1997 (8) TMI 75 - SC - Customs

Whether PPLF imported by the appellant could not be treated as component of the machinery installed by the petitioner? Held that - Having regard to the facts of the case, we are of the view that no error of law has been committed in the revisional order. The appellant had imported plants and machineries. While using the plants and machineries, PPLF was used as a device to protect the rubber coated tyre fabric from atmospheric moisture and dust. PPLF was not a component of the machine itself. It was not a constituent part. It was used as a Liner Fabric not only in tyre production but also in similar other industrial processes. For this finding of fact reliance was placed on the affidavits of Shri Ram Mohan Rai and Shri Waldemar Lange where it was stated that PPLF was used as Liner component of tyre manufacturing machines and in similar other industrial uses. Thus ultimately held that PPLF imported by the appellant could not be treated as component of the machinery installed by the petitioner. Appeal dismissed.

Summary

Issues:
1. Classification of imported goods under Item 53 ICT.
2. Interpretation of "component parts of machinery" under Item 72(3) ICT.
3. Application of duty rates on imported goods.

Detailed Analysis:
The case involved a dispute regarding the classification of Polypropylene Liner Fabric (PPLF) imported by the appellant under the Customs Department's levy of duty at a high rate under Item 53 ICT. The appellant contended that PPLF should have been classified as a component part of the machinery under Item 72(3) ICT rather than as "Textile manufactures not otherwise specified" under Item 53 ICT. The appellant argued that PPLF was essential for the working of the machinery and should be considered a component part rather than a separate textile product.

The Government of India, in a revisional order, held that the term "component part" under Item 72(3) ICT referred to parts essential for the working of the machine and not for any other purpose. The government concluded that PPLF was more of an accessory to the equipment rather than a component part based on the functions and nature of PPLF. The government also noted that the fabric imported was in running lengths and sizes, making it unsuitable to be considered as a component part of any machine.

Expert affidavits were submitted on behalf of the appellant to establish that PPLF was indeed a component of the machine. However, after considering the facts and affidavits, the court ultimately held that PPLF imported by the appellant could not be treated as a component of the machinery installed by the appellant. The court found that PPLF was used as a Liner Fabric to protect the rubber coated tyre fabric and was not a constituent part of the machine itself.

The court emphasized that for imported components to be classified under Item 72(3) ICT, they must have a special shape or quality essential for their use in a specific machine, which was not the case with PPLF as it came in various sizes and forms suitable for multiple machines. Therefore, the court concluded that the order under appeal did not have any legal infirmity, and the appeals were dismissed with no order as to costs.