M/S MOORCO (INDIA) LTD. MADRAS versus THE COLLECTOR OF CUSTOMS, MADRAS

Citation: [1994] SUPP. 4 S.C.R. 81 · Decided: 29-09-1994 · Supreme Court of India · Bench: R.M. SAHAI, N.P. SINGH · Disposal: Appeal(s) allowed

Judgment (excerpt)

MIS MOORCO (INDIA) LTD. MADRAS 
v. 
THE COLLECTOR OF CUSTOMS, MADRAS 
SEPTEMBER 29, 1994 
[R.M. SAHAI AND N.P. SINGH, JJ.) 
Customs Ac~ 1962 : 
A 
B 
Schedule-<Jeneral rule for intelpretation-Rules 2(b ), 3( a) (b) ( c )-Ap-
plicability of rules-When arises-<Joods consisting of more than one material C 
or substance-Classification of-How to be done-Held specific heading of 
classification should be prefemd over general heading. 
Import Tariff-Tariff Items : 90.24, 90.26 and 90. 29. 
Flow metel""-lmport of components of flow mete..-Levy of duty-Held D 
components are to be classified under item 90.24 for levy of duty. 
The appellant, a manufacturer of "Volumetric displacement type flow 
meter", imported components and accessories for being used in the flow 
meter. The Assistant Collector held that (i) the accessories imported were 
used solely for the meter manufactured by the appellant; (ii) the meter E 
was capable of showing the rate of flow but since it was used for measuring 
volume also, it was liable to be classified under TarrilT Heading 90.26 for 
purposes of payment of duty. For coming to this conclusion the Assistant 
Collector relied on clause (c) of Rules 3 of the General Rules for inter-
pretation of the first schedule-Import TrailI of the Customs Act, 1962. The 
findings recorded by the Assistant Collector were affirmed by the Collector 
(Appeals) as well as by the Tribunal. Against the order of the Tribunal 
appeal was filed in this court. 
F 
Allowing the appeal, this Court 
HELD : 1. The items imported by the appellant shall be classified G 
for purposes of payment of duty under Tariff Heading 90.24. On the 
finding recorded by the Assistant Collector the end-product manufactured 
by the appellant being specially provided under Tariff Item 90.24 the 
accessories imported by the appellant which was solely used for manufac-
ture ofit was liable to be classified ou the same rate as . the item in which H 
81 
82 
SUPREME COURT REPORTS (1994] SUPP. 4 S.C.R. 
A 
it was used, uamely Dow meter. [86-G, 84-H, 85-A] 
B 
2. Interpretory Rules appended to the Customs Schedule are framed 
on Brussels Convention so that same description may apply to a particular 
class and character of goods in.the world trade. Rule 2(b) of the Rules 
provides that, 't!ie classification of goods consisting of more than one 
material or substance shall be according to the principles of rule 3. 
Further each of the clauses of Rule 3 are mutually exclusive. What is 
covered in clause (a) cannot be classified in (b) and (c) operates when 
neither applies. It is like a residuary clause. Clause (a) incorporates the 
common and general principle that the goods which can be classified 
C specifically with reference to any beading should be placed in that category 
alone. The specific heading of classification bas to be preferred over 
general beading. The clause contemplates goods which may be satisfying 
more than one description. Or it may be satisfying specific and general 
description. In either situation the classification which is the most specific 
bas to be preferred over the one which is not specific or is general in 
D nature. [85-B, C, H, 86-B, CJ 
E 
F 
3. Flow meter is specifically classified in heading No. 90.24. Whereas 
the beading 90.26 is general in nature. It applies to every production meter 
or calibrating meter for gas, liquid and electricity supply. Therefore, on 
the finding recorded by the Assistant Collector, the goods produced by the 
appellant specifically fall in 90.24. They may also fall in 90.26 but that 
being more general entry preference should have been given to the entry 
90.24 as the goods satisfy most specific description of being Dow meter. 
Since the goods manufactured by the appellant satisfied the specific 
description of Tariff Heading 90.24 being a Dow meter, the Tribunal 
committed an error of law in classifying it under Tariff Heading 90.26 as 
it was a latter item under the classification list. [86-D to Fl 
CIVIL APPELLATE JURISDICTION: Appeal No. 4342 of 1986. 
G 
From the Judgment and Order dated 27.10.86 of the Customs Excise 
and Gold (Control) Appellate Tribunal, New Delhi in A. No. C/1600/86-
B-2. 
C.S. Vaidyanathan, and S.R. Selia for the Appellant. 
H 
Joseph Valla Pally, G. Prakash and V.K. Verma for the Respondent. 
-
MOOR CO v. COLLECTOR OF CUSTOMS 
83 
The following Order of the Court was delivered : 
An interesting question of law relating to applicability of rules of 
interpretat

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