1996 (8) TMI 105 - SC - Customs

Whether rotating hooks complete with bobbin case be treated as components for domestic sewing machines as prescribed under Clause (2) of Heading 84.2 (sic) of the Schedule? Held that - Government of India have wrongly exercised revisional powers by interfering with the decision of the Appellate Collector of Customs who allowed the appeal holding that the goods imported were not for domestic sewing machines and as such, they were classifiable under Item 84.41(1) of the Schedule. We, therefore, allow the appeal and set aside the impugned order.

Summary

Issues:
1. Challenge of an order passed by the Government of India under the Customs Act, 1962.
2. Classification of imported components for sewing machines under the Customs Tariff Schedule.
3. Interpretation of the term "domestic sewing machines" for customs classification purposes.
4. Review of a decision by the Appellate Collector of Customs by the Government of India.

Analysis:

The judgment pertains to an appeal challenging an order by the Government of India under the Customs Act, 1962, annulling an order in favor of the appellant passed by the Appellate Collector of Customs. The appellant, a firm manufacturing sewing machines, imported components for industrial sewing machines, which were classified by the Assistant Collector of Customs as components for domestic sewing machines, leading to a higher duty payment. The Appellate Collector ruled in favor of the appellant, allowing a refund of the excess duty paid. However, the Government of India disagreed with this classification, asserting that the components were primarily for domestic sewing machines based on various premises.

The appellant contended that the Government exceeded its powers by interfering with the Appellate Collector's fact-finding, arguing that the Collector's decision should have been accepted as a reasonable conclusion. The Customs Tariff Schedule, specifically Item 84.41, was crucial in determining the classification, with a distinction between "domestic sewing machines" and a general category of items. The appellant's license and related documents described the imported components as for industrial sewing machines, supporting their classification argument.

The judgment also discussed the interpretation of the term "domestic sewing machines" in the context of customs classification. Reference was made to circulars and legal precedents to support the appellant's position that the components were intended for industrial sewing machines. The court ultimately concluded that the Government of India had wrongly exercised revisional powers by overturning the Appellate Collector's decision. The appeal was allowed, setting aside the impugned order, with no costs imposed on either party.