THE BRITISH MACHINERY SUPPLIES CO. versus THE UNION OF INDIA AND ORS.

Citation: [1996] SUPP. 4 S.C.R. 294 · Decided: 06-08-1996 · Supreme Court of India · Bench: S.P. BHARUCHA · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
THE BRITISH MACHINERY SUPPLIES CO. 
v. 
THE UNION OF INDIA AND ORS. 
AUGUST 6, 1996 
[S.P. BHARUCHA AND K.T. THOMAS, JJ.] 
Customs Act, 1962-Tariff Schedule items-84.2/84.4(1~Imp01t of 
components of industrial sewing machine rotating hooks with bobbin 
C case-Higher duty charged treating the goods as components of domestic 
sewing machines-Appellate Collector held that goods imported are not for 
do111estic sewing 1nachines-Revision-Govenunent of India annulled of order 
Appellate Collector-Held, the Govemment of India have wrongly exercised 
revisional power by inte1fering with the decision of the Appellate Collec-
tor-Order set aside. 
D 
E 
The appellant firm was engaged in manufacturing sewing machines 
and accessories. It imported components of industrial sewing machines, 
which were liable to customs duty at the rate of 40% as per item 84.41(1) 
of the Customs Tariff Schedule. The Assistant Collector of Customs 
charged higher duty treating the goods as compone:its for domestic sewing 
machines - under clauses (2) item 84.2. Appellant paid higher duty &nd 
applied for refund Application made before Assistant Collector was 
rejected. The statutory appeal before the Appellate Collector of Customs 
was allowed on the ground that the goods imported were not for domestic 
se\\ing machines. Since excess amount paid was not refunded, ·the appel-
F 
Ian! filed a writ petition in the High Court for appropriate directions. In 
the meantime, the Government of India in exercise of its revisional power 
annulled the order passed by the Appellate Collector of Customs. Hence 
the present appeal. 
The contention of the appellant was that the Central board of Excise 
G and Customs had clarified that the ordinary sewing machines used in the 
house or-by tailors or dress makers etc., to be manned by manual labour 
-
or whiCh have less then 1/4 HP would continue to be considered as 
domestic sewing machines. It was further contended that the Government 
of India had gone beyond its powers in interfering with the findings of fact 
H arrived at by the Assistant Collector. 
294 
.-._ -
BRITISH MACHINERY SUPPLIES CO. v. U.0.1. 
295 
The respondents contended that classification as per tariff cannot be A 
determined on the basis of what the Collector of Central Excise and Cus-
toms or the Board of Central Excise would have thought about it because 
it is a legislative process and its interpretation should be in accordance with 
law. It "as further contended that a particular horse power for the motor 
attached to the machines may or may not be decisive in coming to the con-
clusion that the component is principally used for domestic se"ing machines. 
Allowing the appeal, this Court 
HELD : 1. The Government of India had wrongly exercised its 
revisional powers by interfering with the decision of the Appellate Collector 
that the goods imported were not for domestic sewing machines and as such 
they were classified under Item 84.41(1) of the Schedule. (300-E-F; 297-A] 
B 
c 
2. The very licence granted to the appellant contains a description 
which cannot normally be marginalised in reaching a conclusion on this 
disputed aspect. A list of components to bt imported during the licensing D 
period is appended with the licence. it starts with the description that the 
components are for industrial sewing machines. The first item in that list 
is "rotating hooks complete with bobbin case" which is the component 
involved in this case. (298-E-F] 
3. The circular issued by Central Board of Excise and Customs 
cannot be over looked. It is binding on the department as they have made 
it known to all concerned that sewing machines .covered by motors of 1/4 
HP or more would fall outside the scope of the term "domestic sewing 
machines". The relevant heading in the tariff i.e. 84.41 uses the expression 
"domestic sewing machines,, and put all the other sewing machines in the 
residuary category "not elsewhere specified". When the Customs officials 
themselves have understood that sewing machines designed for operation 
powered by motor of 1/4 HP or more would fall outside the scope of domes-
tic sewing machines, it would be inept to suggest that they should adopt a 
different stand when mulcting the importer with duty unless there is a 
judicial pronouncement on the matter. (299-D-F] 
Para Enginee1ing Works, New Delhi v. Collector of Customs, New Delhi, 
(1987) 27 ELT 668, approved. 
E 
F 
G 
Nutsteel Equipment P1ivate Limited v. Collector

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