1991 (10) TMI 127 - AT - Customs

Summary

Issues Involved:
1. Eligibility for concessional rate of duty under Notification No. 33/88-Cus.
2. Classification of imported parts as components of alternators or vacuum pumps.
3. Applicability of DGTD certificates.
4. Interpretation of exemption notifications.

Detailed Analysis:

1. Eligibility for Concessional Rate of Duty under Notification No. 33/88-Cus.
The appellant, M/s. Lucas-TVS, imported various parts and claimed the benefit of Notification No. 33/88-Cus., seeking a concessional rate of duty. The Assistant Collector denied the benefit, stating that the notification extended only to electrical parts like alternators, not mechanical parts like vacuum pumps. The Collector (Appeals) upheld this view, noting that the vacuum pump, although attached to the alternator, did not aid its functioning and was instead a mechanical part used for braking systems. The Tribunal confirmed this interpretation, stating that the vacuum pump did not qualify for the concessional rate under Serial No. 2(ii) of the notification.

2. Classification of Imported Parts as Components of Alternators or Vacuum Pumps
The appellant argued that the imported parts, including the Hitachi Vacuum Housing Assembly, Rotor Assembly, and others, should be classified as parts of alternators. The Assistant Collector and Collector (Appeals) found that while the alternator could function independently, the vacuum pump was a detachable component used for braking systems. The Tribunal agreed, emphasizing that the alternator and vacuum pump had distinct functions and the vacuum pump did not contribute to the alternator's primary function of generating electricity.

3. Applicability of DGTD Certificates
The appellant cited DGTD certificates and various court decisions to argue that these certificates were binding on Customs authorities. However, the Tribunal referred to the decision in Uma Arts Studio v. Collector of Customs, which stated that Customs authorities could independently assess the applicability of concessional rates and were not bound by DGTD certificates. The Tribunal upheld the lower authorities' decision, noting that the DGTD certificates did not alter the classification of the imported parts.

4. Interpretation of Exemption Notifications
The appellant contended that the integrated alternator with a vacuum pump should be considered as a composite machine performing complementary functions, thus qualifying for the concessional rate. The Tribunal, however, referred to several precedents, including the Supreme Court's decision in Dunlop India and Atul Glass Works, which emphasized that the classification of goods should be based on their primary function. The Tribunal concluded that the vacuum pump, being a mechanical part for braking systems, did not qualify for the exemption under Serial No. 2(ii) of the notification.

Separate Judgment on Alternative Plea:
The appellant also argued that if the parts were not considered as components of alternators, they should be classified under Serial No. 5 of the notification as parts of brake assemblies. The Tribunal noted that this alternative plea was raised for the first time before the Tribunal and had not been examined by the lower authorities. Citing the need for a thorough examination, the Tribunal remanded the matter to the Assistant Collector to determine whether the vacuum pump could be classified under Serial No. 5 of Notification No. 33/88-Cus.

Conclusion:
The Tribunal upheld the lower authorities' decision that the imported parts did not qualify for the concessional rate under Serial No. 2(ii) of Notification No. 33/88-Cus. However, it remanded the case to the Assistant Collector to examine the alternative plea regarding classification under Serial No. 5 as parts of brake assemblies.