Civil Appeal No 335 of 1987
From the order dated l0121986 of the Customs Excise and Gold Control Appellate Tribunal New Delhi in Appeal No Cl080 86 B 2OrderNo 128486 B 2
SK Dholakia RC Bhatia PC Kapur and SK Beri for the Appellant
G Ramaswamy Additional Solicitor General B Parthasarthy and Mrs section Suri for the Respondents
The judgement of the court was delivered by DUTT J
The only question that is involved in this appeal preferred under section 130E of the  is whether the appellant is entitled to the benefit of the Notification No 281 Cus76 granting part exemption from payment of Customs duty in respect of the rod bushes and camshaft bushes imported by the appellant
Before we refer to the said Notification we may notice the provisions of the Heading No 8406 and Heading No 8463 of the  which are as follows Heading Sub heading No and Rate of duty Central No description of article aStandard Excise bPreferen Tariff tial areas Item 8406 International combustion a100 29 piston engines
8463 Transmission shafts a 60 cranks bearing housings plan shaft bearings gears and gearing including friction gears and gear boxes and other variable speed gears flywheels pulleys and pulley blocks clutches and shaft couplings
223 The said Notification No 281 Cus dated 28 1976 as amended A from time to time reads as follows Notfn
No 281Cus
The articles specified in column2 of the Table hereto annexed and falling under Heading No 8406 are exempt from so much of that portion of the duty of Customs leviable thereon which is specified in the First Schedule to the  as is in excess of the rate specified in the corresponding entry in column 3 of the said Table
THE TABLE Description of article Rate of duty 2 3 Stationary or industrial internal combus 40 percent
tion piston engines and parts thereof ad valorem
excluding those which are inter changeable for use with motor vehicle other than those specified against section No 2 International combustion piston engines 40 per cent
for industrial and agricultural tractors ad valorem
and power tillers and parts thereof excluding those which are inter changeable for use with other motor vehicles Marine engines and parts thereof excluding 40 per cent
those which are inter changeable for use ad valorem
with motor vehicles other than those specified against Sl
No 2
International combustion piston engines 3 per cent
designed for use in aeroplanes and parts ad valorem of such engines
International combustion piston engines 40 per cent
for locomotives and parts thereof excluding ad valorem
those which are inter changeable for use with motor vehicles other than those specified against Sl
No 2
 224 The Assistant Collector and the Collector of Customs Judicial overruled the contention of the appellant that the appellant was entitled to the benefit of exemption under the Notification No 281Cus76
The Customs Excise and Gold Control Appellant Tribunal hereinafter referred to as the Appellate Tribunal  dismissed the appeal of the appellant and affirmed the orders of the Customs authorities
According to the Appellate Tribunal the bushings and the bearings are the same and as the bearings come under the Heading No 8463 and not under Heading No 8406 they are not entitled to the benefit of exemption under the said Notification
Hence this appeal under section 130 E of the 
The Notification grants exemption in part from payment of the Customs duty in respect of articles specified in column 2 of the Table and falling under Heading No 8406
Heading No 8406 refers to internal combustion piston engines  Paragraph 2 of column 2 of the Table annexed to the Notification which is relevant for our purpose not only refers to internal combustion piston engines but also to parts thereof 
Heading No 8406 does not however contain or refer to the Parts of internal combustion piston engines It is submitted by the learned Additional Solicitor General that as Heading No 8406 does not refer to the parts of internal combustion piston engines the appellant is not entitled to claim any exemption for the bushes even if they are parts of such engines
Secondly it is contended by him that even assuming that Heading No 8406 also contemplates parts of the engine such parts must be all the parts of the engine and not a few parts thereof In other words his contention is that Heading No 8406 will apply when an internal combustion piston engine in imported in a knocked down condition
Lastly it is contended that bushes and bearings are the same and indentical articles as held by the Appellate Tribunal and as bearings have been provided for under Heading No 8463 the question of any exemption under the Notification does not arise
It is also submitted by the learned Additional Solicitor General that even assuming that the bushes and bearings are not identical articles but they are distinct and separate yet there is no material for holding that the bushes which have been imported by the appellant are parts of the engines referred to in Heading No 8406
