Supreme Court of India
SPACO CARBURETTORS (INDIA) LTD.versusCOLLECTOR OF CUSTOMS, BOMBAY
- Citation
- 1988 INSC 58
- Decided
- 24 February 1988
- Disposal
- Appeal(s) allowed
- Bench
- RANGANATH MISRA
Holding
The machine is a "machine tool working on metal" and must be classified under entry 84.45/48, not under the residuary entry 84.59.
Summary
Spaco Carburetiors (India) Ltd imported a special purpose complex machine used to plug holes in carburetor bodies with lead shots. The Revenue classified it under entry 84.59 of the Customs Tariff (residuary entry) attracting 60% duty, while the importer argued it fell under entry 84.45/48 (machine tools) attracting 40% duty. The Collector (Appeals) accepted the appellant’s view, but the Customs Excise and Gold Control Appellate Tribunal reversed that decision, holding the machine’s principal function was merely plugging holes and not metal‑working. The Supreme Court held that entry 84.59 is a residuary provision and must be excluded when a specific heading applies; the machine, being a multi‑purpose tool that treats metal, qualifies as a "machine tool" under entry 84.45/48. Consequently, the Court restored the Collector’s order, vacated the Tribunal’s order, and allowed the appeal.
Issues considered
- Whether the imported special purpose complex machine should be classified under Customs Tariff entry 84.45/48 (machine tools) or under the residuary entry 84.59.
- Whether entry 84.59 applies when a more specific heading (84.45/48) is available.
Legislation cited
- Customs Act, 1962s. Section 130E
- Customs Tariff Act, 1975s. First Schedule Entry 84.45/48, s. First Schedule Entry 84.59
Subjects
customs dutytariff classificationmachine toolresiduary entryentry 84.45/48entry 84.59special purpose complex machineCustoms ActCustoms Tariff Act
Judgment
SPACO CARBURETIORS (INDIA) LTD.
A
v.
COLLECTOR OF CUSTOMS, BOMBAY
FEBRUARY 24, 1988
[RANGANATH MISRA AND MURARI MOHON DUTI, JJ.) B
).
Customs Tariff Act, 1975: First Schedule Entry 84.45/48 and
Entry 84.59-'Special purpose complex machine'-'Relevant entry-
Determination of-Customs duty-Levy of.
Customs Act, 1962: Section 130E-Customs duty-Levy of-
'Special purpose complex machine'. c
Words and Phrases: 'Machine tool'-Meaning of.
The· appellant-firm imported !'special purpose complex
machine" and claime!l that it was classifiable under item 84.45/48 of D
the tariff schedule and duty was payable at the rate of 40 per cent.
The Assistant Collector took the view that the imported machine
was not manufacturing carburettors and was discharging au individual
,,_.,/. function of plugging holes in the carburettor body with the help of lead
shots, and that the appropriate entry was 84.59( l) of the Customs E
Tariff and duty was payable at the rate of 60 per cent.
The .appellant challenged the aforesaid order hy preferring an
appeal to the Collector (Appeals) who took the view that the imported
machine by plugging holes on the carburettor body with the help of lead
shots was clearly a machine which was fully conforming to the descrip- F
lion of a machine for treating metals inasmuch as it was treating the
carburettor body and preparing it for being rivetted, and therefore it
was conforming to the description of a machine tool as given under
heading 84.45/48 of the Customs Tariff, and allowed the appeal.
On further appeal, the Customs Excise and Gold Control Appel- G
late Tribunal came to the conclusion that the function of the imported
machine. was to plug the holes of carburettor body, that none of its
functions can he considered to be treating metal within the meaning of
sub-heading (2) of Tariff Heading 84.59, that classification as machine
tool under Tariff Heading 84.45/48 has to be ruled out, and that the
machine does not fall under any of the Heading of Chapier 84 of the H
37
38 SUPREME COURT REPORTS I1988) 3 S.C.R.
A Tariff Schedule. It accordingly reversed the appellate decision of the
Collector of Customs (Appeals).
In the appeal under section l3G-E of the Customs Act, 1962 to this
Court on the question: whether the imported "special purpose complex
machine" has to be charged to customs duty under item 84.59(1) as
B claimed by the Revenue or under 84.45/48 of the tariff schedule as
maintained by the appellant. ,.,-{
Allowing the Appeal,
HELD: l. Entry 84.59 of Schedule I is a residuary one and in-
~·
disputably if any other entry applies, application of this entry is ruled
c out. l40F-G)
-i-
\
2. Machine tools in general remain classified under entry 84.45
even if specialised for a particular industry Machine tools include
slotting machines, drilling and boring machines, tapping machines,
D reaming machines and rivetting machines. l4ID~E)
Tool Engineers Handbook-Mc Graw Hills:
Mc Graw Hill-Dictionary of Scientific and Technical Terms
referred to.
E
3. The machine in the instant case, is indeed a multi-purpose one
and keeping its performance in view, the machine has to be held as· a
"machine tool working on metal" and should legitimately find its way
into entry 84.45/48. Once it is so identified, it does not get into the
residuary entry 84.59. The Collector has reached the correct conclu-
F sion. The order of the Tribunal is vacated and that of the Collector is
restored. l4IF-G)
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 571
of 1987.
G From the Order dated 5.12.1986 of the Customs Excise and Gold
(Control) Appellate Tribunal, New Delhi in Appeal No. 424/86-B-2.
T.R. Andhyarujina, F.H.J. Talyarkhan, Shri Narain, R.K.
Krishnamurthi and Sandeep Narain for the Appellants.
