V RAMASWAMI,J. - (1.) THE appellants are manufacturers of footwear. THEy imported sometime in October 1970 the machinery described as'Desm a Fully Automatic High Pressure Footwear Injection Moulding Machine'and cleared the same on payment of customs duty, Customs duty was assessed under tariff Item 72 (b ). THEy then filed an application to refund contending that the machinery imported is one that would fall under Tariff Item 72 (15) and it has been wrongly assessed and duty has been collected under item 72 (b ). Item 72 (b)reads as follows:- " machinery , namely, such of the following articles are not otherwise specified - (a ). . . . (b) machines and sets of machines to be worked by electric, steam, water or other power, not being manual or animal labour , or which before being brought into use require to be fixed with reference to other moving parts;' THE standard rate of duty was 40 per centad valoremunder item 72 (b); Item 72 (15) reads as follows:- "boot and show manufacturing machinery" THE standard rate of duty was 10 per centad valoremunder item 72 (15 ). THE appellants made this claim on 20-4-1971. In the meanwhile, the Government of India issued Customs notification No. 2 of 1971, dated 16-1-1971 which reads as follows -" * In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts plastic injection moulding machine, used in the manufacture of footwear, from so much of that portion of the duty of Customs leviable thereon, on its importation into India, which is specified in the first Schedule to the Indian Tariff Act 1934, (32 of 1934) as is in excess of duty leviable on goods falling under item 27 (15) of the said first Schedule ". THE Assistant Collector of Customs, in his proceedings dated 23-4-1971, rejected the claim for refund on the ground that the machinery has been correctly assessed under Tariff item 72 (b) for the reason that -" * . . . . these machines not designed exclusively for manufacture of boot and shoe but a variety of other foot-wear like sandals, chappals etc. THE notification No. 2/71 referred to by the claimants takes effect from 16-1-1971 only whereas the subject goods were imported in October 1970. "on appeal, the Appellate Collector of Customs, by his order dated 29-3-1972, held that the machinery imported is boot and shoe making machinery, that how that Assistant Collector came to the conclusion that the machine can make chappals , sandals, etc. , is not clear and that the words'boot'and'shoe'are of general description and merely by the fact that the machine which is designed for the manufacture of boots and shoes could also make chappals , it cannot be a ground for taking it out from item 72 (15 ). In that view he allowed the appeal and ordered the refund.
(2.) SOMETIMES in 1973, the government of India considered that this view of the Appellate authority requires reconsideration and accordingly initiated suo motu proceedings under Section 131 (3) of the Customs act, 1962. After issuing notice, the Government of India ultimately held that unless the machinery is'exclusively useable only for making boot and shoe, it cannot be brought under item 72 (15) and that shows'boot'will not include'chappals'and since the machinery can make chappals also it will fall only under Item 72 (b ). In that view, the order of the Appellate Collector was set aside and that of the assistant Collector was restored. The appellant filed W. P. 5714 of 1976 before this court. The learned single Judge who heard the petition was of the view that in order to bring the item under Item 72 (15) it is not necessary that the machinery should be exclusively used for making shoe and boot. He referred to the catalogue issued by the machinery manufacturer and, noting that the machinery can be used for materials other than leather, held that the order of the Central Government required reconsideration and in that view, set aside the order of the Central Government, and remanded the matter for fresh consideration. In the remanded proceedings, the Government was of the view that the plastic moulding machine which worked on plastic are in the nature of machine tools and therefore, would normally be assessable under item 72 (b) and hence the goods were correctly assessed under Item 72 (b ). The appellants again invoked the jurisdiction of this court under Act. 226 and filed W. P. 1404 of 1979. The matter was considered again before the same learned Judge, who decided the case on the earlier occasion. After referring to the earlier proceedings, the learned Judge held that inasmuch as it has been factually held that the machinery imported by the appallants is not intended exclusively to manufacture boot and shoe, the interpretation made by the department could not be held to be wrong and that Item 72 (15) would cover only those machineries which are exclusively designed for the manufacture of boots and shoes. We think that the learned judge seems to have taken a different view from what he held on the earlier occasion when he remanded the matter. As already stated in W. P. 5714 of 1976 he proceeded in the view that the department should not be guided by the singular fact of capability of the machinery imported by petitioner producing chappals and in fact he held-" * This reasoning i. e. , the machinery is capable of making chappals and therefore, cannot fall under item 72 (15) in my view is wholly unacceptable. Boot and shoe