The Supreme Court will notice the dictates of fashion in deciding whether an imported article is entitled to concessional rate of import duty under the Customs Act. Further the apex court will ignore the reasons given by the Central Excise Tribunal (CEGAT) for denying the concessional rate of duty to the imported goods while hearing an appeal against the Tribunal's order. These two messages come out loud and clear in the apex court's order in the case of Titan Watches Ltd vs Collector of Customs.Titan Watches manufactures analog quartz watches. It used to import the watch case for manufacturing these watches. According to the statement of its Purchase Manager it started importing watch cases integrated with bracelets to fasten the watch on the wrist. This was done after a representative of the French M/s Jean Merrier paid a visit to the company and explained about these watch cases with integrated bracelets. The word integrated was used to indicate that the watch case and the bracelet came from the samemetal mould. The company, according to the Tribunal, continued to mention the imports in the import documents as watch cases. However, on examination it was found that these were watch cases with integrated bracelets.The company claimed that like its original import of watch cases without bracelets the import with bracelets fell under the exemption nomenclature "complete watch case". It contended that when a bracelet is fitted and integrated with the watch case, the watch case does not lose its identity and it continues to be a watch case. On the other hand the bracelet having been integrated with the watch case, the bracelet ceases to be a separate article known as a bracelet.The Collector rejected this argument for availing of the concessional import duty. In appeal CEGAT confirmed the Collector. It held that the bracelet was in the nature of an accessory and that the words "complete watch case" did not include a bracelet. The Tribunal gave five reasons for holding this. First the company was amanufacturer of watches for which it imported the watch cases. It was not engaged in the manufacture of bracelets or other devices for fastening watches to the wrist. Second the company was admittedly importing watch cases without any bracelets and only after the French company's representative's visit it started importing the watch cases with bracelets for the high end expensive watches. These may be called watch case with bracelet or bracelet with watch case but not a watch case. Third, the Customs Tariff classified watch cases under one heading and the bracelets under a separate heading.Fourthly, the Tribunal pointed out that the Harmonised Commodity Description and Coding System, accepted by India, did not include a bracelet as part of a watch case. It included only the case body, pendant or watch bow for pocket watches, the dome, the bezel and the bottom. Fifthly, the Director General of Technical Development had clearly stated that in response to a query from the company it had attested that anintegrated bracelet formed part of a complete watch case that had been imported, only from the ``essentiality angle'' and not for purposes of eligibility for assessment to customs duty which would be examined only by the customs authorities.The Supreme Court decided to dispose of by an order instead of a judgment, the appeal by the company against CEGAT's reasoning for denying the concessional import duty to the imported watch cases with integrated bracelets. Accordingly it gave no reasons for holding that the CEGAT order was wrong and did not refer to a single one of the factors given by CEGAT. Justices S.P. Bharucha, A.P. Misra and R.C. Lahoti did not even consider the contrary judgment of the Tribunal in the case of M/s Indo Swiss Time Ld. vs Collector of Customs wherein Indo Swiss had been denied the concessional import duty for watches with inbuilt straps but described in the import documents as watch cases.The judges ignored the apex court's 1997 judgment in Perfect Machine Tools about exemptionof accessories and the crucial question whether the integrated bracelets were accessories. They noticed that the imported goods catered to the dictates of fashion, that they had seen the imported goods and stated their ``view'' that the goods were entitled to concessional rate of duty. They held that the Collector had simply expressed his own views without the customs leading evidence. But they did not remand the case for evidence. Apparently the rule of law in the apex court does not require reason.
