2008 (9) TMI 650 - AT - Customs

Import for manufacture of goods - Exemption, conditional exemption - Manual/Documents for use of machinery

Summary

Issues:
Classification of imported documents/manuals under Customs Tariff Heading 8475 or Chapter 49 for duty assessment under Notification No. 25/2002.

Analysis:
The appeal involved a dispute regarding the classification of imported documents/manuals related to a machine under Customs Tariff Heading 8475 or Chapter 49 for duty assessment under Notification No. 25/2002. The appellant imported the machine and later imported documents representing "Licence Technology" for the machine. The Department treated the documents as part of the machine and assessed duty under Heading 8475. The appellant argued that the documents could not be separated from the machine and should either be exempted under Chapter 49 or classified under Heading 8475 with the benefit of the notification. The Commissioner (Appeals) upheld the original authority's decision.

The appellant contended that since the documents were treated as part of the machine by the Department, they should not be separately levied duty under Heading 8475 without the benefit of the notification. They argued that if the documents were considered goods, they should be classified under Chapter 49 and fully exempted. The appellant also raised the issue of the extended period for demanding short levy, stating that it should not apply since the assessment under Heading 8475 was at the Department's instance.

The Department argued that the appellant failed to submit a certificate for the entire consignment as required by the notification, and the certificate provided only related to the machinery, justifying the duty demand. The Tribunal considered the submissions and ruled that the documents could not be classified under Chapter 49 as goods. The issue was not about the classification of the documents but the valuation of the machinery imported earlier. The valuation rules allowed for including license fees connected with machinery in its value. The Tribunal noted that the documents were essential for the functioning of the machine, and since their value was considered part of the machinery for customs duty, the concession under Notification No. 25/2002 should apply to that part of the machinery's value.

In conclusion, the Tribunal allowed the appeal, providing consequential relief as per the law, on the basis that the documents were integral to the functioning of the imported machine and their value should be considered for duty assessment under the relevant notification.