TMI Blog1984 (4) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for refund claiming re-classification under Heading 84.38(1). The Asstt. Collector of Customs, Bombay by orders dated 16-10-1980 and 21-10-1980 held that the knitting machines were domestic machines and he rejected the claim for refund. In appeal, the Collector of Customs (Appeals), Bombay by order dated 16-4-1981, held that the knitting machine was industrial machine falling under Heading 84.37(1) and the correct classification of its parts would be Heading 84.38(1). With these findings he allowed the appeal. 3. The Government of India, then issued Show Cause Notice dated 21-10-1981, proposing to review the Order-in-Appeal passed by the Collector of Customs (Appeals), Bombay in exercise of powers vested in Government of India under Section 131(3) of the Customs Act, 1962. For the purpose it relied on the manufacturers leaflet in which machine was shown as being for household use. It was also stated that machine which is essentially domestic, remains domestic even if it found application in cottage industry. Another ground was that machines used in industry are all power operated and require over horse power, which was not satisfied in the case of the machine. In foreign cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustomer. 7. When the matter was heard, the respondents also filed an affidavit by one Shri Luxman Subramaniam, Manager of the Respondents affirming that the parts imported were not interchangeable for use in the manufacture of any other models of knitting machines made and marketed by the respondent. Another affidavit of Rajindra Kumar, Mg. Director regarding use of parts in DX 2000 and correspondence between Asstt. Collector and the respondent was also filed. They also filed the communication between the Asstt. Collector of Customs and respondents and certificate of the Textile Commissioner, Bombay. All these documents where necessary would be specifically referred to later. 8. It may be mentioned that the Show Cause Notice issued by the Govt. of India incidentally referred to other models of the respondents like DX 4000 and Bulky Eight 5001. The material on record, however, shows that the machine considered by the Asstt. Collector of Customs and the Collector of Customs (Appeals), related only to Model DX 2000. Our findings in these appeals are limited only to Model DX 2000. On this point, there was no dispute even by the appellants (Department). 9. At the hearing of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Collector of Customs (Appeal) on the basis of cost, performance and output of the machine. He compared the specification and performance of the model with respondents model DX 4000 and Bulky Eight 5001 and submitted that when the respondents admitted that model DX 4000 and Bulky Eight 5001 were admittedly domestic it was ridiculous to say that on the comparison of specification and performance model DX 2000 would not be domestic. He relied on catalogue and the description given therein. The catalogue shows that DX 2000 is an income earner of the family, an interesting and paying hobby. He compared the cost of the model with other models. He challenged the certificate given by the Textile Commissioner and submitted that even on the respondents admission about Model DX 4000 and Bulky Eight 5001, the certificate was shown to be defective and was therefore inadmissible in evidence. He in particular by giving example of Charkha and Amber Charkha argued that merely because these were used in cottage industries they would not become industrial machines or appliances. He compared the model with circular knitting machines industrial type and submitted that the model is not industrial machin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated as if it s principal purpose were its sole purpose. The appellant had not discharged the burden so as to come to a contrary finding to what the Collector of Customs (A) has set out in his order. For the purpose he relied on a CEGAT decision in Mysore Industrial Plastic Corporation v. Collector of Customs, 1983 E.L.T. 845 and the Bombay High Court decision in the case of M/s. Garware Nylons, 1980 E.L.T. 249 (Bombay). He further submitted that the Supreme Court decision in Dunlop case has no relevance as both the sub-headings are equally specific as one covers what is excluded by the other. 11. The show cause notice alleged that horse power of the machine is 1/4 horse power which is applicable to- domestic machine. During course of arguments, Shri V.M.K. Nair, who was earlier arguing the appeal conceded that in C.T.A. 1975, horse power as a criterian for the purpose has been given up. We do not therefore deal with this aspect. 12. The Collector (Appeal) held that the machine was not domestic but industrial on the basis of its being used in Cottage Industry in Ludhiana, meaning of domestic and cost, performance and production of the machine. He held that in absence of de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncluding whether it is industrial or domestic. On this test many things which are admittedly domestic may not qualify for being so-called. A good camera costing nearly ₹ 2,500, a V.C.R. costing nearly ₹ 15,000, a cow costing nearly ₹ 3,000, a she buffalow costing nearly ₹ 5,000 (whose milk yield is more than the requirement of the family) would cease to be domestic. Purchaser of anything domestic does not calculate like a trader its cost, depreciation and production. A domestic machine may be purchased even for its occasional use and utility, its cost and overall production notwithstanding. Its domestic nature should be judged on the class and status of the purchaser. 14. Before we deal with other evidence in the case. We may first deal with a certificate dated 4-4-1979, issued to the appellants by Assistant Director in the office of Textile Commissioner, Bombay. This certificate says that appellants Model DX 2000, DX 3000, DX 4000 are used in medium, small scale industries/cottage industries and are of industrial type. This certificate is not relied on by the Collector in his order. Assistant Collector did not accept this certificate. The Certificate is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice (para 14) it would appear that the machine or a similar machine would be domestic in Europe because average needs of the family there are much higher, society is affluent and cold season lasts for longer period in the year. They have urged that in the context of Indian conditions it could not be called domestic. This argument is not acceptable. At best due to difference in economic conditions fewer people may possess the machine, but the machine would still remain domestic. Now in the face of this admission that in the continental context it would be domestic machine, very strong and clear evidence would be necessary to hold that what is a domestic machine in the continent is in the Indian conditions not so. In the following paras we would show such evidence is lacking in the case. 18. During course of arguments Shri Narasimhan learned Advocate for the respondent argued that the present inquiry cannot travel outside the grounds set out in the show cause notice. We have not been able to appreciate this contention. The show cause notice already said that the machine was domestic. The discussion, arguments, evidence and reasons are only to determine whether it is domestic o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el or the model itself. Again the contention is without any evidence. All this takes us nowhere. As to whether a machine being used in cottage industry ceases to be domestic, we would deal with later. 22. Dealing with the purchase orders and certificates filed by the respondents, they have filed two purchase orders dated 30-9-1981 (not 31) from M/s. Canteen Stores Department for 10 numbers of Model DX 2000 and from UNICEF, New Delhi dated 24-3-1981 for 20 pieces of the same. These orders are not in the least helpful for deciding whether the machine is domestic or otherwise. They only show that the two establishments purchased these machines. But for what purpose the machines were used cannot be ascertained from these orders. All the five certificates are dated 7-8-1982. The first from Anand Women Rehabilitation Society, Delhi, says that the machines are used for by the Association for providing self-employment to the economically weaker section of the population for supplementing the family income. The certificate from Samuday Bhavan in Hindi is to the same effect. It says that with the machine women for themselves and their family can earn their livelihood. M/s. Sawhney Wool s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
