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TMI Blog1996 (1) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... alender with one of the calender rolls being operationally described as Swimming Roll. They were required to split up the consignment imported in 7 cases showing different value of the individual components and accessories. Following this declaration, the duty was collected on the main swimming roll and its accessories for Calender Stack of paper machine under Heading 89.31. But the other equipment including the Hydraulic System which is a part of the entire calendering machine as a separate unit under different heading at different rates of duties. As a consequence the Customs Duty was charged in excess on the consignment imported and cleared. The appellants filed a claim for refund to the Asstt. Collector of Custcms, Refund (Appraising Section) Madras for reclassification of the entire consignment under Heading 84.31 on the ground that the entire equipment imported in 7 cases constituted the machinery for making and/or finishing paper or paper boards falling under the aforesaid Heading. Therefore, it was wrong to have classified only the "Swimming Roll and the Accessories" to the calender stack under the Heading 84.31 and the other connected equipment necessary for the operation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to the Customs Tariff Act, 1975. 4. The Ld. Collector (Appeals) was wrong in his view that Note (4) to the aforesaid Section XVI had relevance to the determination of any of the points in dispute. 5. The Ld. Collector (Appeals) was wrong in his assumption that the imported machinery was in the nature of replacement of the existing calender stack. On the contrary the documentary evidence was placed before him to establish that it was not a replacement of existing calender stack but a complete renovation by scrapping existing machinery with 6-Roll Calendar by a more efficient and improved type of machinery with only 2-Roll Calender one of them being a swimming roll calender to be operated only by a hudraulic system specially designed for this purpose. 6. The Ld. Collector (Appeals) was also wrong in his assumption that hydraulic supply and control system and the rolls of the calender stack had been ordered to be supplied separately merely because the break-up value of the individual components for assembling are shown separately. On the contrary having regard to the manner in which the offer was made by the supplier and the acceptance communicated by the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c supply and control system is meant for providing required hydraulic pressure and lubrication for swimming roll. He emphasised that this function can be performed distinguishably and independently of swimming roll. Since it is a mechanical device having an independent function of its own swimming roll by itself is only a part of the paper making machine covered under Tariff Heading 84.31. In the circumstances, there is no case for re-classification and the original assessment under Heading 84.59(1) is an order. 9. Similarly electro-mechanical and oscillating draw assembly has been assessed under Heading 84.31 while the various spares were assessable under the appropriate tariff headings as they were not a part of compulsory supply. 10. Ld. Counsel also drew attention to quotation No. P 7247/80, dated 3-11-1980 and to the drawings and designs of the article filed by them and in particular to the description of the hydraulic system. 11. Ld. Counsel also drew attention to the order of the Tribunal in the case of Technological Centre - l989 (44) E.L.T. 116 paras 5 & 7 in support of his contention "that the term compulsory supply must relate to the functions intend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions inter alia the following about the hydraulic system :- "The pump (a) feeds the oil from the tank (b) through the pressure line (c) with temperature control (d) and filter (e) to the differential pressure regulator (f). According to a signal from the controlling line (g) the oil is distributed by the differential pressure regulator (f) to the pressurized compartment (h) to the oil collecting compartment (j) of the S-Roll. The oil pressure inside the S-Roll is indicated by the pressure gauging line (k) at the operators desh (1) through the return line (m) the oil flows back from the oil collecting compartment (j) to the tank (b)." This shows that the items imported together constitute the machinery required for the paper manufacturing plant and includes various parts and accessories required for re-building of the machine calender. 18. It is therefore, required to be seen as to how such parts are required to be classified under the Customs Tariff. In this connection it is observed that Section XVI Note 2 relates to 'parts of goods of a kind described in any of the headings of Chapters 84-85 and reads as follows : 2. Subject to Note 1 to this Section, Note 1 to Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... calenders and excludes the calender rolls falling under heading 84.16. therefore, the calender rolls themselves are ruled out of 84.31. Further the parts and accessories of the calendar rolls are also required to be classified under 84.16 along with the rolls in terms of clause (b) of Section Note 2 read with the explanatory notes for such parts. The appellants have succeeded in showing that the Hydraulic supply and control system is suitable for operating swimming roll and for circulating oil lubrication and the deptt. has not been able to show anything to the contrary. In their refund application, the importers have rightly stated that entire consignment is classifiable under one heading as all the parts put together will make one complete assembly for calenders and all the items mentioned in the suppliers invoice are the integral parts for rebuilding of the calenders and without them they will not be able to complete the replacement assembly. But their request for Heading 84.31 is not acceptable due to exclusion clause. Hence, reading the purchase order, the quotation, the invoice w.r.t. the catalogue, clause (b) of Section Note 2 would apply, and therefore, the entire consignme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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