ORDER
Jyoti Balasundaram, Member (J)
1. The eligibility of Piston Ring Kits for Ford Agricultural Tractors to the benefit of Notification No. 172/89-Cus., dt. 25-9-1989 at S. No. 7 thereto, arises for determination in this appeal.
2. The appellants herein imported two consignments of Piston Ring Kits for Ford Agricultural Tractors. Prior to 1986, these items were classifiable under Heading 84.06 of the Customs Tariff and were exempted under Notification No. 281 /76 and the effective rate of duty for internal combustion engines for industrial and agricultural tractors and tillers was 40%. In 1986, Heading Nos. 8407, 8408 and 8409 were introduced in the Tariff and Notification No. 281/76 was amended accordingly to provide for these headings. The above mentioned notifications were superseded by Notification Nos. 69/87 and 172/89. The benefit of Notification 172/89 was not extended to the goods imported as they were admittedly parts of engines for agricultural tractors which are motor vehicles under Chapter 87 of the Customs Tariff Act, 1975. The lower appellate authority upheld the order of the adjudicating authority on the same ground and hence this appeal before us.
3. We have heard Shri S.P. Jain, Partner of the appellant firm and Shri M.S. Arora, the learned DR and carefully considered their submissions.
4. Notification No. 172/89 reads as follows :
“GSR No. (E). – In exercise of the powers conferred by Sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962) the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in Column 2 of the table hereto annexed, when imported into India, from so much of that portion of the duty of customs leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) as is in excess of the amount calculated at the rate of 35 per cent ad valorem :
————————————————————-
S. No. Description of goods
1 to 6 xxxxxxxxxxxx
7. Goods falling under heading No. 84.09 excluding parts of en-
gines which are interchangeable for use with motor vehicles."
-----------------------------------------------------------------------
5. Shri Jain submits that agricultural tractors because of their distinct features like having no chassis and bodies, are not covered by the expressions ‘Motor Vehicles’ and they are vehicles and therefore, parts of internal combustion piston engines for agricultural tractors are eligible for the benefit of the Notification as they fall under Heading 84.09. He submits that the tariff itself recognises a distinction between vehicles and motor vehicles and draws our attention to Note 2 to Chapter 87 which states that “for the purpose of this chapter ‘tractors’ means vehicles constructed essentially for hauling or pushing another vehicles, appliances or load, whether or not they contain subsidiary provision for the transport, in connection with the main use of the tractor, of tools, seeds, fertilizers or other goods”. He refers to the heading of Chapter 87 which covers ‘Vehicles’ other than railway or tramway rolling stock and parts and accessories thereof to support his argument that Chapter 87 covers ‘Vehicles’ other than motor vehicles. He also contends that Heading 8701 itself covers two different types of tractors which are distinguished by their construction, design and function namely road tractors for semi-trailers (8701.20) which are motor vehicles as they are designed for transport on roads and have chassis and bodies and agricultural tractors (8701.90 – others) which are other than those designed for transport on roads as they do not have chassis or bodies and are used for farming off the roads and these are vehicles but not motor vehicles. He also refers to Notification Nos. 155/86 dt. 1-3-1986 and 68/86 to submit that the Govt. had recognised a distinction and distinguished between road tractors i.e. motor vehicles and agricultural tractors i.e. vehicles. He also refers to Notification No. 59/87 which grants concessional rate of duty to internal combustion piston engines for industrial and agricultural tractors and power tillers excluding those which are inter-changeable for use with other motor vehicles and falling under Heading 84.07 or 84.08 to strengthen his contention that agricultural tractors are recognised as distinct and separate entities from motor vehicles. He also refers to an earlier order of the Collector of Customs dt. 1-7-1988 (page 78 of the appeal paper book) wherein the Collector has satisfied himself that the parts listed in Annexure ‘A’ to his order are parts of IC engines used in agricultural tractors and not inter-changeable with other motor vehicles and submits that as S. No. 14 of Annexure ‘A’ mentions DJPN 6149 S, and as the goods imported in this case, are the identical goods namely the identical piston ring kits, it should be held that these imported items are also not inter-changeable for use with other motor vehicles. Finally, he cites the order of the Bombay High Court in the case of Mahindra and Mahindra Ltd. v. Union of India and Ors. 1984 (18) E.L.T. 262 and the orders of the Tribunal in the case of Kirloskar Cummins. Ltd. v. Collector of Customs, Bombay 1985 (22) E.L.T. 74 and Order No. C-68-69/92-B2, dt. 25-5-1992 in the case of Suhag Traders Pvt. Ltd. v. Collector of Customs, Madras to support the proposition already made by him.
