ORDER

D.C. Mandal, Member (T)

1. These are Revision Applications, which were originally filed before the Central Government, but were subsequently transferred to this Tribunal for disposal as appeals.

2. The issue involved in all these three appeals is the same. We are, therefore, disposing them of by this common order.

3. The appellants imported three consignments of Retaining ring Forgings under three Bills of Entry. The goods were assessed by the Custom House under Customs Tariff Heading 73.33/40 of C.T.A., 1975 (a) 60% ad-valorem basic customs duty + 25% ad-valorem Auxiliary duty plus countervailing duty (I) Rs. 165 per M. Ton. The appellants filed application for re-classification of the goods under Heading 84.11(1) C.T.A., 1975 @ 40% ad-valorem basic customs duty plus countervailing duty at the aforesaid rate. The claims of the appellants for re-assessment under the Heading indicated by them were rejected first by the Assistant Collector of Customs and then by the Appellate Collector of Customs, Madras on the ground that the Retaining Ring Forgings did not attain the definite shape and essential character of a finished component and, therefore, they could not be considered as component parts of compressors falling under Heading 84.11(1) of the C.T.A. 1975, as per the Interpretative Rule 2(a) of the First Schedule to the Customs Tariff Act, 1975. The present appeals are against the said orders of the Appellate Collector.

4. The appellants, by their written appeals and also through the learned advocate, Shri B.B. Gujral during the hearing, have contended that the goods imported by them are component parts of compressors, and hence they are assessable to duty (a) 40% ad-valorem under Heading 84.11(1) read with Interpretative Rule 2(a) of the First Schedule to the Customs Tariff Act. This Rule covers even blanks, i.e. the articles not ready for direct use, having approximate shape or outline of finished article or part. The imported goods were manufactured by the foreign supplier according to the specification prescribed in the contract and the relevant drawings of the appellants. These specifications include detailed chemical composition, mechanical and metallurgical properties and heat treatment. They are also machined to the prescribed dimensions and are tested to ensure that they strictly conform to the prescribed specifications. The tensile test is performed in accordance with the A.S.T.M. or I.S. Standards. After importation, the appellants carry out detailed chemical analysis and also magnetic properties tests. These goods are tailor made, since these are specifically manufactured and cannot be used in any other machinery. The foreign supplier completed 97.5% of the furnishing work in their factory before shipment of the goods and the operation done by the appellants after importation is only minor, representing not more than 2.5% of the cost of the imported goods. The basic operation carried on by the appellants mainly relate to reduction of outer diameter and increase of inner diameter and to improve the surface finish. They have, therefore, pleaded that the imported Retaining Ring Forgings should be assessed as component parts of compressors. In support of their plea, they have cited this Tribunal's orders in the following cases:-

(i) BHEL v. Collector of Customs, Bombay (1985 ELT 410);

(ii) BHEL v. Collector of Customs, Madras (1983 ELT 181);

(iii) BHEL v. Collector of Customs, Madras (1983 ELT 2034 and 2035);

(iv) Central Railways, Bombay v. Collector of Customs, Bombay. MANU/CE/0375/1983 : 1984 (16) ELT 510 (Tribunal); and

(v) Philips (India) Ltd. v. Collector of Customs, Bombay MANU/CM/0019/1984 : 1984 (18) ELT 459 (Tribunal).

5. Shri J. Gopinath, learned SDR has drawn our attention to the appeal No. CD(SB)(T) 261/79-B.2. He has stated that in the consignment covered by this appeal rough machined retaining ring forgings for generator have been imported. In the case of the ring forgings imported in the consignment covered by this appeal the same drawing Serial No. 4, as in the other two cases of retaining ring forgings, has been used. This shows that the rough machined retaining ring forgings imported by the appellants are for general use for generators as well as for compressors. Shri Gopinath has further stated that the appellants have to complete considerable operation like reduction of diameter from 365 mm. to 355 mm. and drilling of innumerable holes, surface finishing etc. after importation. Rule 2(a) of the Interpretative Rules to the First Schedule to the Customs Tariff Act is not satisfied by the goods. The imported goods are clearly covered by the decision of this Tribunal in the case of Collector of Customs v. Anti-Friction Bearing Corporation MANU/CE/0379/1983 : 1984 (16) E.L.T. 613. The goods have been correctly assessed under Heading No. 73.33/40. The appeals filed by the appellants do not have any merits.

6. Learned Advocate Shri Gujral has tried to distinguish the facts in the case reported in MANU/CE/0379/1983 : 1984 (16) E.L.T. 613 and in the cases of the appellants which are before us for consideration.

