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Issues Involved:
1. Correct amount of import duty chargeable on thread rolling dies. 2. Classification of thread rolling dies under item 72(3) or item 71(a) of the Indian Customs Tariff. Issue-wise Detailed Analysis: 1. Correct Amount of Import Duty Chargeable on Thread Rolling Dies: The petitioner, a partnership firm engaged in the manufacture and sale of automobile parts, imported thread roll dies and knurl dies from Japan for use in a Tsugami Thread Rolling machine. These dies were assessed under item 71(a) of the First Schedule to the Indian Customs Tariff by the Assistant Collector of Customs, Madras. The petitioner argued that the imported goods should have been classified under item 72(3) instead, as they were component parts essential for the machine's operation. The Assistant Collector rejected the refund applications, and subsequent appeals to the Appellate Collector and revisions to the Government of India were also unsuccessful. The writ petitions sought to quash these orders and obtain a refund of the differential duty. 2. Classification of Thread Rolling Dies: The core issue was whether the thread rolling dies should be classified under item 72(3) or item 71(a). Item 71(a) covers "tools and parts thereof," while item 72(3) pertains to "component parts of machinery" essential for the machine's operation, excluding small tools like dies. The petitioner contended that the thread rolling dies were specially designed for the Tsugami machine and could not be used for any other purpose, thus falling under item 72(3). The Customs authorities, however, classified them under item 71(a), citing the exclusion clause in item 72(3) for small tools. Legal Analysis and Judgments: The court examined the specifications and design of the imported dies, which were made from special steel alloy and tailored to fit the Tsugami Thread Rolling machine. The dies were essential for the machine's operation and could not be used for any other purpose. The court referenced previous judgments, including Carborandom Universal Ltd. v. Assistant Collector of Customs and Siemens Engineering and Manufacturing Co. of India Ltd. v. Union of India, which supported the classification of specially designed components as essential parts of machinery under item 72(3). The court concluded that the imported dies were not "small tools" as described in the exclusion clause of item 72(3) but were integral components of the Tsugami Thread Rolling machine. Therefore, they should be classified under item 72(3) and not item 71(a). Conclusion: The court quashed the impugned orders of the Government of India and directed the Customs authorities to refund the differential duty collected from the petitioner firm. The judgment emphasized that the imported dies were essential components of the Tsugami Thread Rolling machine, specifically designed and manufactured for that purpose, and thus should be classified under item 72(3) of the Indian Customs Tariff.
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