making machinery stated under item 72 (15) is descriptive in nature. Merely because sandals or chappals are also capable of being made it does not cease to fall under that item. "be that as it may, ultimately, the learned Judge refused to interfere with the order and dismissed the writ petition. It is against this order the present writ appeal has been filed. For more than one reason, we are of the view that the impugned order of the Government of India could not be sustained. Firstly, item 72 (b) is a general item of machinery whereas item 72 (15) is a specific item and, therefore, if the machinery would come both under item 72 (15) and item 72 (b), item 72 (15) alone could be applied and not the other general item. Secondly, it is the admitted case that the machinery is intended and could be utilised for making boot and shoe and the fact that it can also make chappals , even if true, which is denied in this case, will not take the machinery from that under item 72 (15 ). It may be mentioned that item 72 (15) does not say machinery'exclusively'used for making boot and shoe. Thirdly, the item as it stood originally in the relevant time, did not make any difference between machines which are designed to use hides, skins and leather and those that can also materials other than leather. However, in the present Customs Tariff Act 1975, under Heading No. 84. 42, machinery which can use only hides, skins and leather are brought under that entry. This specific distinction not having been made earlier, the entry could not be interpreted in a restricted way as those machineries, which can use hides, skins or leather alone, are covered by that entry. In fact, there is also a dispute as to whether this machinery can make chappals at all. The Appellate Collector rightly pointed out that the department had no material to show that the machinery can make chappals as well. Item 3 in the catalogue, which was relied on by the Department in this case, could not in our opinion be considered as a chappal. This is described by the learned Counsel as'punjabi chappals'. We are not quite sure what this'punjabi chappals' is. We find from the figure that the front portion of the foot is covered as in a shoe and the back portion also is covered with a be. L. T. and , in between, the small portion does not have any top leather. Certainly, this cannot come under the description of chappal ; whether it comes under the definition of boot or shoe. In any case, there is not much of evidence to show what other things the machinery can do. Fourthly, we also have the fact that immediately after the import, in Customs Notification No. 2 of 1971, the Government of India have clarified this position by the Notification and brought machineries of this type under the item 72 (15) specifically. This Notification may be taken as a clarification of the existing entry and not as giving a special concession for the first time with effect from January 1971. It may also be mentioned that, as held by the Supreme Court ina. C. Industriesv. State of A. P; 1987 AIR (SC) 1418, the deciding factor in all such cases is the predominant or ordinary purpose or use, and it is not enough to show that the machinery can be put to other use also, and it is its general or predominant user which determines the category in which the machinery will fall. If we apply this test laid down by the Supreme Court, there can be no doubt that it would fall under item 72 (15) and not under any other entry. We may also usefully note the rules for the interpretation of the Schedule given by the central Government which is part of the First Schedule to the Customs Tariff act, 1975. Rule 3 states -" * When for any reason goods areprim a facie, classifiable under two or more headings, classification shall be effected as follows - (a) The headings which provide the most specific description shall be preferred to Headings providing a more general description. (b) Mixtures and composite goods which consist of different materials or are made up of different components and which cannot be classified by reference to (a) shall be classified as if they consisted of the material or component which gives the goods their essential character, in so far as this criterion is applicable. (c) When goods cannot be classified by reference to (a)or (b), they shall be classified under the Heading which occurs latest among those which equally merit consideration.' If we apply the first rule of interpretation, even it if comes under item 72 (2), it will have to be assessed under item 72 (15 ). Finally, though it may not be pertinent for the interpretation of the article, we may also mention thebona fidenature of the import of the machinery as a relevant consideration in this case. It is not the case of the department that the appellants had imported the machinery for making anything other than boot or shoe. It is not the case of a person camouflaging or under the guise of importing a particular machinery, imported machinery for a different purpose. Obviously, this is a case ofbona fideimport for the purpose of making boot and shoe by a manufacturer of footwear. For the foregoing reasons, we are of the view that the impugned order of the Government is not sustainable and, accordingly we allow this writ appeal and set aside the order of the central Government. The rulenisiis made absolute. There will be no order as to costs.;