1992 (11) TMI 172 - AT - Customs

Summary

Issues Involved:
1. Classification of imported goods under Customs Tariff Act.
2. Applicability of Notification No. 156/86 for concessional duty.
3. Interpretation of Section Note 2(a) of Section XVI of the Customs Tariff Act.
4. Distinction between component parts and spare parts.

Issue-wise Detailed Analysis:

1. Classification of Imported Goods:
The appellants imported 'Clutch and Brake assembly' and sought classification under Chapter Heading 8466.94 of the Customs Tariff Act, claiming it as a spare for 'Herlan Impact Extrusion Press Model P-8'. The lower authorities classified the goods under Chapter Heading 8483.60 as 'Transmission Parts'. The appellants contended that the imported items are not merely clutches but are clutch and brake assemblies, which should not be classified under Heading 8483.60. The Tribunal held that the 'clutch and brake assembly' is a composite item and cannot be classified as merely a clutch under Heading 8483.60. Instead, it should be classified under Heading 8466.94 as parts suitable for use with machine tools falling under Heading 84.62.

2. Applicability of Notification No. 156/86 for Concessional Duty:
The appellants claimed the benefit of Notification No. 156/86, which covers "Component parts of machine tools for working metals". The lower authorities denied this benefit, arguing that the notification mentions only component parts and not spare parts. The Tribunal, however, concluded that there is no distinction between component parts and spare parts when the latter are used to replace worn-out parts in a machine. Therefore, the benefit of Notification No. 156/86 should be extended to those parts classified under Heading 84.66.

3. Interpretation of Section Note 2(a) of Section XVI of the Customs Tariff Act:
The Assistant Collector and the Collector (Appeals) applied Section Note 2(a) of Section XVI, which states that parts included in any of the headings of Chapter 84 or 85 should be classified in their respective headings. The Tribunal found that Note 2(a) was wrongly applied since the 'clutch and brake assembly' is a composite item and does not fall under the description of 'clutches and shaft couplings'. Instead, Note 2(b) should apply, classifying parts suitable for use solely with a particular kind of machine with the machines of that kind.

4. Distinction between Component Parts and Spare Parts:
The Tribunal addressed the distinction made by the lower authorities between component parts and spare parts. The Tribunal referred to the decision in Vaz Forwarding (P) Ltd. v. Collector of Customs, which interpreted the term 'component parts' narrowly in the context of Notification 284/76. However, the Tribunal found that in the context of Notification 156/86, component parts are mentioned in isolation and not in conjunction with machine tools. Therefore, there is no difference between component parts and spare parts for the purpose of this notification. The benefit of Notification 156/86 should be extended to parts classified under Heading 84.66.

Conclusion:
The appeal is disposed of with the Tribunal holding that the 'clutch and brake assembly' and its parts should be classified under Heading 8466.94. The benefit of Notification No. 156/86 should be extended to these parts, as there is no distinction between component parts and spare parts in this context.