TMI Blog1982 (6) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... al were rejected by the lower authorities on the following grounds :- (1) Outboard motors are different from marine engines inasmuch as marine engines are of high H.P. whereas outboard motors are of small H.P. (2) Generally, marine engines are diesel engines whereas outboard motors are petrol engines. (3) Outboard motors are meant for fitment on small boats which are used for sports or pleasure purposes and these are two-stroke engines. On the other hand, marine engines are 4 stroke engines and these are installed on ships permanently whereas the outboard motors are detachable. (4) There is a separate notification No. 181-Customs of 1979 for outboard motors which exempts outboard motors of capacity of 7.5 H.P. and above when importe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hange speed gears may also be fitted. The heading includes "outboard motors" for the propulsion of small boats in the form of a unit comprising an engine, shaft, propeller and a rudder". The heading includes "outboard". Relying on this Explanatory Note, they contend that outboard motors fall under the category of "engine". As regards the Notification No. 181-Customs of 79, the petitioners contend that Notification No. 281-Customs of 1976 ought to be interpreted independently without any reference to, or aid of, another notification. They have pointed out that the marine engines operate either on 4-stroke or 2 stroke, and 2 stroke engines take several forms and therefore 2-stroke outboard motors would not fall outside the purview of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marine engines used as the main propulsion units are of 2-stroke design. Also, the size of marine craft should not stand in the way in defining an engine for marine propulsion purposes. The Government are also of the view that the argument of the lower authorities that generally marine engines are diesel engines whereas outboard motors are petrol engines is not sustainable, inasmuch as steam turbine, gas turbine, and nuclear-powered engines also constitute marine propulsion units. As such, the term marine engines could not be restricted to diesel engines, finally, although it is true that outboard motor system is a concept of a compact propulsion unit, nevertheless, it discharges the same function as any other marine engine. 4. The lower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld qualify for exemption available to marine engines. Government observe that in rejecting this plea of the petitioners the lower authorities have apparently overlooked the interpretative Note (3) in Section XVI pertaining to Chapter 84 of the Customs Tariff Act, 1975, which reads as under :- "(3) Unless the Headings otherwise require, composite machines consisting of two or more machines fitted together to form a whole and other machines adapted for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function." 5. Since the principal function of an outboard motor is that of an engine, Government co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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