KIRLOSKAR CUMMINS LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioners are a public limited company and runs a factory where various internal combustion engines known as diesel engines are manufactured. The diesel engines are used for various industrial purposes such as generating sets, shovels, oil drilling rigs, bull-dozers, excavators etc. A small number of internal combustion engines manufactured by the petitioners are used in dumpers. For the purpose of manufacture of diesel engines, the petitioners have been importing certain components from time to time, a list whereof is annexed as Exh. 'b' to the petition. The petitioners also import other components such as crankshafts, camshafts, turbochargers, governors, starters, belts etc. Prior to August 2nd, 1976 the said components imported by the petitioners were liable to customs duty under the provisions of the Indian Tariff act, 1934. At the time of assessment of the components, the customs authorities claimed that the components were liable to countervailing duty under Item No. 34a of Central Excise Tariff.

(2.) THE petitioner disputed the claim made by the authorities pointing out that the components were imported for assembling the internal combustion diesel engines and components are not parts or accessories of motor vehicle. The Assistant Collector of Customs passed various orders and a copy of the specimen order dated February 14,1978 is annexed as Exh. 'c' to the petition. The petitioners filed several appeals before the Appellate Authority but the appeals ended in dismissal and a specimen copy of the appellate order dated October 28th, 1978 is annexed as exh. 'f' to the petition. The petitioners thereupon preferred revision applications to the Central government but the applications ended in dismissal and a specimen copy of the revisional order dated November 12th, 1982 is annexed as Exh. 'k' to the petition.

(3.) THE petitioners approached this Court by filing the present petition under Article 226 of the constitution of February 24,1983 and the relief sought is for setting aside the orders passed by the authorities below and restraining the respondents from recovering any countervailing duty on the components imported by the petitioners. During the pendency of the petition, the Customs, excise and Gold (Control) Appellate Tribunal, New Delhi in a proceeding adopted by the petitioners, accepted their claim that they are not liable to pay countervailing duty in respect of the components imported for the purpose of assembling diesel engines. The petitioners thereupon amended the petition and sought refund of the sum of Rs. 31,77,846. 45, particulars of which have been given at Exh. 'd' to the petition. Shri Korde, learned Counsel appearing on behalf of the petitioners, submitted that the findings of the authorities below that the components imported by the petitioners are liable to payment of countervailing duty is unsustainable. Shri Korde submitted that reliance on Item No. 34a of central Excise Tariff to conclude that the petitioners are liable to payment of countervailing duty is entirely erroneous. Shri Korde, submitted that it was not in dispute before any of the authorities below that all the components imported by the petitioners had gone into assembly of diesel engines. It was also not in dispute that 89% of the diesel engines manufactured by the petitioners are used for stationary purposes and hardly 11% are used in dumpers. Shri Korde submitted that merely because negligible part of diesel engines are used in dumpers which are treated as motor vehicles, it is futile to suggest that the import of components which went into assembly of diesel engines, were imported as parts and accessories of motor vehicles. In support of the submission, learned Counsel relied upon the decision of one of us (Pendse, J.) reported in [1980 (6) E. L. T. 557 (Bom)] Kirloskar Cummins Ltd. V. N. K. Kapoor and Others and the decision of the Supreme Court reported in [air 1976 SC 1418] M/s. Annapurna Carbon industries Co. v. State of Andhra Pradesh. It is required to be stated that the respondents have not cared to file any return though the petition is pending in this Court for last over ten years. After the petition was amended and the orders of the CEGAT were passed, the hearing of petition was adjourned on more than two occasions to enable the Counsel for the respondents to ascertain whether any appeal is preferred against the orders of the CEGAT before the Supreme Court. Though more than two months have lapsed, the department has not cared to ascertain the fact. Shri Sethna, learned Counsel appearing for the department, very fairly stated that the order of the Tribunal is binding on the department.