MOTOR INDUSTRIES CO. LTD Vs. COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) THE present order disposes of the two captioned appeals which involved identical issues. These appeals had been originally filed before the Central Government as Revision Applications as those have come on transfer to this Tribunal, under the provisions of Section 131 -B of the Customs Act, 1962 for disposal as if they were appeals presented before it.

(2.) THE goods in relation to which the dispute in the present appeals has arisen are two consignments of "Diamonds impregnated grinding wires". The Customs authorities at Madras assessed them to duty under Heading No. 68.01/16(1) of the First Schedule to the Customs Tariff Act, 1975 (hereinafter referred to as the Customs Tariff Schedule at 100% ad valorem (basic customs duty) plus 20% ad valorem (auxiliary duty) plus 15% (additional -countervailing -customs duty). After clearance of the goods on payment of the duty so assessed, the appellants filed refund claims before the Assistant Collector on the ground that the goods were correctly assessable to duty under Heading No. 82.05 (1) of the said Customs Tariff Schedule at 60% ad valorem (basic customs duty) plus 15% ad valorem (auxiliary customs duty). The Assistant Collector rejected the claim on the ground that the goods were only impregnated with diamond and that since they did not have cutting teeth, flutes, grooves or the like, they would not qualify for classification under Heading No. 82.05. The appellants pursued the matter in appeal before the Appellate Collector of Customs on the ground that the subject grinding wires were adopted for grinding operations to meet the appellants' specific requirements of pintlehole grinding of Nozzles where the diameter had to be controlled to a very high degree of tolerance to achieve precise delivery of fuel, that the manufacturer's catalogue referred to the goods as "Rotating Diamond files and sawing wire" and that they had a working surface of precious/semi -precious stones on a support of a base metal. They further contended that these grinding wires were used mounted on a special collet on a special purpose machine with high frequency spindles. The appellants relied on Note l(c) to Chapter 82 of the Customs Tariff Schedule and submitted that the goods correctly fell under Heading No. 82.05(1). The Appellate Collector, however, relied on Note l(d) to Chapter 82 and rejected the contentions of the appellants. It is against the orders of the Appellate Collector that the appellants filed Revision Applications before the Central Government which have been transferred to this Tribunal, under the provisions of Section 131 -B of the Customs Act, 1962 for disposal as if they were appeals presented before it.

(3.) IN the Revision Applications (hereinafter referred to as appeals), the appellants have reiterated their contentions before the lower authorities to the effect that the subject goods correctly fell under Heading 82.05(1) in view of Note l(c) to Chapter 82. In a write -up furnished along with the appeals, it has been stated that the subject diamond impregnated wire is used on a special purpose precision grinding machine for internal grinding of very small bore of the injector nozzle and that the form accuracy and the tolerances on the ground hole are extremely close. The Write -up also furnishes other technical features and properties of the diamond impregnated wire and the diamond grains coated on the base wire of spring steel. In a subsequent communication dated 8 -3 -1983, the appellants have made further written submissions in which they have reiterated their contentions that the subject goods are in the nature of a tool like a Diamond Dressing Tool used on a special purpose precision grinding machine for internal grinding of a very small bore of the injector nozzle. As regards the levy of countervailing duty, they have drawn attention to the Central Board of Excise and Customs decision No. F. B -48/1/71 CX -1I dated 31 -7 -1971 holding that Diamond Dressing Tools and Diamond Indenters do not fall under Item 51 -CET.