KIRLOSKAR CUMMINS LIMITED Vs. N K KAPOOR

JUDGEMENT

(1.) The short question which falls for consideration in this petition filed under article 226 of the Constitution of India is whether the imported component parts utilised for vehicular type of diesel engine are eligible for exemption under notification No. 82/60 dated 6th August 1960, issued under sec. 23 of the Sea Customs Act. The facts which are not in dispute are briefly stated.

(2.) The petitioners are a Company having their registered office at Kothrud, Poona-29, and the petitioners carry on the business of manufacture of internal combustion engines. By anotification No. 82/60 dated 6th August, 1960, issued under sec. 23 of the Sea Customs Act, 1878 , the components pat of any machinery when imported into India and proved to the satisfaction of the Collector of customs to be required for the purpose of initial setting up that machinery or for its assembly or manufacture were exempt from payment of so much of Customs Duty leviable thereon as was in excess of the rate applicable to the said machinery when imported complete. One of the conditions requisite for the applicability of the said notification was that the Development Wing of the Ministry of Commerce and Industry should certify in each case that the component part in question were or would be required for the purpose specified therein and should recommend grant of exemption. The importer was also required to execute a bond in the form prescribed binding himself to pay on demand in respect of such component parts as were not proved to the satisfaction of the Collector of Customs to have been used for the purpose for which the exemption was granted. The purpose for which the exemptions was granted was to encourage indigenous manufacture of machinery by importing only a few components not available within the country.

(3.) During the period 1964 to 1968 the petitioners imported component parts of internal combustion engines of the total value of Rs. 39,13,400.98 p. for manufacture of diesel engines after the Directorate General of Technical Development issued to the petitioners development wing certificate and the petitioner executed the requisite bonds. In the relevant bills of entry the petitioner has declared from time to time the classification of the goods for their assessment and the goods sought to be declared were described for their assessment and the goods sought to be declared were described as "component parts of diesel engines for assembly of stationary type under Notification No. 82/60" After the goods were imported the petitioner applied for cancellation of bonds. However, the Assistant Collector of Customs by a letter dated May 17, 1969, called upon the petitioner to furnish certain information as to how the components parts imported were used for what purpose the diesel engines assembled with the aid of imported parts were actually used. The petitioners informed the Assistant Collector of Customs that between 1964 to 1968, the components parts were imported and were used for the purpose of assembling diesel engines. Out of the diesel engines assembled 208 vehicular type of diesel engines were fitted on dumpers.