The Notification provides that the articles specified in column 2 of the Table and falling under Heading No 8406 are exempt from payment of a certain portion of the customs duty
Paragraph 2 of 225 column 2 of the Table not only mentions internal combustion piston engines undoubtedly forming the only subject matter of Heading No 8406 but it also mentions the parts thereof  that is to say parts of such engines
Heading No 84 06 does not refer to parts  of such engines
Non mention of parts  in Heading No 8406 has given rise to a controversy between the parties
It may be that the Notification has been inartistically drafted
It is however clear that the Notification not only intends to grant exemption to internal combustion piston engines but also to parts thereof 
When therefore the intention is clear and manifest it will be unreasonable to take a narrow view of the Notification and not to extend its benefit to the parts of the engines referred to in Heading No 8406
To accept the contention made on behalf of the respondents that as Heading No 84 06 does not mention the parts  the Notification is inapplicable to the parts will be to amend the Notification which the court will not do
In our opinion therefore the Notification will apply to parts of the engines mentioned under Heading No 8406
We are unable to accept the contention of the respondents that the parts  referred to in paragraph 2 of column 2 of the Table must be all the parts of the engines or engine in question and not a few parts thereof
Paragraph 2 of column 2 does not provide that it must be all the parts of the engine or engines
It simply provides parts thereof 
In the absence of any clear and unambiguous provision that exemption will be granted in respect of parts of the engines which must be all the parts constituting the engine or engines we are not inclined to restrict the scope of the Notification
Accordingly we hold that parts referred to in paragraph 2 of column 2 of the Table may be all the parts or any of some of the parts of the engine or engines in question
A mention of internal combustion piston engines under Heading No 8406 not only contemplates the engine or engines but also the parts thereof
So although the parts are not mentioned under Heading No 8406 by necessary implication and in the context of the Notification it includes the parts of the engine
We are therefore of the view that parts of the engine or engines mentioned under Heading No 8406 will get the benefit of exemption under the Notification
It has been held by the Appellate Tribunal and it is also the contention of the learned Additional Solicitor General that bushings and bearings are identical articles
It seems that the appellate Tribunal was influenced by the fact that the functions of the bushings and bearings are the same
It may be that two articles have the same functions but nonetheless they are distinct and separate
As the functions of 226 bushings are the same as that of the bearings sometimes bushings are also called bearings as pointed out by the Appellate Tribunal
But when these two articles are known in the market by two different names it is difficult to uphold the contention that they are same and identical even though they perform the same functions
We therefore do not agree with the finding of the Appellate Tribunal and the R Customs authorities that bushings and bearings are same and identical
In view of our finding that the Notification exempts also parts of the engines mentioned in paragraph 2 of column 2 of the Table in order to avail of the benefit of the exemption granted by the Notification it has to be proved that the parts in respect of which the exemption is claimed are parts of the internal combustion piston engine as mentioned under Heading No 8463
Some of such parts may have been included under Heading No 8463
In other words as soon as it is proved that the parts are of the engines mentioned in heading No 8406 such parts will get the benefit of exemption as provided by the Notification irrespective of the fact that they or any or some of them have already been included under Heading No 8406 or under any other Heading
Therefore even if bushings are the same as bearings still they would come within the purview of the Notification provided they are parts of the engines mentioned under Heading No 8406
The contention of the Customs authorities that the article which is provided under another Heading other than Heading No 8406 will not get the exemption as provided in the Notification is not readily understandable
When the Notification grants exemption to the parts of the engines as mentioned under Heading No 8406 we find no reason to exclude any of such parts simply because it is included under another Heading
The intention of the Notification is clear enough to provide that the parts of the engines mentioned under Heading No 8406 will get the exemption under the Notification and in the absence of any provision to the contrary we are unable to hold that the parts of the engines which are included under a Heading other than Heading No 8406 are excluded from the benefit of the Notification