H A.K. Ganguli, P. Parmeswaran and Ms. Radha Rangaswamy for
the Respondents.
SPACO (I) LTD. v. COLLECTOR OF CUSTOMS !MISRA, J.J 39
The Judgment of the Court was delivered by
A
RANGANATH MISRA, J. This appeal under section 13(}-E of
the Customs Act is directed against the decision of the Customs,
Excise & Gold (Control) Appellate Tribunal, New Delhi, by which the
Tribunal . has reversed the appellate decision of the Collector of
Customs (Appeals), Bombay. B
).
The short point involves in this appeal is as to whether the
imported "special purpose complex machine" has to be charged to
customs duty under item 89.59(1) as claimed by the Revenue or under
84.45/48 of the tariff schedule as maintained by the appellant. If the
appellant's claim is accepted the duty is at the rate of 40 per cent while
if the department's stand is maintained it is at the rate of 60 per cent.
c
The Assistant Collector took the view that the imported machine was
not manufacturing carburettors and was discharging an individual
function of plugging holes in the carburettor body with the help of lead
shots. Therefore, the appropriate entry was 84.59(1) of the Customs
Tariff. The appellant challenged the order of the Assistant Collector D
by preferring an appeal to the Collector (Appeals). He took the view
that the imported machine by plugging holes on the carburettor body
with the help of lead shots was clearly a machine which was fully
conforming to the description of a machine for treating metals
inasmuch as it was treating carburettor body and preparing it for being
revetted. The plugging on the carburettor body, the Collector felt, E
was, therefore, in the nature of treatment on the metalic body for
making it revetable subsequently; even otherwise also the machine by
plugging holes on the carburettor body was confirming to the descrip-
tion of a machine t.ool as given under heading 84.54/48 of the Customs
Tariff. He, therefore, accepted the appellant's contention.
F
On further appeal the Tribunal after discussing the stand-point
of the two sides came to the following conclusion:
"Our considered view is that the function of the
machine is to plug the holes of carburettor body. The
cutting or trimming operation is incidental to this function G
as it removes the extruded portion of the lead shots. The
function of checking is also a part of the main function of
plugging as the object of checking is to ensure that the
plugging has been done perfectly to make it air-tight. None
of these functions can be considered to be treating metal
within the meaning of sub-heading (2) of Tariff Heading H
'
40 SUPREME COURT REPORTS [1988] 3 S.C.R.
84.59. The function of plugging the holes of carburettor
A body does not amount to working metal. It does not change
the shape or form of the metal. The portion of the machine
which cuts the extruded portion of lead shot is not a ream-
ing machine working the internal surface of an existing hole
to exact dimension within the meaning of Explanatory
B Note 84.45(A)(5) of the CCC N (Volume 3), Chapter
84.45. The imported machine in question does not fall
within the definition of machine tool given in MC. Graw
Hill Dictionary of Scientific. and Technical Term as cited
by the learned S.D.R. Classification of the impugned
machine under Tariff Heading 84.45/48 is, therfore, ruled
out. Even by taking all the functions of the machine into
c . consideration, the classification for the purpose of customs
duty will have to be determined keeping in view Section
Note 3 in Section XVI and Chapter Note 5 of Chapter 84 of
the First Schedule to the Customs Tariff Act, 1975, accord-
ing to which the principal function will be determining
D factor. The principal function of this machine is to plug the
holes of carburettor body. The machine does not fall under
any of the heading of Chapter 84 of the Tariff."
84.59 of Schedule I provides:
"Machines and mechanical appliances having indivi-
>-··
'
E
dual functions, not falling within any other heading of this
Chapter:
(1) .............. .
-
F (2) ............... 60%."
The entry is, therefore, a residuary one and indisputably if any other
entry applies, application of entry 84.59 is ruled out. The appellant
maintains that the appropriate entry to apply to its case is 84.45/48.
That provides:
G
"Machine tools for working metal ......... 40%."
Machine tool, according to Tool Engineers Handbook published by
Mc Graw Hills means "any machine operating other than by man
H power which employs a contact tool for working natural or synthetic
SPACO \I) LTD. v. COLLECTOR OF CUSTOMS !MISRA, J.I 41
material. Mc. Graw Hill Dictionary of Scientific_and Technical Terms A
gives the following meaning:
"A stationary power driven machine for the shaping,
cutting, turning, boring; drilling,,grinding or polishing of
solid parts, especially metals."
B
;). Even according to the Department, machine tools coming under entry
84.45 are machines used for shaping or surface working metal or metal
carbides by either:
(i) cutting away or otherwise removing metal or metal
carbides (for example, lathes, drilling, planing, slotting, milling C
or grinding machines).
(ii) changing the shape or form of the metal without re-
moving any of it.
D
The note .indicates that machine tools in general remain classified
under this heading even if specialised for a .particular industry.
Machine tools include slotting machines, drilling and boring machines,
tapping machines, reaming machines and riveting machines.
Counsel for the· appellant produced before us a carburettor with-
out being treated by the machine and another which has already· been E
treated. He also produced a lead shot as also a nozle and indicated the
drilling process which is carried on by the machine on the carburettor.
We are of the view that the machine in question is indeed a
multy-purpose one and keeping its performance in view we are
·--rl-· inclined to agree with the submission of the counsel for the appellant F
that the machine is a "machine tool working on metal" and should
legitimately find its way into entry 84.45/48. Once it is so identified it
does not get into the residuary entry. In our view the Collector had
reached the correct conclusion.
The appeal is allowed. The order of the Tribunal is vacated and G
that of the Collector is restored. Parties are directed to bear their own
costs.
N.V.K. Appeal allowed.
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