I.J. Rao, Member (T)

1. This is an appeal from the Collector of Customs, Bombay, against the impugned order of the Collector of Customs (Appeals), Bombay. Briefly, the facts of the matter are that the respondents imported certain bearings and bushes, under a Bill of Entry, for warehousing under Import Department Serial No. 002027 dated 6.6.1980. The goods were classified for purposes of assessment Under H. 84.63 of the CIA as it then stood. After the assessment of the Bill of Entry, the goods were allowed to be warehoused under Sections 59 & 60 of the Customs Act, 1962. The importers had imported total 9 cases of goods and removed 4 cases against the Bill of Entry No. 78 dated 24.11.1980 and another Bill of Entry No. 2105 dated 7.1.1981. On 18.6.1981, the importers filed a Bill of Entry for Ex-Bond clearance for home-consumption for the two remaining cases. These goods were also assessed under H. 84.63 CTA and were allowed clearance on payment of duty.

2. Meanwhile, with effect from 1.3.1981, H. . 84.63 of BTN was split into sub-heading (1) & (2). The rate of duty for sub-heading (1) was 60% + 20% whereas for sub-heading (2), the rate of duty was revised . to 100% + 25%. The department, therefore, issued a L/C memo on 14.12.1981 u/s 28 Customs Act, 1962. The demand was confirmed on 14.10.1982.

3. The respondents - who were the importers - filed on appeal before the Collector of Customs (Appeals). The Collector allowed their appeal after condoning the delay, recording as follows :-

"Coming to the merits of the case, it is noticed that the Assistant Collector while confirming the demand originally issued had not given any reasons as to why the imported bushes were liable to be classified under heading 84.63 (2) instead of their original assessment under heading 84.63(1) of the Customs Tariff. The appellants moreover had produced evidence at the time of hearing to the effect that identical bushes imported by them earlier had been assessed to Customs duty under heading 84.63(1) by the Custom House. The Custom House had not given any cause for suddenly changing this precedent assessment practice.

Therefore, I hold the view that due to lack of any reasoning and due to the precedent practice of assessment as prevalent in the Customs House, the imported bushes were rightly classifiable to customs duty under heading 84.63(1) of the Customs Tariff. The Less charge demand confirmed by the Assistant Collector is therefore set aside and the appeal is allowed."

Hence, this present appeal against the order of the Collector of Customs (Appeals).

4. After filing the appeal, the learned Counsel for the respondents filed a miscellaneous application asking for permission to take up an additional point, stated to be a point of law, namely, that the demand notice had been served on the respondents after the expiry of the period of six months from the date of payment of duty. The Bench, by their Order dated 22.7.1986, allowed the same.

5. We heard Shri 3. Gopinath, the learned SDR for the appellant, and Shri V. Lakshmikumaran, Advocate, for the respondents. Shri Gopinath, at length, argued that the goods were correctly classifiable under H. 84.63(2). Shri Lakshmikumaran, who initially advanced some arguments that the goods were actually classifiable under H. 84.63(1), gave up the arguments and agreed that the goods were, on merits, correctly classifiable under H. 84.63 (2), as argued by the learned SDR. We are, therefore, not examining this point further.

6. The other major ground, on which the respondents resist demand and seek rejection of the appeal, is the ground of limitation. It was Shri Gopinath's argument that the demand is on the time-bar in view of the following actual data :-

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7. Shri Gopinath argued that under Section 28 of the Customs Act, 1962, the relevant date for the purposes of computation of limitation was the date of payment which, in this case, was 19.6.1981. Shri Gopinath further argued that a reading of Sections