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COLLECTOR OF CUSTOMS, MADRAS
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v.
INDIA ORGANIC CHEMICALS LTD.
MAY3, 2000
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[S.P. BHARUCHAAND SHIVARAJ V. PATIL, JJ.]
Customs Tariff Act :
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Central Excise Tariff-Tariff Item 68-Diesel engine set-Import of-
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Additional duly on-Assessee claiming refund on the ground that the said set
comprised of a diesel engine and a generator and additional duty should have
been charged separately on each of the two components-Claim rejected by
Assistant Collector of Customs and Collector of Customs (Appeals) but allowed
by Tribunal applying S.19 of Customs Act-Held, S. 19 of Customs Act not
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applicable-S. 19 applies to duty under Customs Act and not for purposes of
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assessment of additional duty under Customs Tariff Act-Tariff Item 68
appliable--Order of Tribunal set aside.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 8308of1995.
From the Judgment and Order dated 2.7.91 of the Central Excise
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Customs and Gold (Control) Appellate Tribunal, New Delhi in A. No. C/480/
84-B2 in 0. No. C/165/91-B2.
N.K. Bajpai, K.K. Dhawan and P. Parmeswaran for the Appellant.
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Rajiv Nanda and S. Rajappa for the Respondent.
The following Order of the Court was delivered :
The respondent imported a diesel engine set. The invoice thereof
showed the price of Rs. 8,50,740 for the said set along with standard spares
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and accessories. The Customs Department assessed the said set for the
pwposes of additional duty of Customs under T.I. 68 of the Central Excise
Tariff and, accordingly, charged addition~ duty at the rate of 8 per cent ad
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valorem. The responde~t filed a refund claim. It state that the said set
comprised of a diesel engine and an alternator. It provided the break up of
the price of.the said set, namely, Rs. 5,95,540 for the diesel engine and Rs.
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2,55,200 for the alternator. It claimed that the additional duty should have
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C.C.E. v. INDIAN ORGANIC CHEMICALS LTD.
947
been charged separately on each of the two components of the said set and
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the benefit of exemption notifications in this regard should have ·been given.
The refund claim was rejected by the Assistant Collector of Customs. The
respondent's appeal to the Collector of Customs (Appeals) failed.
The respondent carried the matter to the Tribunal. The Tribunal
applied Section 19 of the Customs Act and came to the conclusion that the
two main components of the said set, namely, the diesel engine and the
generator, should have been separately assessed to additional duty and the
benefit of the applicable exemption notifications given. Against the order
of the Tribunal, the Customs authorities have preferred this appeal.
In the first place, Section 19 of the Customs Act is inapplicable to
the assessment of additional duty under the Customs Tariff Act. Section 19
applies to "duty" that is, "duty under the Customs Act", as is clear from
Section 2(15) of the Customs Act. The method of determination of Customs
duty thereunder where goods consist of articles liable to different rates of
Customs duW is not applicable for the purposes of assessment of additional
duty under the Customs Tariff Act.
As is clear from the order of the Tribunal, what respondent had
imported was the said set. That was what the invoice referred to and it gave
the price for it. That the said set comprised of a diesel engine and an alternator
was of no consequence for the purposes of assessment of additional duty.
There is no dispute that for the purposes of such assessment of the said set,
Tariff Item 68 was applicable.
We think, in the circumstances, that the appeal should be allowed and
the order of the Tribunal set aside. The order of the authorities below shall
regulate the assessment of additional duty on the said set.
Order on the appeal accordingly. No order as to costs.
R.P.
Appeal allowed.
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