1985 (2) TMI 252 - AT - Customs

Customs duty exemption extended to imported crankshafts for engines, emphasizing broader interpretation

KIRLOSKAR OIL ENGINES LTD. Versus COLLECTOR OF CUSTOMS, BOMBAY

The Tribunal allowed the appeal, granting the appellants the refund as per Notification No. 395/76 for Customs duty exemption on imported crankshafts ... - Issues:1. Interpretation of Notification No. 395/76 for exemption from Customs duty on imported crankshafts.2. Applicability of Tariff Item No. 84.06 of the Customs Tariff Act, 1975.3. Rejection of refund claim by Assistant Collector and Appellate Collector of Customs, Bombay.4. Review of decisions by the Government of India on the interpretation of the notification.Analysis:The judgment revolves around the interpretation of Notification No. 395/76 for Customs duty exemption on crankshafts imported for Internal Combustion Piston Engines. The dispute arose when the imported crankshafts were assessed under Tariff Item No. 84.63 of the Customs Tariff Act, 1975, instead of the desired Tariff Item No. 84.06. The Assistant Collector rejected the refund claim, stating that the parts did not fall under the applicable heading for the exemption. The Appellate Collector upheld this decision, emphasizing the requirement for parts to be under Tariff Heading 84.06 for the exemption to apply.In the Revision Petition, the appellants argued that the Appellate Collector misinterpreted the notification's requirement. They contended that the parts only needed to be meant for application in the assembly of engines specified in Tariff Item No. 84.06, not necessarily classified under the same heading. The appellants highlighted similar successful claims in the past, suggesting an erroneous rejection in their case.During the hearing, the appellants' consultant referred to Government of India decisions supporting a broader interpretation of the notification. These decisions clarified that the benefit of Notification No. 395/76 extends to parts meant for application in specified engines, regardless of their classification under Tariff Heading 84.06. The Tribunal agreed with this interpretation, citing the clarity provided by the Government decisions and holding that the benefit should be available to the imported crankshafts in question.Consequently, the Tribunal allowed the appeal, granting the appellants the refund as per the notification. The judgment underscores the importance of interpreting Customs duty exemptions in line with the intent of the notifications and established precedents, ensuring fair treatment for importers seeking legitimate benefits.