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TMI Blog2005 (12) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... 027.80 of the Customs Tariff Act and the software under 8524.99. Revenue classified the goods under CTH 9031.80 along with the software under the same heading. The respondent cleared the goods on payment of duty under protest. Subsequently, they filed refund claim on the ground that the goods are appropriately classifiable as measuring or checking instrument under CTH 9027.80 and the software would be covered under CTH 8524.99. The Deputy Commissioner held that the system apart from checking the porosity of the tyre has got various other features like line separations, belt edge, ply, under cure, inconsistent rubber mix, zipper side wall, etc., and hence, it was classifiable under 9031.80. Therefore, he rejected the refund claim. Further, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s software is installed. Hence, adding the value of the software to the assessable value of the appliance applies to be correct. In addition, Sl. No. 261 of Customs Notification 16/2000 provides duty exemption to information technology software falling under Chapter Heading 49 or 85.24 only. By no stretch of imagination it appears that the software supplied along with K2 system falls under the heading of information technology. (iv) In the Order-in-Appeal there is no reference to unjust enrichment aspect. 3. Shri K.S. Reddy, learned JDR appeared for the revenue and Shri Shivadass, learned Advocate appeared for the Respondent. 4. The learned JDR referred to the technical literature and said that the system imported is useful for che ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imported item has extra features it cannot come out of the purview of 90.27, so long as the same is used for checking porosity. (ii) The imported item is mainly used by the Respondent for checking the porosity. When there is a specific heading for apparatus for checking porosity, there is no need to go to classification 90.31, which is a residuary item. (iii) Referring to the HSN Explanatory Note Sl. No. 27 under heading 90.31, the learned advocate contended that the instruments referred therein are mainly used to detect the defects in machinery parts such as bars, tubes, profiles, machined articles such as screws, needles, etc. He further stated that there is no cathode-ray screen in the system imported. Therefore, he said the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o capital goods, as held by the Hon'ble High Court of Madras in the case of CC Others v. The Indo-Swiss Synthetic Gem Manufacturing Company Ltd. 2003 (162) E.L.T. 121 (Mad.). The above decision of the High Court has been followed by the Tribunal in the case of Grasim Industries. v. CCE reported in 2003 (157) E.L.T. 123 (T.) = 2003 (57) RLT 791. The decision of the Apex Court in the case of Union of India v. Solar Pesticide Pvt. Ltd. reported in 2000 (116) E.L.T. 401 (S.C.) is applicable only to captively consumed goods and consequently, the decision of the Madras High Court still holds the filed and cannot be considered as over ruled by the decision of the Apex Court. 6. We have gone through the records of the case carefully. The techni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... technical literature, it can be called as an apparatus for checking porosity. The presence of additional features cannot exclude the item from the purview of Heading 90.27. In our view Sl. No. 27 under 90.31 would be applicable to machine parts and not to retreaded tyres. Hence, the decision of the Commissioner (Appeals) appears to be correct. As far as the software is concerned, the same is classifiable under Chapter Heading 85.24 and is exempted in terms of Sl. No. 261 of Notification No. 17/2001-Cus., 1-3-2001 as amended. As regards unjust enrichment following the ratio of decision of Madras High Court cited by the learned Advocate, we hold that unjust enrichment would not be applicable to the case of Capital goods imported for manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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