Classification of bearing caps as engine parts upheld, allowing exemption where the Chapter X procedure was followed.

Bearing caps were treated as parts of diesel-operated internal combustion engines rather than as goods of Chapter Heading 73.08, because a mistaken classification entry could not change their true tariff identity. On that basis, they fell under Chapter Heading 84.09, and since the Chapter X procedure had been followed during the relevant period, Notification No. 217/85 applied. The exemption was therefore correctly granted and the Revenue's challenge failed.

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Issues: Whether bearing caps, though initially classified under Chapter Heading 73.08, were in substance parts of diesel-operated internal combustion engines classifiable under Chapter Heading 84.09 and therefore eligible for exemption under Notification No. 217/85 while following Chapter X procedure.

Analysis: The goods were found to be parts of diesel engines, and their earlier placement under Chapter Heading 73.08 was treated as a mistake that did not alter their true character. A wrong entry in the classification list could not divest the goods of their correct tariff identity as parts of diesel engines. Since the goods were classifiable under Chapter Heading 84.09 and the Chapter X procedure had been followed during the relevant period, the exemption notification applied to them.

Conclusion: The exemption was rightly allowed and the Revenue's challenge failed.

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