ORDER
T.P. Nambiar, Member (J)
1. This appeal is presented against the orders passed by the Collector of Customs & Central Excise. In this case, the appellants imported in January, 1986 Diesel Engine, Generator and Switch Board. The certificate from the suppliers giving separate values for the above items was also available. The Asstt. Collector held that Section 19 of the Customs Act is not applicabte to the present case and he rejected the refund claim. The Collector (Appeals) in this case stated that if these components put together constitute a complete diesel generating set with all essential characteristics of the same and also is capable of performing all the essential functions of the same and hence as per Rule 2(a) read with 3(b) of the interpretative Rules has to be assessed as a complete diesel set. He accordingly confirmed this finding of the adjudicating authority and he also held that recourse to Section 19 cannot be considered in the above circumstances.
2. The ld. Advocate, Shri S. Radhakrishnan appearing for the appellants contended before us that the finding of the lower authorities that this is a complete diesel generating set is not sustainable in view of the fact the interpretative rules came into effect from 28-2-1986. He therefore pointed out that on the date when the goods are imported and when the Bill of Entry was filed this rule was not in existence. Therefore, it was his case that recourse could not have been taken to the above said interpretative rules.
3. Heard the ld. JDR on a query from the Bench, he clearly stated that under the previous tariff, the generating set does not find an entry in any of the Chapter heading by itself. However, he drew our attention to Section Note 3 of Section XVI of the previous tariff which reads as follows :-
“3. Unless the Headings otherwise require, composite machines consisting of two or more machines fitted together to form a whole and other machines adapted for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function.”
4. We have considered the submissions made by both the sides. We find that in order to deny the benefit of refund, the lower authorities have relied on the Rule 2(a) of the interpretative rules read with Section 3(b) which came into force on 28.-2-1986. We observe that since the import of the appellants were prior to this date, the finding of the lower authority in relying on the above said rule which was not in force at the time of import is not correct and we set aside the same. However, we find that earlier rules of Rule 2 (a) and Rule 3(b) as existed prior to 28-2-1986 does not apply to the facts of this case. Therefore ruling out the case of the appellants to consider it under Section 19 of the Customs Act on the said ground is not justifiable. However, we find that the ld. JDR brought to our notice section note 3 of Section XVI which we have already reproduced above . From the above said section note, it is clear that the subject consignment is of a composite machine consists of three machines which together have a complementary function and perform the principal function of generating electricity. Therefore, the whole issue is covered by the said section note and the adjudicating authority should have recourse to the above said section note and the refund application of the appellants should be redecided in the light of the above said section note. For this purpose, we are of the view that the matter requires to be remanded to the adjudicating authority.
5. Accordingly, the impugned order is set aside and the case is remanded back to the adjudicating authority to decide the refund claim of the appellants in the light of our above observations in accordance with law.
6. The appeal is allowed by way of remand.