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Judgment
Ramanujam, J.—The petitioner imported a consignment of 24 numbers of projection lamps as spares for use in projection form grinding
machine. In respect of that consignment, he claimed that the lower rate of duty under item 72(3) of the Customs Tariff is leviable as those bulbs are
essential part of ''Petewe'' projection form grinding machine model P-7-S-3D. However, the goods were treated by the first respondent as electric
lighting bulbs and classified under item 60(2) of Indian Customs Tariff. The goods were cleared under protest after paying the duty demanded by
the first respondent.
Subsequently, the petitioner filed a petition for refund of the difference in duty between the one paid under item 60(2) and the one payable under
item 72(3) on the ground that the projection lamps imported by him will squarely fall under item 72(3) and not under item 60(2). This claim for
refund was rejected by the first respondent on 17-11-1972, stating that the assessment originally made classifying the goods as coming under item
60(2) of the Customs Tariff was in order. The petitioner filed an appeal, to the second respondent. It was however rejected on 12-6-1973.
Thereafter, the petitioner took the matter in revision to the third respondent, but without success.
Thereafter, the petitioner has filed the present writ petition seeking a writ of certiorari to quash the various orders of respondents 1 to 3.
According to the petitioner, the consignment of projection lamps imported by him is indispensable for the working of the grinding machine, that it
has got certain special shape and characteristics for use as projection lamps in the grinding machine and that it cannot be used for any other
purpose. It is also pointed out that the bulbs are of low voltage and its peculiar shape makes it quite unfit for use as mere lighting bulbs.
Item 72(3) of the import Tariff is as follows -
According to the petitioner, the projection lamps imported by him are component parts of the grinding machine and they are essential for the
working of the said machine and the projection lamp has got some special shape and quality which is not essential for its use for any other purpose
much less for use as lighting bulb.
Item 60(2) under which the projection lamps imported by the petitioners have been assessed, refers to electric lighting bulbs not otherwise
specified. According to the revenue, though the bulbs may have a special shape and quality still they can be used as electric lighting bulbs.
The question is under which of the two items the projection lamps imported by the petitioner will fall. As already stated, the petitioner''s case is
that the projection lamps imported by him are essential for use in the grinding machine as a component thereof and that the grinding machine cannot
be used without this projection lamp. It is also stated that though it is of low voltage i.e. 100 watts, its price is about Rs. 113 exclusive of customs
duty and other charges, and that this shows that the projection bulb is of a special character with a special shape and quality. The case of the
petitioner as to the special characteristic of the projection lamp has been accepted even by the appellate and revisional authorities.
The appellate authority in his order dated 30-7-1973 says --
The appellants have produced drawings and the extracts taken from the technical instructions of the projection grinding machine in support of their
contention...The bulbs in question though of a special nature to suit a particular requirement are only projection lamps providing illumination. The
bulbs for safety mining lamps are assessable under item 60(2) I.C.T.
The revisional authority, the third respondent, also says --
They have produced a sample drawing and an extract from technical instructions of the machine. They contend that the goods are specially
designed for use in the grinding machine and are not required for general illumination and satisfy the conditions of item 72(3) I.C.T. Government
observes from the evidence produced that the impugned goods are used for illumination in the grinding machine so that the magnified projection of
the work piece on the screen is compared with the inserted magnified specified form in the grinding machine. Though the goods may have some
special characteristics, nevertheless. they remain projector lamps and are correctly classifiable under item 60(2) I.C.T. The goods, therefore,
cannot get the benefit of lower assessment under item 72(3) I.C.T.
Thus, the petitioner''s case that the projection bulbs in question have some special characteristics and are being used for illumination in the grinding
machine so that the magnified projection of the work piece on the screen is compared with the inserted magnified specified form in the grinding
machine, seems to have been accepted by the appellate and revisional authorities, but they seem to proceed on the basis that nonetheless they
continued to remain projective lamps and, therefore, they have to be classified under item 60(2) of I.C.T. According to them the projection lamps,
whatever be its special characteristics, have to be classified as item 60(2) in view of the tariff advices from the Central Board of Excise and
Customs.
It is true that the bulbs have been called projection lamps. But it is not possible to say that all projection lamps should be taken to come under
item 60(2) as has been held by the respondents. Projection bulbs can be of several kinds. The projection bulbs in this case are specially prepared
for use as a component or essential part in a grinding machine and therefore, they cannot be treated as coming under item 60(2) which refers to
electric lighting bulbs. The projection bulbs may come under item 60(2), if they are not otherwise provided. Item 72(3) refers to component parts
of machinery. If a projection bulb is a component parts of machinery, it is not possible to separate the projection bulb from the machinery and
classify the same as coming under item 60(2). Therefore, the main test is to find out whether the projection bulb is a component part of the grinding
machine and whether it has been given some special shape and quality which would not be essential for its use for any other purpose. In this case,
even the revisional authority finds that the projection bulbs are of special characteristics and they are to be used only in the grinding machines. If the
projection bulb is not a component part of the machinery, then it can be treated as an electric bulb coming under item 60(2). But if the projection
bulb becomes a component of a machinery, it will fall under item 72(3).
The learned counsel for the petitioner has produced the technical instruction given by the manufacturer of the projection form grinding machine, for
which the projection bulbs imported by him are claimed to be the component parts. From these instructions, it is seen that the projection lamp is
not used purely for illumination purposes but for a special purpose. In paragraph 8 of the instructions, it is stated that a blower is provided to cool
the projection lamps that the blower sucks up fresh air from the small filter at the bottom left hand side of the ventilation door and then the air is
blown directly into the lamp housing to cool the projection lamp. Under the head ''Optical equipment'' in paragraph 9 it is stated that the projection
lamp is part of the optical equipment fitted into the grinding machine and the optical part of the machine is composed of lighting device. The lighting
device substantially consists of a projection lamp of 100 watt voltage special projection lamp, which has a concentric coil for high light density and
that is fitted into a housing which is provided with cooling ribs. The projection lamp housing also contains the condenser and the light is projected
work piece by a mirror. These instructions set out above clearly indicates that the bulb is of a special nature specifically made for use as a
component part of the machinery, that the same cannot be used for the normal purpose of illumination, and that without the projection lamps with
its cooling filter arrangement, the grinding machine cannot be put to use effectively.
In The State of Tamil Nadu Vs. Binny''s Engineering Works Ltd., the question arose as to whether fuse switch boxes are component parts of
electrical goods and fall under item 41 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959, in that case, sales of fuse switch
boxes to registered dealers for being used as component parts of electrical goods manufactured by them were held liable only to the concessional
rate of tax u/s 3(3) of the Act.
In the case on hand item 72(3) uses the expression ''component parts of the machinery''. It also uses the words ''use of the article as component
parts should be essential.'' Almost all the factors referred to in item 72(3) are present in this case. The projection bulbs are not only component
parts of the machinery and they are also found to be of a special shape and quality which . would not be essential for their use for any other
purpose. Therefore, in view of the findings given by the third respondent in his order dated 11th April, 1974, the projection bulbs have to be taken
to be covered by item 72(3) and hence they cannot come under the residuary clause under item 60(2). The writ petition is therefore allowed.
There will be no order as to costs. The result is, that the petitioner is entitled to the refund claimed by him.