6. In reply Shri M.S. Arora, the learned JDR submits that it is not inter-changeability of the parts for use with other motor vehicles which is the relevant criterion to determine eligibility to the benefit of Notification No. 172/89 but whether tractors are motor vehicles under Chapter 87 of the Customs Tariff Act, 1975 which, according to him, covers motor vehicles. He contends that reference to earlier notification is not relevant because the notification with which we are concerned in the present dispute is Notification No. 172/89 which extends benefit to goods falling under Heading 8409 excluding parts of engines which are inter-changeable for use with motor vehicles and as admittedly the imported items are spare parts of agricultural tractors and as per Note 2 to Chapter 87, all tractors are classifiable under Chapter 87 which covers all types of motor vehicles, therefore, the benefit of Notification against S. No. 7 thereof is not available to the goods. In respect of the argument regarding identity of the imported parts with reference to the order of the Collector of Customs dt. 1-7-1988, Shri Arora pleads that the goods cannot be presumed to be identical as the order does not state what were the catalogues before the Collector at the time when he passed the order holding that certain parts were not inter-changeable for use with motor vehicles and further in any event inter-changeability for use with other motor vehicles is not the relevant factor to determine whether the imported goods are eligible to the Notification No. 172/89. Lastly he submits that the case law cited by Shri Jain is not applicable in the context of the present tariff and the notification is question as the decision of the Bombay High Court and the Kirloskar Cummins, decision relating to the earlier tariff and to a different notification namely 281/76. He therefore, pleads for rejection of the appeal.
7. Parts of engines which are inter-changeable for use with motor vehicles are excluded from the purview of S. No. 7 of Notification No. 172/89 and admittedly the imported goods are spare parts of agricultural tractors. As per Note 2 to Chapter 87 of the Customs Tariff Act, 1975, a tractor is a vehicle and all tractors are classifiable under Chapter 87. Chapter 87 covers all types of motor vehicles. The scheme of the chapter itself makes this clear. Heading 87.01 covers tractors (other than tractors of Heading 87.09), Heading 87.02 covers public transport type passenger motor vehicles like buses etc., 87.03 covers motor cars and other motor vehicles principally designed for the transport of persons (other than those of Heading 87.02) (private transport motor vehicles); Heading 87.04 covers motor vehicles for transport of goods for example dumpers; 87.05 covers special purpose motor vehicles such as break-down lorries, fire fighting vehicles, concrete-mixer lorries, etc., Headings 87.06 and 87.07 covers chassis fitted with engines and bodies for motor vehicles of Headings 87.01 to 87.05, 87.08 covers parts and accessories of motor vehicles of Headings 87.01 to 87.05,87.09 covers works trucks of the type used in factories, warehouses, dock areas or airports etc. and parts thereof. 87.10 covers Defence vehicles such as tanks and other armoured fighting vehicles; 87.11 covers motor cycles and side cars; 87.12 covers bicycles and other cycles, 87.13 covers invalid carriages, 87.14 covers parts and accessories of vehicles of Headings 87.11 to 87.13. 87.15 covers baby carriages and parts thereof and Heading 87.16 covers trailers and semi-trailers. Thus, it is seen that the entire Chapter 87 covers all kinds of motor vehicles. We therefore, cannot accept the argument of Shri Jain that Chapter 87 covers vehicles (other than motor vehicles) and motor vehicles. Once we hold that Chapter 87 covers motor vehicles, the obvious conclusion is that, the items imported being parts of engines of agricultural tractors of Heading 8701.90 (as contended by the appellants) are not eligible to the benefit of Notification No. 172/89, in terms of S.No. 7 thereto, as the imported items fall under 87.08 as parts of motor vehicles of Heading 87.01 (8701.90). The case law cites by Shri Jain does not advance his case. The decision of the Bombay High Court in the case of Mahindra & Mahindra was delivered in the context of Item 34A of the Central Excise Tariff which distinguished between tractors (including agricultural tractors) and motor vehicles. The Kirloskar Cummins decision was delivered prior to the introduction of Chapter 87 in the Customs Tariff Act, 1975 and therefore, cannot be relied upon to determine the eligibility to the benefit of Notification No. 172/89. The Suhag Traders case also is not helpful or relevant as in that case the issue before the Tribunal was the eligibility to the benefit of Notification No. 281/76 of P.R. Sets and inter-changeability was the criterion in that notification while it is not so in the present notification with which we are concerned.
