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TMI Blog1979 (6) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... t from payment of so much of Customs Duty leviable thereon as was in excess of the rate applicable to the said machinery when imported complete. One of the conditions requisite for the applicability of the said notification was that the Development Wing of the Ministry of Commerce and Industry should certify in each case that the component parts in question were or would be required for the purpose specified therein and should recommend grant of exemption. The importer was also required to execute a bond in the form prescribed binding himself to pay on demand in respect of such component parts as were not proved to the satisfaction of the Collector of Customs to have been used for the purpose for which the exemption was granted. The purpose for which the exemption was granted was to encourage indigenous manufacture of machinery by importing only a few components not available within the country. 3. During the period 1964 to 1968, the petitioners imported component parts of internal combustion engines of the total value of Rs. 39,13,400.98 P. for manufacture of diesel engines after the Directorate General of Technical Development issued to the petitioners development wing certifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the Collector of Customs, Bombay, after the payment of duty as required by Assistant Collector of Customs. The stand taken by the petitioner before the Assistant Collector and before the Appellate Authority was that the engine components imported by the petitioners for assemblage of Internal Combustion Engines are eligible for grant of duty exemption under the Notification 82/60 and the duty exemption has been correctly granted by classifying completely assembled diesel engines under Item 72 (a) of the Indian Tariff Code. The petitioners contended that the distinction between -stationary type and vehicular type of diesel engines for the purpose of grant of exemption under the notification was outside the scope of notification and the classification made was incorrect and bad in law. The Appellate Authority by its order dated 22nd November, 1972, dismissed the appeal holding that even if there is a case in law for the petitioners as contended by them still there is long standing practice of assessment of vehicular type of diesel engine under items 75(10)(1) of the Indian Tariff Code. The Appellate Authority also relied upon the statement made by the petitioners in the bills of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... falls under tariff entry No. 75. The return did not specifically state as to which sub-item of Item 75 would attract to the facts of the present case. At the time of arguments the learned Counsel for the respondents submitted that all the three sub-items namely sub-items 75 (10), (11) and (12) would be applicable to the facts of the present case. 7. In view of these rival contentions it is necessary to determine whether the petitioners are entitled to exemption under Notification 82/60 as the diesel engine even though fitted on dumpers fall within the tariff entry No. 72 (a) or whether it falls under Tariff Entries No. 75(1) to 75(12). 8. The principles as to the jurisdiction of this Court while exercising power under Article 226 of the Constitution of India to decide the dispute of this nature is now well settled. It is the primary function of the Officer who are entrusted with the duty to determine the classification of entries in the taxing statute. Interference by Court is called for when findings are patently erroneous or conclusions unreasonable or where the decision is given on the basis of erroneous construction of entry or on the basis of irrelevant facts and consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) the petitioners are entitled to the advantage of Notification No. 82/60. 10. In answer to this claim, it is the contention of the department that diesel engines fitted on a dumper are of vehicular type and would not attract tariff entry 72 (a) but it would attract tariff entries No. 75(10) to 75(12). The department contents that the entry 72 falls within Section XVI, the heading of which is "Machinery and Apparatus; Electrical Material" while of entry 74 onwards falls under Section XVII of the First Schedule, the heading which is "Transport Material". It must be said in fairness to Mr. Dhanuka, the learned Counsel appearing for the respondents that he did not insist that entry 72 (a) is not applicable merely by reference to the heading of Section XVI, of the First Schedule of the Indian Tariff Code. According to Mr. Dhanuka the diesel engine ceases to be a machinery as soon as it is used as prime movers of the dumpers and would attract entries under Section XVII, which refers Transport Material. According to the learned Counsel appearing for the department, the entries under Section XVII refers to all transport materials and which covers all kinds of vehicles and the components ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied under this entry, submits Mr. Dhanuka, the contentions of the petitioner that the diesel engines would fall within the tariff entry 72 (a) is erroneous. In answer to these submissions, Mr. Bhatt, the learned Counsel appearing on behalf of the petitioner contended that the construction put by the Revisional Authorities on this entry is wholly incorrect, as proviso to entry No. 75(13) has been clearly overlooked. As strong reliance is placed by the learned Counsel for the petitioner on this proviso, it is necessary to set out in detail entry 75 (13) which reads as under :- "Parts of mechanically propelled vehicles and accessories, not otherwise specified: Provided that where any articles referred to in Items Nos. 75 (12) and 75(13) are also ordinarily used otherwise than as parts and accessories of motor vehicles, they shall be dutiable at the rates of duty specified for such article." The proviso states that where any articles referred to in Items Nos. 75(12) and 75(13) are also ordinarily used otherwise than as parts and accessories of motor vehicles, they shall be dutiable at the rates of duty specified for such articles. Relying upon this proviso, it was urged on behal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view taken by the Statutory Authorities is not perverse and it is one of the reasonable view and therefore, I should not exercise my discretionary jurisdiction under article 226 and quash the orders passed by the Authorities below. In my judgment the view taken by the Authorities below is entirely erroneous. The principles laid down by the Supreme Court are clearly applicable and it is necessary to interfere while exercising jurisdiction under article 226 of the Constitution of India. In my judgment the decisions of the Authorities below is based on erroneous construction of the concerned entry and as such it is necessary to set the things right in this petition. 14. Though in this petition the contention was raised that the dumpers are not motor vehicles, the same has been given up by the learned Counsel of the petitioner in view of the decision of the Supreme Court, in Bolani Ores Ltd. Ors. v. State of Orissa Ors. reported in AIR 1975, S.C. 17, and also in view of the decision of Hon'ble Mr. Justice B. N. Deshmukh (as he then was) in Misc. Petition No. 630/69 (with Misc. Petition Nos. 631 to 635/69 and 668/69), decided on 15th March, 1976. 15. In the result, the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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