ORDER
S. Duggal, Member (J)
1. The short point arising for consideration in this appeal, which was originally a Revision Petition before the Central Government, is as to whether the crankshafts, imported by the appellants herein by BE Cash No. 3602 dated 19-1-1977, were entitled to exemption from customs duty in terms of Notification No. 395/76 dated 2-8-1976.
The 12 cases of crankshafts, stated to be essential parts of Internal Combustion Piston Engines, and imported for final application in the same, were assessed to duty under Tariff Item No. 84.63 of Customs Tariff Act, 1975 (CTA for short). The importers applied for refund subsequently, claiming that the imported goods were to go, for purposes of classification, to Tariff Item No. 84.06 of the CTA, and duty assessed accordingly. They also claimed benefit of Notification No. 395/76.
2. This claim was rejected by Assistant Collector by order dated 6-5-1977 on the view that, apart from the fact that the party had not clarified the final application of Internal Combustion Engines; otherwise also, the subject goods were assessed under Item No. 84.63 of the CTA and, as such, Notification No. 395/76 was not applicable which, in his view, could be attracted only for goods/parts falling under Tariff Item No. 84.06 of the CTA.
3. In the appeal before the Appellate Collector of Customs, Bombay, assessability of the goods under Tariff Item No. 84.63 of the CTA was not disputed but claim to benefit of Notification No. 395/76 was pressed. It was urged that the goods qualified for benefit of this notification, as they were used for Internal Combustion Piston Engines. The plea was rejected by the Appellate Collector by order dated 1-6-1978 reiterating that, in order to get benefit of Notification No. 395/76, the parts should also fall under Tariff Heading 84 06 of the First Schedule to the CTA and then proved to the satisfaction of the Assistant Collector that they were required for assembly or manufacture of stationary or industrial internal combustion piston engines or other engines, as enumerated in the said Tariff Heading.
4. In the Revision Petition, which is now appeal before us, the appellants contend that the Appellate Collector has not fully applied mind to the arguments, addressed before him during hearing, although it was explained to him that a plain reading of this Notification No. 395/76 makes it clear that the only requirement was that the part should be meant for application in the assembly of engines as specified in Tariff Item No. 84.06, and that the parts themselves do not have to go to the same heading. They contend that it is on this interpretation that number of similar claims have been allowed by the Collector of Customs, Bombay, whereas this claim was erroneously rejected.
5. During the hearing before us, Shri M.R. Karkhanis, Consultant, appeared for the appellants. The respondent was represented by Shri S.C. Rohatgi, DR. Shri Karkhanis, at the outset, invited our attention to two decisions of the Government of India involving identical issue, laying down that benefit of Notification No. 395-Cus./76 is not to be confined only to those parts which are themselves classifiable under Heading 84.06 of the CTA and that it could be extended to all parts which are shown to be meant for application in the type of engines specified in the said heading. One of the decisions which he pointed out is reported in ‘1982-ECR-299D (GOI)’ dated 21 October 19H1, passed by a Bench consisting of Finance Secretary to the Government of India, an Additional Secretary and a Joint Secretary, where they unequivocally held that the clarificatory notification issued subsequently, being Notification No. 29-Cus./77, sets at rest all doubts arising from grammatical construction of the language of the impugned notification, and held that benefit of Notification No. 395 Cus /76 is not to be limited to only those parts which were themselves assessable under Heading 84.06 of the CTA. A similar view had been earlier taken by Government of India by order dated 23-5-1981 reported in `1981-ECR-360D (G01)’, given by a Divisional Bench consisting of an Additional Secretary and a Joint Secretary.
6. Shri Karkhanis placed complete reliance on these decisions, which were given in the wake of review notices having been issued by the Government of India but, after taking into account the complete historical development and comparative study of related notifications, the said review notices were dropped by means of orders referred to above. On this being brought to the notice of Shri Rohatgi, he did not have any comments to offer against the decision of the Government of India and was not in a position to say whether the view expressed in the aforesaid two orders was anywhere challenged. He accordingly, in the nature of things did not argue against these decisions of the Government of India. We ourselves have gone through the wording of the notification and these decisions, and are of our considered view that the interpretation given to the wording of this notification in the aforesaid two decisions of Government of India is correct. We, therefore, hold that on parity of reasoning, benefit of Notification No. 395-Cus./76 was available to the imports which were subject-matter of the refund claim culminating in the present proceedings.
7. We, accordingly, allow the appeal, with consequential relief by way of refund as may become due to the appellants under the aforesaid notification.