In the instant case there is no material or evidence nor is there any finding of the Appellate Tribunal or the Customs authorities that the bushes which have been imported by the appellant are parts of internal combustion piston engines falling under Heading No 8406
In the circumstances it is necessary that the Customs authorities should embark upon the question and decide whether the bushes imported by the appellant are really parts of such engines
227 For the reasons aforesaid we set aside the order of the Appellate A Tribunal and of the Customs authorities and send the case back to the Collector of Customs with a direction to decide after giving an opportunity to the appellant whether the bushes imported by the appellant are parts of the internal combustion piston engines as mentioned under Heading No 8406
The appeal is allowed but in view of the facts and circumstances of the case there will be no order as to costs
PSS Appeal allowed


Summary:
Heading No 8406 of the prescribed 100 duty on internal combustion piston engines while Heading No 8463 laid down 60 duty on transmission shafts cranks bearing housings plan shaft bearing etc
The Notification No 281 Cus76 dated 2nd August 1976 as amended from time to time exempted the articles specified in column 2 of the table thereto and falling under Heading No 8406 from payment of duty in excess of 40 ad valorem
Internal combustion piston engines and parts thereof were one such article
The appellant sought part exemption from payment of customs duty in respect of rod bushes and camshaft bushes imported by it in terms of the Notification
The Assistant Collector and the Collector of Customs Judicial found that he was not entitled to the benefit of exemption under the said Notification
The Appellate Tribunal affirmed the orders of the Customs authorities being of the view that the bushes and bearings were the same and as the bearings come under the Heading No 8463 and not under Heading No 8406 they were not entitled to the benefit of exemption
In this appeal under section 130E of the it was contended for the respondent that as Heading No 8406 does not refer to the parts of internal combustion piston engines the appellant was not entitled to claim any exemption for the bushes even if they were parts of such engines that even assuming that Heading No 8406 also contemplates parts of the engine such parts must be all the parts of the engine and not a few parts thereof and that bushes and bearings were the same and identical articles as held by the Appellate Tribunal and as bearings have been provided for under Heading No 8463 the question of any exemption under the Notification did not arise that there is no material for holding that the bushes which have been imported by the 221 appellant were parts of the engines referred to in Heading No 8406
Allowing the appeal  HELD 11 The Notification No 281Cus76 dated August 2 1976 as amended from time to time will apply to parts of the internal combustion piston engines mentioned under Heading No 8406
225G 12 Paragraph 2 of column 2 does not provide that it must be all the parts of the engine or engines
It simply provides parts thereof 
Such parts may be all the parts or any or some of the parts of the engine or engines in question
Although the parts are not mentioned under Heading No 8406 by necessary implicated and in the context of the Notification it includes the parts of the engine
225D F 2
Bushes and bearings are not same and identical
As the functions of bushes are the same as that of the bearings sometimes bushes are also called bearings
These two articles are distinct and separate
They are known in the market by two different names
226A B 31 In order to avail of the benefit of the exemption granted by the Notification it has to be proved that the parts in respect of which the exemption is claimed are parts of the internal combustion piston engine mentioned in Heading No 8406
As soon as that is proved such parts will get the benefit irrespective of the fact that they or any or some of them have already been included under Heading No 84063 or under any other heading
226C D 32 The intention of the Notification is clear enough to provide that the parts of the engines mentioned under Heading No 8406 will get the exemption under the Notification
Therefore even if bushes are same as bearings still they would come within the purview of the Notification provided they are parts of the engines mentioned under Heading No 8406226F 33 In the instant case there is no material or evidence nor is there any finding of the Appellate Tribunal or the Customs authorities that the bushes which have been imported by the appellant are parts of internal combustion piston engines falling under Heading No 8406
The case is therefore sent back to the Collector of Customs to decide after giving an opportunity to the appellant whether the bushes imported by the appellant are really parts of the internal combustion piston engines as mentioned under Heading No 8406
226G 227A B