ORDER

1. The Appellant firm imported a consignment of what was described in the covering invoice as "Pole-end-plate forgings-Rough machined pole and plate forgings for generator parts Drg. No. 3-68-0006 through the port of Bombay. The Customs authorities classified the goods under heading No. 73.33/40 which read at the material time as follows :-

"73.33/40-other articles of iron or steel"

The appellants cleared the goods on payment of customs duty so assessed at 60% ad valorem (Basic Customs duty) plus 15% ad valorem (Auxiliary Customs duty). Later on, they filed a refunded claim before the Assistant Collector of Customs seeking re-assessment of the goods under Customs Notification No. 182/78 on the ground that the subject goods were required as parts for the assembly or manufacture of synchronous condenser of rating 30 MVAR.' The A.C. rejected the claim as unsubstantiated on the ground that the documentary evidence asked for by him was not produced by the Appellants. Against this order the appellants preferred an appeal which the, Appellate Collector of Customs rejected on the ground that the imported items were not finished items and therefore they could not be deemed as parts within the meaning of the Customs Notification No. 182/78. He also rejected the Appellant's contention that Rule 2(a) of the Rules for the interpretation of the Customs Tariff Schedule was applicable for interpretation of expressions occurring in notifications also. It is against this order that the appellants filed a revision application before the Central Government which stands transferred to the Tribunal under Section 131-B of the Customs Act and is to be disposed of by the Tribunal as if it were an appeal presented before it.

2. The claim for re-assessment of the imported pole-end-plate forgings is on two alternative grounds. First, the imported goods are specially designed component parts of generators in terms of Interpretative Rule 2(a) read with Heading No. 85.01(1) of the Customs Tariff Schedule. Alternatively, the goods also attract the provisions of Customs Notification No. 182/78 read with Interpretative Rule 2(a) as they are used in the assembly of synchronous condenser falling under Heading 85.01(1). The first of the two grounds referred to above was mentioned for the first time in the Revision Application. The Appellants submitted that they did not put forth this ground in the appeal before the Appellate Collector through oversight.

3. Appearing on behalf of the appellants, Shri Subramanian submitted that, in terms of Interpretative Rule 2(a), the imported goods, even though they were in the nature of unfinished or incomplete articles, were nevertheless to be deemed as finished or complete articles since they had the essential characteristics of the complete or finished articles. In this context, he referred to page 2, Vol. 1 of the Explanatory Notes to the Brussels Tariff Nomenclature containing a commentary on Interpretative Rule 2(a). The said commentary states that the provisions of the said rule also apply to blanks (unless they are specified in a particular heading) and the term "blank" is to be taken to mean an article, not ready for direct use, having the approximate shape or outline of the finished article or part, and which, other than in exceptional cases, can only be used for completion into the finished article or part. Shri Subramanian then proceeded to explain his point with reference to a technical write-up and a technical drawing purporting to show how the imported goods had the essential characteristics of the finished part of the synchronous condenser and how they would be used for fitment to the condenser after machining. Shri Subramanian submitted that Interpretative Rule 2(a) was applicable to the facts of the case and the imported goods should consequently be held to be component parts of synchronous condensers falling under heading 85.01(1) of the Customs Tariff Schedule. If, however, this contention was not acceptable, he made the alternative submission that notification No. 182/78 was attracted as the imported goods were required for the purpose of manufacture or assembly of synchronous condensers. In this context, he also referred to the compendium of classification opinions given by the Customs Cooperation Council, Brussels, in which it is stated that rough steel castings would be deemed to be parts of internal combustion piston engines falling under Heading 84.06. The appellant's case was analogous. He also relied upon Section note 2(b) to Section XVI of the Customs Tariff Schedule in support of his contention that the imported goods being suitable for use solely or principally with synchronous condensers ought to be classified with the condensers i.e. under Heading 85.01.

4. Continuing Shri Subramanian stated with reference to the alternative submission relying upon notification No. 182/78 that even semi-finished or incomplete parts were entitled to the benefits that notification by application of Interpretative Rule 2(a). The required evidence of the fact that the goods had been used for the purpose for which it was imported and as laid down in the notification had already been submitted.

5. Appearing on behalf of the respondent, Shri Raghavan Iyer submitted that the Interpretative Rules, Section Notes and Chapter Notes appearing in the Custom Tariff Schedule were available only for interpretation of headings and sub-headings of the Schedule. They did not apply to and, therefore, could not be invoked for interpreting notifications which were not part of the Customs Tariff Schedule. He disputed the contention of Shri Subramanian that Interpretative Rule 2(a) could be invoked to interpret the expression "parts" appearing in Customs Notification No. 182/78, the said expression must be construed with reference to the notification only. The notification applied to parts and did not refer to semi-finished or incomplete parts. Since the goods were not ready for fitment in the condition in which they were imported and they could be fitted into the machine only after processing they could not be deemed to be parts for the purpose of the said notification. Shri Iyer had no submissions to make in respect of the evidence produced by the appellants regarding the end-use of the imported goods as required in Notification No. 182/78.

6. Referring to the contention of the appellants that by application of the Interpretative Rule 2(a) and Section note 2(b) to Section XVI, the imported goods would fall for classification under Heading 85.01(1), Shri Iyer submitted that this ground had not been taken up by them before the Appellate Collector and, on this ground, it should fail.

7. We have given careful consideration to the submissions of both parties. From the technical write-up and technical drawings furnished by the appellant, there is little doubt that the imported goods, namely pole-end-plate forgings are semi-finished or incomplete articles which, on certain machining, result in pole-end-plates which are component parts of synchronous condensers. Interpretative Rule 2(a) of the rules for the interpretation of the First Schedule to the Customs Tariff Act of 1975 postulates as follows :-

"Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as imported, the incomplete or unfinished article has the essential character of the complete or finished article."

Though the Explanatory notes to the BTN have no legal binding effect, they are of considerable persuasive value. As pointed out by Shri Subramanian, even blanks which are not ready for direct use and which have the approximate shape or outline of the finished article or part are to be deemed as a complete or finished article in terms of Rule 2(a) for interpreting the headings in the Tariff Schedule. The contention of the appellants that the imported goods, after a certain amount of machining, are required to form parts of synchronous condensers is not disputed by the respondent. Having regard to these considerations, we are of the view that the imported goods should be deemed to be component parts of synchronous condensers and that they fall for classification under heading No. 85.01(1) of the Customs Tariff Schedule.

8. The rate of duty applicable to goods falling under heading 85.01(1) was the same at the material time as the rate of duty applicable to component parts required for the assembly or manufacture of those goods in terms of notification No. 182/78. It is not, therefore, necessary for us to go into the alternative claim of the appellants that the benefit of the said notification should be extended to them.

9. In the result, we allow the appeal and direct that the goods should be re-assessed under heading No. 85.01(1) of the Customs Tariff Schedule and that the consequential refund of the differential amount of duty involved should be paid by the Assistant Collector of Customs to the appellants within 60 days from the date of communication of this order.