RANGANATHAN, J. - (1.) ALL these appeals raise a common point and can be disposed of conveniently by the same judgment. The respondent in all these appeals is Bharat Heavy Electricals Limited (hereinafter referred to as 'the assessee').
(2.) THE assessee is a public sector company engaged in the manufacture of heavy electricai machinery. It imported various consignments of "pressure gauges" from abroad for its hardware unit for use in the manufacture of steam turbines. THEse pressure gauges were subjected to basic customs duty at the rate of 40 Per Cent under item No. 90.24 of the schedule to the Customs Tariff Act, 1975, which reads as under: JUDGEMENT_489_SUPP1_1993Html1.htm Subsequently, the assessee claimed a refund of the auxiliary duty paid on the ground that the item was chargeable to customs duty at 40 Per Cent only, without the levy of the auxiliary duty of 5 Per Cent . Ths claim was based on the t'erms of notification No. 35 / 79-CUS dated 15-2-79 read with notification No. 41/ 80CUS dated 25-3-80. This claim for refund was rejected by the Assistant Collector and the Appellate Collector. When the matter came up before the Tribunal, it was inclined to take view against the assessee but, as there was an earlier decision of the Tribunal to the contrary, decided to follow it and hold against the Department. The Tribunal, therefore, allowed the assessee's appeals. The department has preferred these appeals. The relevant portion of notification No. 35 / 79 may now be extracted, which reads thus: "Exemption to parts of any article falling under Chapters 82,84,85,86 and 87 and meant for initial set up or assembly of that article: In exercise of the powers conferred by subsection (1) Section 25 of the Customs Act, 1962 (52 of 1962) and in supersession of the notification of the Government of India in the Department of Revenue and Banking No. 350-Customs, dated the 2/08/1976, the Central Government being satisfied that it is necessary in the public interest so to do, hereby exempt parts of any article falling under the Headings Nos. 82.05(2), 84.01/02, 84.03, 84.04/05, 84.07, 84.08(1), 84.09, 84.10(1), 84.11(1), 84.11(4), 84.13, 84.14, 84.15(1), 84.16, 84.17(1), 84.18(1), 84.22, 84.23, 84.24(1), 84.25, 84.26, 84.28, 84.29, 84.30(2), 84.31, 84.32, 84.33, 83.34, 84.35, 84.36, 84.37(1), 84.38(1), 84.39, 84.40(1), 84.41(1), 84.42(1), 84.42(2), 84.43, 84.44, 84.45/48, 84.49, 84.56, 84.57, 84.59(2), 85.02, 85.11(1), 85.18/27(3), 85.18/27(7), 86.01/03, 87.0 1 (1) and 87.02(3) of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India and proved to the satisfaction of the Assistant Collector of Customs to be required for the purpose of the initial setting up of that article or for its assembly or manufacture as is in excess of the rate applicable to the said article when imported complete, subject to the following conditions, namely:- xxxxxxxxx If we analyse the notification the conditions of exemption will be seen to be as follows: (1) The exemption is given in respect of the duty on a part; (2) The part in question should be the part of an article; (3) The article must fall under one of the various headings Nos. set out; (4) The part must be imported into India; (5) It must be shown to the satisfaction of the authorities that the part is required for the purpose of the initial setting up of the article, its assembly or manufacture. If these conditions are fulfilled, no import duty will be levied on the part as is in excess of the duty that would have been leviable on the article, had it been imported in a complete shape. Here the assessee's case is that the pressure gauges imported by it are the parts of articles which admittedly fall under Heading No. 84.04/05 and are chargeable to a basic customs duty of 40 Per Cent . So' the parts cannot be charged to duty at a rate in excess of 40 Per Cent . On this, indeed, there is no dispute.
(3.) THERE is dispute however, regarding its claim for exemption from the levy of auxiliary duty. This claim is based on notification No. 41/ 80 which, to the extent relevant, reads as follows: "In exercise of the powers conferred by subsection (1) of Section 25 of the Customs Act, 1962 (52 of 1962), read with sub-section (4) of Section 4 of the Finance Act, 1980 (13 of 1980) ; and in supersession of the Notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 27- Customs, dated the 12/03/1980, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods which are partially or wholly exempt from the duty of Customs specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) by virtue of the Notifications of the Government of India in the Ministry of Finance or in the Department of Revenue and Banking, specified in the Schedule below from the whole of the Auxiliary Duty of Customs leviable on such goods under sub-section (1) of Section 4 of the ,said Finance Act." xxxxxxxxx S C H E D U L E xxxxxxxxx 198. No 35- Costomas dated the 15/02/1979. xxxxxxxxx (Emphasis added) Sri Gauri Shanker Murthy, learned counsel appearing for the department, raises two contentions: (i) Notification No. 35/79 only exempts articles which fall under Item Heading No. 84.04/05 and since the pressure gauges, the articles presently in question, have been assessed and are clearly assessable under item Heading No. 92.04, there is no question of the assessee getting any concession under Notification No. 35/79. In this connection our attention is drawn to the terms of Notes 1 (g) and (1) and 2 to Section XVI of the Schedule. (ii) The relief in respect of auxiliary duty under Notification No. 41/ 80 is available only where the goods in question are partially or wholly exempt from duty of customs by virtue of the notifications of the Government of India specified in the Schedule. In the present case the duty of customs leviable on the part taken by itself, under Item Heading No. 92.04, as well as the duty leviable on the article of which it forms a part, under item 84.04/ 05, are the same. Consequently, the pressure gauges have not become entitled to any exemption or concession by virtue of the Notification No. 35/79. The terms of Notification No. 41/ 80 are thus not fulfilled and the assessee is not entitled to the relief claimed. ;