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 covere