)
1. The appellants Deki Electronics Ltd. have imported a complete set for their unit for the manufacture of plastic film capacitors. They have claimed refund of duty charged on machinery and equipments for the manufacture of electronic components and have claimed exemption under Notification 118/80 and 34/81. The claim for refund of duty in respect of certain machines and spares, which were imported alongwith the machines was rejected by the Assistant Collector and also by the Collector (Appeals). Against the order of the Collector (Appeals), the appellants have come in appeal to this Tribunal.
2. In their grounds of appeal, they have stated that the order of the Collector (Appeals) is wrong with reference to his order relating to the Accessories (Conditions) Rules, 1967 and that he has not considered their request for extending the provisions of the Notification 118/80 dated 19-6-1980 to the spares and also in respect of the Withstanding Voltmeter as testing machine.
3. Shri N. Singh, the learned consultant argued that the supplier had, by mistake, indicated the values of the spares separately in the invoice which should not be taken as being separate items and also the Notification 118/80 dated 19-6-1980, which is applicable to the main machines specified therein, should be extended to the parts. He also cited the decision of the Tribunal in 1989 (42) ELT 156 – Bharat Earth Movers Ltd. v. Collector of Customs whereby it was held by the Tribunal that parts imported need not be specifically mentioned in the notification and had extended the benefit of the concession. He also referred to the decision of the High Court of Bombay in Sealol Hindustan Ltd. v. Union of India – 1988 (36) ELT 283 (Bom.). He further maintained that these parts were exclusively designed for the machines and in view of the above submissions, he requested that the concessional rate under Notification 118/80 should be extended to the spares and parts.
4. Shri M.K. Sohal, the learned JDR, however, maintained that the order of the Collector (Appeals) was correct in law and the invoice specifically mentions the values separately and parts are not to be extended the same rate of duty applicable to the main machines.
5. The appellants have imported certain machines as may be seen from the invoice which reads as the main machine with standard accessories. The invoice pertains to a number of items and wherever the main machine to which the concessional rate is applicable, it is found that the benefit of the concessional rate has been extended and in respect of those machines which the appellants have claimed as being covered by the notification, no evidence as such, had been provided for explaining the function of the machine in order to consider the applicability of the notification. The citation of the case law in 1989 (42) ELT 156-A (Tribunal), the decision therein is not in the same context, but with regard to a certificate issued by the DGTD, as per requirement of the notification, which is applicable to parts and in respect of the citation in 1988 (36) ELT 283, it is also out of context and as such, cannot be taken as decisions to be made applicable to this case. On a plain reading of the notification, it states that exemption to certain specified goods for electronic industry falling under Chapter 85, 90 or 92, as per the Table. There is no mention about these parts or spares and it has been correctly held by the Assistant Collector that these spares have been assessed on merits as these are specifically mentioned under various Customs Tariff Headings/sub-headings under various chapters of the Customs Tariff Schedule and as already noted earlier, the invoice pertains to a number of items which can separately be classified under different headings of the Tariff and rightly, therefore, unless the notification extends the concessional rate to each one of these items, it cannot be taken that a spare or a part of a machine which is eligible for the concessional rate and which should also be assessed at the same concessional rate of duty. It would be interesting to note that there is a decision of the Bombay High Court in 1989 (44) ELT 420 (Bom.) – Vishal Electronics Pvt. Ltd v. Union of India, wherein it has been held as under :
“Exemption – Interpretation of – Exemption to TV Camera does not mean exemption photographic lenses – Customs Tariff – Notification No. 172/77-Cus. dated 8-8-1977 – Exemption to goods under Heading No. 85.15.1 – Exemption notification not construable to apply to goods not specified therein – Hence, benefit of notification to Television Cameras under Heading No. 85.15.1 not extendable to lenses covered under Heading No. 90.02 on presumption of Central Government intendment to extend benefit of instruments to components – Section 25 (1) of the Customs Act, 1962.”
Applying the above ratio, what is applicable to a main machine cannot be extended to a part. As such, therefore, the appeal having no merits is rejected.