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TMI Blog1998 (2) TMI 333X X X X Extracts X X X X X X X X Extracts X X X X ..... oms duty to the specified parts imported for the manufacture of quartz analog wrist watches. Among the various parts, so specified for the purposes of applying the concessional rate of Customs duty, different components for the watch case as well as the complete watch cases for quartz analog wrist watches were covered. It was alleged in the show cause notice dated 30-6-1988 that the watch cases with bracelets were not eligible for the concession under Customs Notification No. 65/87-Cus., as claimed by the importers. There were other allegations also with regard to the Import Trade Control (ITC) restrictions, valuation etc. Similar allegations were made in another show cause notice dated 10-8-1988. It was alleged that the watch case with bracelet was classifiable under Heading No. 91.14 of the Customs Tariff. The matters were adjudicated by the Collector of Customs, Bangalore, who observed that the Watch case and the bracelet were two different commodities and were classifiable for the purposes of the Customs tariff separately. He held that the goods imported were not eligible for the concessional assessment under Customs Notification No. 65/87-Cus. He under his order-in-original da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... let was not a watch case for the purposes of exemption Notification No. 65/87-Cus. As regards the benefit of Notification No. 44/85-Cus., it was pleaded that the exemption provided therein was in favour of the components and was subject to the various conditions named in the said notification. These conditions were required to be met before the import. The list of the components were required to be certified by the DGTD. In these proceedings, the DGTD certificates obtained in respect of other notifications only refer to the watch cases and not to the watch cases with bracelet. The clarification by the DGTD was only for ITC purposes and not for any exemption under the provisions of the Customs Act, 1962. The learned JDR relied upon the Tribunal s decision in the case of M/s. Indo Swiss Time Ltd. v. CC, New Delhi, Final Order No. C/1945/97-B2, dated 20-8-1997 [1998 (98) E.L.T. 710 (Tribunal)] in Appeal No. C/48/91-B2. 6. In rejoinder, the learned Senior Advocate stated that in a way both the exemption notifications were unconditional as nothing further was required to be verified after the import. He referred to the Tribunal s decision in the case of Gujarat State Fertilizers Co. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h bracelet is a device for fastening watches to the wrist. It may be of any material, for example, precious metal, leather, plastic or textile material. The bracelets could also be decorative in character. The bracelets involved in these proceedings were for expensive watches. The watch case attached with bracelet could be called watch case with bracelet or bracelet with watch case. For expensive watches, the image of the watch rests on the bracelet also. When the appellants imported watch cases with bracelets, they did not import watch case only and the goods imported were more than the watch case. For the purpose of claiming exemption from Customs duty, it could not be said that they were watch cases only. When no exemption was available to the bracelets, the benefit of exemption could not be extended in favour of the bracelets attached to the watch case. 10. The expression used in the Notification No. 44/85-Cus. and Notification No. 65/87-Cus. was the complete watch cases for quartz analog wrist watches. Complete watch case will mean the watch case with all its parts. The parts of the watch cases, according to the Harmonized Commodity Description and Coding System (HSN) Explan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly integrated with watch cases and even, and also held that, even if they are inseperably integrated with bracelet they have to be construed as different from watch cases. The Collector ought to have appreciated that in the present case the appellant have imported quartz analog watch cases relating 4 models viz., model No. 175, 176, 169 and 127, which are specifically set out on the back cover of the watches. These models of watches were shown to collector at the time of personal hearing for examination. In respect of these models the bracelets are specifically designed as an integral part of watch case and cannot be removed or interchangeably used with any other watch cases. The bracelet is specifically designed and is supplied as an integral part of watch case and as such the benefit of Notification No. 45/85 and 65/87 cannot be withdrawn. (c) The Collector ought to have appreciated that the watch cases relating to model No. 175, 176, 169 and 127 cannot be used if they are not integrated with the bracelet and no other bracelet can be used along with these watch cases. Therefore, if the bracelets which are specifically designed for the respective watch cases, and which are requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some small quantities of such watch cases to satisfy the consumer demand, which are the subject matter of the present appeal. (e) The Collector ought to have appreciated that once a bracelet is fitted to the watch case, it loses its identity. It is no longer considered a separate article. Once it is assembled with the watch case, it becomes just another part of the watch case and is known as watch case. As we have observed above, the exemption was only in favour of the complete watch case. There was no exemption in favour of bracelet. The bracelet imported were for expensive watches. The bracelets were in the nature of accessory. If the exemption is extended in favour of the bracelet integrated with the watch case, then it would amount to extending the area of exemption to unauthorised goods which is not permissible under law. In the case of Collector of Customs, Bombay v. Perfect Machine Tools Co. Pvt. Ltd., 1997 (96) E.L.T. 214 (S.C.), the Hon ble Supreme Court had held that an accessory when imported with machine was not eligible to exemption unless that accessory has expressly been included in the exemption notification. Paras 6 and 7 from that decision are extracted below ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... party s letter is self explanatory. In this connection it is stated that the complete quartz analog watch case is an assembly consisting of the following components: 1. Bezel 2. Back cover 3. Bezel ring 4. Mineral glass (crystal) 5. Gaskets 6. Movement holder 7. Case pipe/stem pipe 8. Spring bars/side bars 9. Crown 10. Bracelet if it forms an integral part of watch case. Yours faithfully, Sd/- (R.M. BALANI) ADDL. INDUSTRIAL ADVISER We have already referred to above that the parts of watch cases include the case body, pendant, dome, bezel, bottom, lugs, bar, claws, depending upon the type of watch. The bracelet is not a part of watch case. When bracelet is fixed to the watch case, it become something more than the watch case and something more than the bracelet. For the purposes of exemption from customs duty they could not be considered as a watch case. In their clarification dated 14-1-1988 issued from file No. CLE/5(249)/86, the DGTD had clarified that the attestation of the list for the purposes of Notification No. 44/85-Cus., dated 28-2-1985, as amended, was only from the essentiality angle and that the eligibility of components for assessment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strap. 6. The learned Advocate had referred to the case law in support of his plea that the classification under residuary entry should be resorted to only when it is not possible to classify the goods in any other specific heading. We find that in the scheme of the Tariff under Chapter 91, different specified products have been specifically included in various sub-headings upto 91.13 and the other clock or watch parts have been made classifiable under Heading No. 91.14. We consider that when the goods cannot be classified in any of the specified heading, it is inevitable that their classification under the residuary entry is considered. He had also submitted that under the interpretative rules 3-b, the goods should be classified on the basis of the essential character. According to him, the essential character in this integrated watch case and strap is given by the watch case. We consider that the interpretative rules will come into picture only when it is not possible to classify the goods in the expressed language of the relevant tariff entries. 7. He also submitted that the recommendation of the Chief Controller of Import and Export was binding on the Customs authorities. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o ambiguity in the description, there is no question of giving any expanded or restricted meaning; it had as was read out. As it refers to the complete watch cases, we do not consider a case integrated with the scrap was covered within this description." 14. At the time of the arguments before us, the learned senior Advocate appearing for the appellants made an alternative plea that in case it is held that the appellants were not eligible for the benefit of exemption Notification No. 65/87-Cus., then they should be held eligible for a larger benefit under Notification No. 43/85-Cus. The extent of benefit under Notification No. 43/85-Cus. was more than the benefit under Notification No. 65/87-Cus. We find that under show cause notice dated 30-6-1988 in Appeal No. C/96/89-B2 the allegation as contained in para 10 was that the watch cases with bracelets were not eligible for the concession under customs Notification No. 65/87-Cus. as claimed by the importers. The adjudicating authority had only discussed the applicability of the said Notification No. 65/87-Cus. Similarly, in Appeal No. C/1266/89-B2 the benefit of Notification No. 44/85-Cus., dated 28-2-1985 and Notification No. 65/8 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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