TaxTMI 
TaxTMI 
1983 (12) TMI 277
X X X X Extracts X X X X
X X X X Extracts X X X X
....ue Streak II Straight Knife Cloth Cutting Machines. They claimed the classification under Tariff Heading 84.40(1) of Customs Tariff Act, 1975 (hereinafter called the 'Act') with benefit of Notification No. 41/Cus-178, dated 1-3-1978. The Assistant Collector of Customs in his order dated 9-7-1980 held that the goods imported were not automatic cloth cutting machines in the sense that various movements were coordinated by manual control. He also observed that the machine could come more appropriately under Tariff Heading 85.05 of the Act because the machine was a tool for working in the hand. Even assuming that the machine would come under the purview of Heading 84.40, he held that the classification under 85.05 occurring later in the Tariff ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ore be a tool for working in the hand within the meaning of Heading 85.05. Even if it was held that Heading 84.40 and the Heading 85.05 can both apply, under Rule 3(c) of the Statutory Interpretative Rules, the later of the two items should be preferred. 4. The two points that arise for consideration in the appeal are : (i) whether the machines in question would come within the Tariff entry 85.05 or 84.40; (ii) whether the appellants are entitled to the benefits of the Notification No. 41-Cus/78, dated 1-3-1978. 5. For the purpose of understanding, the relevant contentions, it must be said that 85.05 refers to "Tools for working in the hand, with self-contained electric motor". This heading is specifically re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t Serial No. 14 of 85.05 referred to cutters for cutting textiles in ready-made clothing industry. But the term "cutters" would infer that the cutting medium held in hand removes the material from the work piece. In the instant case, both the Appellate Collector and also the Assistant Collector have mainly decided the issue on the basis that the machine required certain amount of operation by the hand and the entry 85.05 would be more appropriate. As pointed out above, a mere manual control of the movements of the machine for securing particular designs will not reduce the same as a tool for working in hand. 6. Let us now consider whether 84.40 would be applicable. Entry 84.40 refers, among others, to Fabric Folding, Reeling or Cutt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....v. Union of India and others. It must be mentioned that in respect of the machinery under scrutiny, the Clothing Manufacturers Association of India have stated that this machine was known as "Automatic Cloth Cutting Machine" in the industry. The Government of India, Ministry of Industry, Department of Industrial Development (Office of the Textile Commissioner), in their letter dated 2-4-1980, have stated that the Blue Streak II Straight Knife Cloth Cutting Machines are allowed to be imported under Sl. No. 5(29) of Appendix 2 of the Import Policy. The Eastman Export Corporation have also certified that the knives are automatically sharpened. It is argued that these documents should not be relied on as they were issued subsequent to the impor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the Notification or render the Notification to a nullity. It is rightly explained that identical goods were released by Bombay, Calcutta and Madras Custom Houses giving the benefit of the Notification. While there is no res judicata or estoppel in taxation matters, we are of the view that Customs authorities should not, in the absence of fresh facts brought to their notice, contrary to judicial decision or change in law, arbitrarily change a Customs Classification in respect of an article or goods. The term "automatic" has been defined in McGraw-Hill Dictionary of Scientific and Technical Terms as follows :- "Automatic : (ENG) Having a self-acting mechanism that performs a required act at a predetermined time or in response to certain....