JUDGMENT

An interesting question of law relating to applicability of rules of interpretation appended to the Schedule of Customs Act arises for consideration in this appeal.

2. The appellant is a manufacturer of, "volumetric displacement type flow meter" (for short the meter). It imported goods described as "components and accessories of volumetric displacement type flow meter" for use in the end product. The flow meter manufactured by the appellant consists of the following devices:-

(a) a device for measuring the variable to be controlled.

(b) control device which compares the measured value with the desired value and actuates the starting, stopping (or) operating device.

(c) a starting, stopping (or) operating device.

(d) action device which carries out orders received either directly (or) through amplifying relays from device (C).

3. In the Bill of Lading the item imported is described as Industrial Metric Equipment (component and accessory of Volumetric Type Flow Meter). In the Purchase Order from Bharat Petroleum Corporation Ltd. the item manufactured by the appellant is described as under :

"To manufacture, test, pack and supply the flow meters with accessories and spares as under :

Double case type flow meters including accessories (as per details given in the attached Continuation Sheet)."

In the Purchase Order from Indian Oil Corporation Limited the item has been described as under :

"Model SD 30 75mm dia (3") single case rotary vane positive displacement meter with large numeral counter, the rate of flow indicator, strainer-cum-air eliminator as per specification given below......"

From all this material it appears what was imported by the appellant was component for being used in the flow meter. It is so understood in the commercial circle. Even the Assistant Collector held that the meter produced by the appellant was capable of showing the rate of flow. But according to him since it was used for measuring volume also, therefore, it was liable to be classified under the Tarrif Heading 90.26. For this reliance was placed on clause (c) of the General Rules for Interpretation of the First Schedule - Import Tarriff of the Customs Act. The finding recorded by the Assistant Collector has not been disturbed by the Collector (Appeals) or by the Tribunal. The relevant Tariff Items read as under :-

"90.24 Instruments and apparatus for measuring, checking or automatically controlling the flow, depth, pressure or other variable of liquids or gases or for automatically controlling temperature (for example, pressure gauges, thermostats, level gauges, flow meters, heat meters, automatic over-draught regulators), not being articles falling within Heading No. 90.14:

(1) Not elsewhere specified 40%

(2) Thermostats and Humidistats 60%

90.26 Gas, liquid and electricity supply or production meter, calibrating meters therefor. 60%

90.29 Parts or accessories suitable for use solely or principally with one or more of the articles falling within Heading Nos. 90.23, 90.24, 90.26, 90.27 or 90.28."

Flow meters are specifically covered in Tariff Heading 90.24. Specific excludes general, is the well-known principle. Heading 90.29 permits levy on parts or accessories which are used solely in the manufacture of one or more of the articles falling within Heading 90.24. The Assistant Collector held that the accessories imported by the appellant were used solely for the meter manufactured by the appellant. Therefore, if the meter manufactured by the appellant can be said to satisfy the description of Tariff Heading 90.24 then by virtue of Tariff Heading 90.29 the rate of duty on the components imported by the appellant could be levied as in Tariff Heading 90.24. On the finding recorded by the Assistant Collector the end product manufactured by the appellant being specifically provided for by 90.24 the accessory imported by the appellant which was solely used for manufacture of it was liable to be classified on the same rate as the item in which it was used, namely, f