COLLECTOR OF CUSTOMS, BANGALORE versus M/S. MAESTRO MOTORS LTD. AND ANR.

Citation: [2004] SUPP. 6 S.C.R. 745 · Decided: 07-12-2004 · Supreme Court of India · Bench: S.N. VARIAVA · Disposal: Appeal(s) allowed

Judgment (excerpt)

COLLECTOR OF CUSTOMS, BANGALORE 
A 
V. 
M/S. MAESTRO MOTORS LTD. AND ANR. 
DECEMBER 7, 2004 
B 
[S.N. VARIAVA AND DR. AR. LAKSHMANAN, JJ.] 
Customs Act, 1962 : 
Section 25(1)-Customs Tariff Act, 1975, First Schedule-Exemption 
Notifications-Notification Nos. 29183 and 72193-lmport of passenger car C 
components in Completely Knocked Down (CKD) condition packs-Bill of 
entries for clearance of goods claimed the same to be components of motor 
vehicles-Claiming benefit-Correctness of-Held, applying interpretative 
Rule 2(a), the consignments are motor cars and not components-
Components in CKD packs not exempted and benefit of notifications not D 
available. 
Respondents are manufacturers of motorcars. Respondent-Maruti 
Udyog Limited imported CKD packs and in the bills of entry for clearing 
the goods claimed the same to be components of motor vehicles. The 
company also claimed benefit of notification nos. 29/83 and 29A/83, E 
which permitted exemption from levy of Custom duty to a certain limit 
with respect to components, including components of fuel-efficient 
motorcars in semi knocked down packs or completely knocked down 
packs. Adjudicating officer held that imported components being 
complete cars had the complete character of finished product and as F 
such were to be treated as motor cars and not components and as such 
not entitled to benefit of exemption notification. 
In appeal, the Commissioner held that goods were components/ 
parts and not motorcars and also held that company was entitled to the 
benefit of notification No. 29/83. Tribunal upheld the appellate order. G 
Hence, this appeal by the revenue. 
It was contended that the company would not be entitled to the 
benefit of notification inasmuch as they had not complied. with the 
condition of notification. 
745 
H 
746 
SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R. 
A 
In the other appeal, Respondent-Maestro Motors Limited imported 
B 
c 
the entire cars in CKD. Claiming goods to be components, the company 
also claimed benefit of notification No. 72/93, which exempted from 
customs duty components and parts. The goods were imported by filing 
different bills of entires with Bombay and Madras customs. 
The Adjudicating authority held that between the imports in 
Bombay and Madras, entire cars had been imported in CKD and the 
components were, thus, classified as cars. Benefit of notification No. 72/ 
93 was not, thus, available to the company. Tribunal held that the 
company was entitled to the benefit of notification No. 72/93. Hence, the 
appeal by revenue. 
Allowing the appeals, the Court 
HELD : 1. As per Rule 2(a) of the General Rules of Interpretation 
D of Harmonized system, in the absence of any denial that components 
were imported in CKD packs, what was imported was completely knocked 
down cars. The components presented had the essential character of a 
complete car even though presented in unassembled form. The 
components had to be classified as car. [750-G) 
E 
1.2. Respondent-Meastro Motors Limited had imported, in effect 
car in co~pletely knocked down condition. Applying interpretative 
Rule 2(a), the goods claimed are to be classified as cars. [755-H) 
2.1. To avail the benefit of a notification a party must comply with 
F 
all the conditions of a notification. Further, a notification has to be 
interpreted in terms of its language. If, in the notification, exemption is 
granted with reference to tariff items in the First Schedule to Custom 
Tariff Act' 1975, then the same rules of interpretation must apply. In 
that case, goods will be classified, even for the purposes of the notification, 
as they are classified for purposes of payment of Customs duty. [753-D] 
G 
2.2. When the language is plain and clear, effect must be given to 
it. Effect must be given to the wording of the notification. The components 
in completely knocked down packs would get the exemption under this 
notification, even though for purposes of classification they may be 
H considered to be cars. (753-E) 
COLLECTOR OF CUSTOMS, BANGALORE v. MIS. MAESTRO MOTORS LTD. 7 4 7 
2.3. Neither side has shown what were the certificates, establishing A 
compliance with the conditions of the notification, which were produced 
before the Adjudicating authority. In the absence of those certificates 
it can't be decided whether the conditions imposed by the notification 
have been fulfilled. Hence, the matter remitted to CEGAT for 
reconsideration of this aspect. [754-A) 
2

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