7. We have considered the submissions of both sides. The argument of Shri Gopinath that the imported rough machined retaining ring forgings are for general use for generators and compressors is borne out by the description of the goods as pointed out by him in paragraph 5 (supra). "Compressors" and "Free piston generators for gas turbines" fall under Heading 84.11 of the Customs Tariff. The goods imported by the appellants are claimed to be for use in compressors. They claim assessment as component parts in terms of Rule 2(a) of the Interpretative Rules to the First Schedule to the Customs Tariff Act. The benefit of this Rule can be extended only when the imported goods have attained the essential character of a component at the time of importation. This depends on the extent of post-importation operation carried out to the goods. We have carefully gone through the Drawings of the imported goods. We find that after importation the appellants have to carry out considerable operations as indicated below:-

In addition, many holes are drilled on the rings for mounting of motor winding, and surface finishing is done. These cannot be called operation of minor nature. The goods did not attain the essential character of component parts at the time of importation and accordingly, they cannot be assessed as component parts in terms of Rule 2(a) of the Interpretative Rules. The goods were, therefore, correctly assessed under Heading 73.33/40 on merits.

8. The argument of the appellants that post importation operations represented only 2.5% of the cost of imported goods is not relevant in these cases as the appellants have themselves conceded that earlier criterion for holding unfinished goods as component parts was abolished after introduction of the new Tariff under the Customs Tariff Act, 1975. The criterion of 5% post-importation processing is not applicable to these goods.

9. The learned Advocate has cited five earlier decisions of this Tribunal and the learned SDR has cited one decision in support of their arguments. In this context, we are to observe that the decisions cited by them cannot be followed in these appeals as each case of this type is to be decided on merits taking into consideration the condition of the goods at the time of importation and the actual extent of processing done to the goods after the importation. A similar view was taken by this Tribunal in the case of M/s. Bharat Heavy Electricals Limited v. Collector of Customs, Madras (1983 ELT 181). The decision taken in one case cannot be applied to another unless the goods are identical and the extent of post-importation operation is the same. The goods covered by the cases cited before us and in the present cases are not identical and the nature, of post-importation operation done to the goods is also different as discussed in paragraphs 12 to 14 below. In the circumstances, we are unable to apply these decisions to the cases before us.

10. Out of the cases cited by the learned Advocate, the cases mentioned at Srs. No. (IV) (V) of paragraph 4 (supra) are not relevant to the present cases. In those two cases, the goods were imported prior to introduction of the Customs Tariff Act, 1975. During the period relevant in those two cases, un-finished goods, whose post-importation processing costs did not exceed 5% of the landed cost, were treated as component parts. The criterion of 5% post-importation operation was abolished after introduction of new Tariff under the Customs Tariff Act, 1975.

11. In the case of Bharat Heavy Electricals Limited v. Collector of Customs, Bombay, reported in 1983-ELT-410, the goods imported were pole-end-plate forgings - rough machined pole and plate forgings for generator parts. In that case, the imported pole-end-plate forgings, on certain machining, resulted in pole-end-plates which were component parts of synchronous condensers. According to Rule 2(a) of the Rules of Interpretation to the First Schedule to the Customs Tariff Act, 1975, those were ordered to be assessed as component parts.

12. In Bharat Heavy Electricals Ltd. v. Collector of Customs, Madras (1983-ELT-181), the imported goods were forged stubs for boiler. The imported goods were in the shape of regular hollow cylinders of steel. In order to enable a boiler pipe to be connected on one side, one end of this cylinder had to undergo some machining so that the outer diameter was reduced. Thus, a tapered shape was imparted to one end of the stub. It was held by the Tribunal that the machining was of minor nature and as such the goods were to be assessed as "parts".

13. In the case of Bharat Heavy Electricals Limited v. Collector of Customs, Madras (1983-ELT-2034), the imported goods were impeller rings of draught fan. It appears that in the said case the unfinished, parts were as per drawings and since the finished or complete part was also in the form of a ring, the imported parts had the characteristics of the finished part. However, the extent of post-importation operation is not mentioned in the order reported in 1983-ELT-2034. The learned Advocate, during the hearing, also did not explain the extent of post-importation process involved in that case. We are, therefore, unable to compare the present cases with the case cited by the learned advocate.

14. The learned SDR has relied on this Tribunal's decision in the case of Collector of Customs v. Anti-friction Bearing Corporation MANU/CE/0379/1983 : 1984 (16) ELT 613. The goods imported in that case were rough ring forgings for bearing races (Roller bearings) and considerable processing was done after importation of those goods. Accordingly, the Tribunal held that the goods did not attain the essential character of finished bearing races and hence, the assessment could not be done as component parts.

15. In view of the above discussions, we hold that the present cases before us are not comparable with the cases relied upon by appellants and by the Revenue. Considerable processing was required to be done in the form of reduction of outer diameter of the ring forgings by 10 to 12 mm., increase of inner diameter by 10 to 11 mm., reduction of width by 9 to 10 mm., grooving done to the extent of 72 mm. in two cases and 103 mm. in one case, drilling of many holes on the rings and surface finishing. The imported retaining ring forgings did not attain the character of finished parts. Original assessment of the goods under Tariff Heading 73.33/40 of the Customs Tariff Act, 1975 was, therefore, correct.

16. In the result, we find no merits in the appeals filed by the appellants. We, therefore, uphold the impugned orders and dismiss all the three appeals.