Mahabir Manufacturing Company ... vs Union Of India (Uoi) And Anr.
2004 Latest Caselaw 1018 Del

JUDGMENT

B.C. Patel, C.J.

1. The petitioners imported 3 post parcels D. Nos. 129343, 44, 47/8/77 vide Invoice Nos. CC-52219 dated 5th August,1977 containing (1) Rotating hook set with bobbin case and (2) Thread take up lever complete with lock and pin. The petitioners sought clearance of the above sewing machine parts under Item 84.41(1) of Customs Tariff at the rate of 40% on the ground that these are meant for industrial sewing machines which require for its operation a motor of 1/4 horse power and above.

2. However, the Assistant Collector (Customs) by an order dated 18.5.1978 expressed an opinion that these parts can be used in the sewing machine which require for its operation less than 1/4 horse power motor and which also work manually with treadle and is used by tailors and professionals. It is in view of this that he held that the duty under the Customs Tariff Item No. 84.41(2) at the rate of 100% plus 20% ad valorem was applicable and assessed accordingly. This order was challenged in appeal, and he Appellate Collector of Customs on being satisfied that the goods in question merited classification under Tariff Heading 84.41(1), set aside the Assistant Collector's assessment order. The order was made on or about 15th February 1979. The said order was challenged before the Central Government by the Customs Department. By an order dated 30th January,1980, the impugned order, which is at page 44, Annexure P-1, the Central Government upheld the order of the Assistant Collector classifying the good under tariff heading 84.41(2) of the Customs Tarrif Act, 1975. It is this order against which the present petition is filed.

3. We find that the issue is covered by a decision of the Apex Court in British Machinery Supplies Company v. Union of India : where similar imports were made by the importer and items were classified under Item 84.41(1). Item 84.41 (1) deals with goods ''not elsewhere specified'' and Item 84.41(2) refers to ''domestic sewing machines''. Therefore, if the parts are imported for domestic sewing machines, the tariff would be at the rate of 100%. However, if it is for machines not elsewhere specified, then it would be at the rate of 40%. In para 13 of the judgment, the Apex Court pointed out as under:-

''13. We find that the observations made by the Special Bench of CEGAT in Para Engineering Works, New Delhi v. Collector of Customs, New Delhi -1987 (27) E.L.T. 668, as more appropriate to the facts of this case. A manufacturer, importing some component of industrial sewing machines with a motor of 1/4 H.P. had to approach the Special Bench as a similar question was raised by the customs officials. The Tribunal noted that each Bill of Entry pertaining to the import in that case contained reference to the invoices which were properly co-related with the bills. Those documents contain the description that the components were for industrial sewing machines. Assessment made under a different item inspite of such invoices was held to be unsustainable. The position in this case is almost similar.''

4. Here also it is clear that the parts imported were meant for industrial sewing machines. Nothing contrary is placed on the record although the burden is on the revenue if they want to include the imported materials within the specified category to substantiate that those materials were such. From the record it is clear that the Assistant Collector recorded that the parts can be used for industrial as well as domestic machines. In view of the aforesaid decision of Apex Court, we allow the writ petition. The order of the revisional authority is quashed and that of the appellate authority is restored.

5. The writ petition is allowed accordingly with no orders as to costs.