In the light of the above decisions, we uphold the order of the Collector of Customs (Appeals) and dismiss this appeal.
ORDER
P.C. Jain, Member (T)
8. I agree with the conclusion reached by my learned sister in the order proposed by her. I would, however, like to add a few words :
8.1 Learned representative of the appellant firm has strongly stressed upon the fact that there has always been a distinction between agricultural tractors and ‘motor vehicles’, under the various Customs Tariffs in the past and this distinction according to him, continues even in the present Customs Tariff. Notification 172/89, benefit of which the appellant firm seeks in respect of the imported goods, stipulates that the benefit would be available if the goods fall under Heading 84.09 provided they are not parts of engines inter-changeable for use with motor vehicles. In short, his submission is that since the parts imported are meant solely for agricultural tractor engines (internal combustion engines), therefore, they are not parts of motor vehicles. Hence, they are entitled to the benefit of the said Notification 172/89.
9.1 Whatever be the distinction in the earlier Tariffs between an agricultural tractor and a ‘motor vehicle’, we are required to look into the present Tariff only under which the Notification 172/89 has been issued. As rightly pointed out by the learned Sister, Chapter 87 covers all types of vehicles except railways or tramways rolling stock. Various Headings from 87.01 to 87.05, 87.09, 87.10 and 87.11 leave no manner of doubt that all types of motor vehicles are covered in this Chapter. Agricultural tractors are covered under Tariff Heading 87.01. Apart from the motor vehicles this Chapter also covers other vehicles; such as Tariff Headings 87.12 (bicycles and other cycles not motorised), 87.13 (invalid carriages whether or not motorised), 87.15 (baby carriages) and 87.16 (trailers, semi-trailers and other vehicles not mechanically propelled). In other words, Chapter 87 covers all vehicles (including all motor vehicles other than railway and tramway rolling stock). The present Tariff, therefore, does not make any distinction between motor vehicle and an agricultural tractor as it might have made in earlier Tariffs. Another submission of the learned representative in support of his proposition of recognised distinction between motor vehicles and agricultural tractor, is the wording of the Notification 59/87-Cus., dated 1-3-1987 – S. No. 6 to the Table thereof. I give the relevant extracts of S. No. 6 of the said Table :-
TABLE
——————————————————————————-
Sl. Heading No. Description of Goods
NO. of the First
Sche-dule to
the Customs
Tariff Act
-------------------------------------------------------------------------------
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
6. 84.07 (a) Stationary or industrial internal combustion piston
84.08 engines excluding those which are inter-changeable for
use with motor vehicles other than those specified in
below;
(b) Internal combustion piston engines for industrial
and agricultural tractors and power tiller excluding
those which are inter-changeable for use with other
motor vehicles;
. . .
. . .
-------------------------------------------------------------------------------
According to his submissions, internal combustion engines for agricultural tractors are separately classified under clause (b) of Col. 3 from motor vehicles in clause (a). On this distinction, he submits that there is a difference between internal combustion engine of agricultural tractor and that of other motor vehicles. I do not find any force in this submission of the learned representative. On closer reading of the two entries under clauses (a) and (b) it is to be seen that clause (b) uses the expression ‘other motor vehicles’. The word ‘other’ is very significant. This means this classification itself recognises that agricultural tractor and power tillers are also motor vehicles but they have been separately classified under S. No. 6 than other motor vehicles for the purpose of levying duty on internal combustion engines. No meaning in support of the general proposition put forward by the learned representative of the appellant firm can be drawn from this notification. Hence, there is no merit in the appeal and it is dismissed as proposed by the learned sister.