V.T. Raghavachari, Member (J)

1. These two appeals were initially heard by a Bench consisting of three members who felt that there were conflicting judgments by different Benches of this Tribunal on the issue arising for determination in these appeals, mainly with reference to the construction of the interpretative rule 2(a) as also on the test of post importation costs in that connection and therefore it would be better if the appeals are heard by a Bench consisting of more than three members in order to arrive at uniformity in the view to be taken on the issue in these appeals. Accordingly the papers were placed before the President who constituted this Bench of five members for hearing the appeals.

2. After the appeals had been posted for hearing before this Bench M/s. Enfield India Ltd. and also M/s. Tata Engineering Locomotive Co. Ltd., both represented by Shri S. Subramanian, Consultant, applied that they may be permitted to participate in the proceedings before us as intervenors since a large number of their cases are also to be heard by this Tribunal in which the issue now before us would be the main issue. After hearing Shri Gujral, the learned counsel for the appellants, M/s. Bharat Heavy Electricals Ltd. and Shri J. Gopinath, SDR for the Department permission was granted for the said two firms to participate in the proceedings as interveners, making it specific that submissions on their part would be confined to general principles of law such as interpretation of the rules and other legal questions and not on the facts of their respective cases, since the appeals of the interveners are not before this Bench for disposal.

3. The goods imported by the appellants were Rough machined banding ring forgings. The appellants claimed that they were to be assessed under heading 84.11(1) CTA. But the Department assessed the goods in one case under heading 73.06/07(2) CTA and in the other case under heading 73.33/40 CTA. After payment of duty as assessed the appellants claimed refund on the basis that the proper heading would be heading 84.11(1) C.T.A. and hence the differential duty was to be refunded. Both claims were rejected by the Assistant Collectors concerned. On appeal the appellants claimed assessment under an alternative heading also under heading 85.01 C.T.A. The appeals were rejected by the Collector (Appeals) confirming the classification already made. The appellants preferred revision petitions to the Govt. against the said orders of the Appellate Collector. It is those revision petitions that are now before us as the present deemed appeals.

4. We have heard Shri B.B. Gujral, Advocate for the appellants; Shri S. Subramanian, Consultant for interveners and Shri Gopinath, SDR for the Department.

5. The imports were of rough machined banding ring forgings for use as component parts of boiler feed pump motors. The claim of the appellants is that, as imported, the goods had attained the approximate shape or outline of the finished article to be made out of the same and that the imported material could not be used except in the machinery for use in which it had been imported and, in the circumstances, applying interpretative rule 2(a) they are to be classified as the finally fabricated part itself and hence the proper classification would have been under heading 84.11(1) CTA only. In advancing this contention they relied upon the fact that, according to them, the charges incurred in the processes to be applied on the imported product for the fabrication of the final product was less than 1.5% of the c.i.f. value and that would also be a relevant circumstance for the application of rule 2(a). Thus it was this question of the interpretation of the provisions of the interpretative rule 2(a) that was argued in extenso by both sides as also the interveners.

6. Interpretative Rule 2(a) reads as follows :-

"2(a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinis