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2014 (1) TMI 1706 - AT - CustomsUndervaluation - Demand of differential duty of customs, anti-dumping duty - confiscation and penalty - Import of components of Plastic Injection Moulding Machines (PIMM) for manufacture of plastic articles or import of complete machine - import in SKD / dismantled form - classification of goods - Held that - the appellant has resorted to subterfuge by asking the foreign supplier to dismantle the PIMM before export and show them as SKD assemblies with no mention of PIMM anywhere and for this service, the appellant also paid consideration to the foreign supplier towards dismantling charges. It is not in dispute that prior to May, 2009 when the appellant was importing the very same machines, it had declared the machine as PIMM and not as anything else. If that be so, the appellant cannot take a different stand now that the goods under importation are not PIMMs merely because they have been dismantled and disassembled into sub-assemblies. It is a settled principle of law that those who violate a provision of law has to suffer, and that violation cannot be made use of in any other proceedings and make a gain out of it. The provisions of Rule 2(a) of the General Rules of Interpretation is applicable for determination of the classification of the goods under importation for levy of anti-dumping duty under Notification No. 39/2010-Cus., dated 23-3-2010 as the scheme for levy of ADD does not envisage separate principles of classification for levy of various types of customs duties. Demand confirmed - Decided against the assessee.
Issues Involved:
1. Whether the appellants imported Plastic Injection Moulding Machines (PIMM) in Semi-Knocked Down (SKD) condition or substantial parts of PIMM. 2. Applicability of Rule 2(a) of the General Rules for Interpretation of the First Schedule of the Customs Tariff Act, 1975. 3. Applicability of C.B.E. & C. Circular No. 43/2010-Cus., dated 6-12-2010 to imports made prior to 6-12-2010. 4. Relevance of various judicial decisions cited by the appellants. Issue-wise Detailed Analysis: 1. Importation of PIMM in SKD Condition or Substantial Parts: The appellants were initially importing complete PIMM from China but switched to importing sub-assemblies and parts post the imposition of Anti-Dumping Duty (ADD) by Notification No. 39/2010-Cus., dated 23-3-2010. The Revenue alleged that the appellants were importing essential parts of PIMM to avoid ADD, which as per Rule 2(a) of the General Rules for Interpretation of the First Schedule of the Customs Tariff Act, 1975, should be considered as importing complete machines. The appellants contended that they imported only parts and assembled the machines locally with additional parts procured indigenously or from Taiwan. The Tribunal found that the imported goods included substantial parts of PIMM, such as clamping units, injection units, and base units, while other essential parts like electrical units and hydraulic units were procured locally or from Taiwan. The Tribunal concluded that the imported parts alone did not constitute a complete PIMM, thus, the appellants were not liable to pay ADD as per the Notification. 2. Applicability of Rule 2(a) of the General Rules for Interpretation: The Tribunal examined whether Rule 2(a) could be invoked to classify the imported parts as complete machines for the purpose of ADD. The appellants argued that Rule 2(a) does not apply to ADD notifications, citing various judicial decisions. The Tribunal agreed, stating that Rule 2(a) is intended for classification purposes under the Customs Tariff Act and not for imposing ADD. The Tribunal noted that the ADD notification did not explicitly include parts or SKD/CKD conditions, thus, Rule 2(a) was not applicable. 3. Applicability of C.B.E. & C. Circular No. 43/2010-Cus., dated 6-12-2010: The Tribunal held that the circular, issued after the imports in question, could not be applied retrospectively. The imports occurred before the circular's issuance, and as per the Supreme Court's decision in Suchitra Components Ltd., a circular adverse to the assessee cannot have retrospective effect. 4. Relevance of Judicial Decisions: The Tribunal considered various judicial decisions cited by the appellants, including Philips India Ltd., Plaza Lamps and Tubes Ltd., and Sony India Ltd. These decisions emphasized that ADD notifications should be strictly construed and not extended to parts unless explicitly stated. The Tribunal found these decisions relevant and applicable, reinforcing that Rule 2(a) could not be used to impose ADD on parts not explicitly covered by the notification. Separate Judgments: - The Member (Judicial) held that the appellants imported substantial parts of PIMM and not complete machines, thus not liable for ADD. - The Member (Technical) disagreed, asserting that the appellants imported PIMM in SKD condition to evade ADD, supported by documentary evidence and statements. - The Third Member (Technical) concurred with the Member (Technical), emphasizing that the imported goods had the essential character of complete PIMM and were subject to ADD. Majority Decision: The majority decision, aligning with the Member (Technical) and Third Member (Technical), dismissed the appeals, holding that the appellants imported PIMM in SKD condition and were liable for ADD.
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