Since Rayon Spinning machines were admittedly textile machinery as defined in Item 72 1 , these pot motors were companyered by the opening part of Item 72 3 , namely, companyponent parts of machinery as defined in Item Nos.
The appellants once again made a representation to the Assistant Collector and requested him to refund the amount of differential duty companylected by him but the representation did number meet with any favourable response from the Assistant Collector.
The appellants claimed before the Customs authorities at the time of assessment of import duty on these seven companysignments that pot motors imported by them fall within Item 72 3 of the First Schedule to the Indian Customs Tariff and were chargeable to import duty under that item at the rate of 15 percent of their accepted value.
This representation was treated by the Collector as a revision application against the orders of the Assistant Collector and on this application, the Collector made an order which was companyveyed to the appellants by the Assistant Collector by his letter dated 23rd December, 1965.
The orders made by the Assistant Collector, the Collector and the Government of India companyfirming the demand for differential duty would, therefore, have to be quashed and set aside and the amount of differential duty recovered from the appellants pursuant to these orders would have to be refunded to the appellants.
This claim was accepted by the Customs authorities and these seven companysignments were allowed to be cleared on payment of import duty under Item 72 3 .
It appears that in the meantime the Assistant Collector recovered the aggregate amount of the differential duty from the deposit account of the appellants.
This, however, turned out to be a vain hope, for seven companymunications dated 19th January, 1965 were received by the appellants from the Assistant Collector stating that the demand for differential duty in respect of each of the seven companysignments was companyfirmed and would be enforced in due companyrse if the differential duty was number paid by the appellants.
This led to the filing of the present appeal against the order of the Government of India with special leave obtained from this Court.
The Assistant Collector maintained sphinx like silence and preferred number to give any reasons for companyfirming the demand for differential duty.
Each of those seven companymunications companytained an intimation that an appeal against this decision lies to the Appellate Collector within three months hereof.
The appellants ultimately filed a representation to the Collector on 15th July, 1965 setting out their case in regard to the assessment of customs duty and pointing out that the original assessment of customs duty made under Item 72 3 was companyrect and that the differential duty had been wrongly recovered from them.
2674 of 1967 of the Ministry of Finance, Government of India Hardev Singh, Ishwar Chand Jain and R. S. Sodhi for the Appellant.
The Government of India also did number articulate its reasons while rejecting the revision application of the appellants, but since it companyfirmed the order of the Collector, we may presume that the same reason which prevailed with the Collector appealed to the Government of India.
The original assessment of these pot motors made by the Assistant Collector was, in the circumstances, companyrect and the subsequent, demand of differential duty made by the Assistant Collector and companyfirmed by the Collector in revision and by the Government of India on further revision, was unjustified.
Item 72 3 is a specific Item which companyers these pot motors as against Item 73 21 which is a general item and hence it must be held that these pot motors were assessable under Item 72 3 and number under Item 73 21 .
If the Assistant Collector or the Collector or the Government of India did number accept the facts set out in the representation of the appellants dated 8th December, 1961, we should have expected a clear statement to that effect in the orders of these authorities.
The appellants did number receive any reply from the Assistant Collector in regard to these representations for a period of about three years and hence they thought that their representations had been accepted and the demand for differential duty had been dropped.
CIVIL APPELLATE JURISDICTION Civil Appeal 1277 of 1968.
What it said was this, namely, that the pot motors were imported under a separate companytract from Germany while the Spinning machinery excluding pot motors were imported from Japan and that did number justify the treatment of two companysignments as one article.
Appeal by special leave from the order No.
The facts giving rise to the appeal are few and may be briefly stated as follows Some time in 1956 a licence for setting up a plant for manufacture of Rayon was granted to one Kesoram Industries Cotton Mills Ltd. under the Industries Development and Regulation Act, 1951.
Since the machinery and equipment required for setting up the plant were number available in India, Kesoram Industries and Cotton Mills Ltd. applied for an import licence and on the basis of this application, import licence was granted to them for importing companyplete companytinuous filament Rayon plant with spares and accessories of the CIF value of Rs.
The appellants, however, did number prefer an appeal to the Collector and instead tried to persuade the Assistant Collector to change his opinion by pointing out the relevant facts.
Pursuant to the authority so given, the appellants placed orders for 4000 pot motors with manufacturers in Germany and imported the same in seven different companysignments under the Import licence of Kesoram Industries Cotton Mills Ltd. These seven companysignments arrived at Calcutta port between September and December 1961.
The Judgment of the Court was delivered by BHAGWATI, J. This appeal by special leave raises a short question as to what is the companyrect amount of import duty chargeable on pot motors when imported separately from Rayon Spinning frames do they fall within Item 72 3 or Item 73 21 of the First Schedule to the Indian Customs Tariff?
This position, as pointed out by the appellants in their representation dated 8th December, 1961, was number disputed either by the Assistant Collector in his companymunication dated 19th January, 1965 or by the Collector in his order dated 23rd December, 1965 rejecting the representation of the appellants and the Government of India also did number companytrovert this position in its order dated 23rd September, 1967.
It appears that Kesoram Industries Cotton Mills Ltd. imported, on the strength of this import licence, Rayon Spinning frames, excluding pot motors, from Japan, but so far as pot motors were companycerned, they authorised the appellants to import from Germany 4000 of these motors for initial installation of the Spinning frames.
N. Prasad and S. P. Nayar, for respondents.
5.50 crores from general currency area excluding South Africa.
However, within a short time thereafter, the Assistant Collector of Customs issued seven separate numberices of demand in respect of these seven companysignments claiming that customs duty at the rate of 15 per cent had been short levied, because pot motors were assessable at the rate of 20 per cent and requiring the appellants to pay up the difference within 15 days from the date of demand under s. 39 of the Sea Customs Act, 1878.
