1994 (7) TMI 377 - AT - Customs

Issues Involved:

1. Correct description of the goods.
2. ITC (Import Trade Control) angle.
3. Classification of the imported machine.
4. Eligibility for the benefit of Notification No. 114/80-Cus.
5. Whether the import was covered by OGL (Open General Licence).
6. Liability of the goods to confiscation and the imposition of penalty.

Detailed Analysis:

1. Correct Description of the Goods:

The appellants imported a "Chambon Web-fed Offset Rotary Printing Machine having output of more than 35,000 composite impressions per hour." The machine's configuration included various components such as an automatic non-stop unwind, web offset printing appliance, infrared dryer, cutting units, DCP platen cutter/creaser, and a complete set of electronic and control equipment. The appellants declared the machine as a printing machine in the Bill of Entry and other documents. The Tribunal found that the appellants had described the goods correctly and completely in the Bill of Entry and other main documents at the time of importation.

2. ITC Angle:

The main dispute was whether the machine was eligible for import under OGL Appendix I Part B, which covers web-fed high-speed offset rotary printing machines having output of more than 35,000 composite impressions or copies per hour. The adjudicating authority alleged that the appellants misdeclared the machine to circumvent ITC regulations. However, the Tribunal concluded that the machine was covered by OGL entry 2(22) of the 1988-91 Policy, as the principal function of the machine was printing.

3. Classification:

The appellants claimed classification under Heading 84.43 as a printing machine, while the Revenue classified it under Heading 84.79 as a machine having individual functions not specified elsewhere. The Tribunal held that the principal function of the machine was printing, and thus, it should be classified under Heading 84.43. The Tribunal referred to Section Note 3 of Section XVI, which states that composite machines are to be classified according to their principal function. Since the principal function was printing, the machine was correctly classifiable under Heading 84.43.

4. Benefit of Notification No. 114/80-Cus:

The appellants claimed the benefit of Notification No. 114/80-Cus., which provides exemption for specified machines used in the printing industry. The notification covers web-fed high-speed offset rotary printing machines with an output of more than 30,000 copies per hour. The Tribunal concluded that the imported machine, being a printing machine with an output exceeding 35,000 copies per hour, was eligible for the benefit of the notification. The addition of the DCP platen cutter/creaser did not disqualify the machine from the exemption.

5. Whether the Import was Covered by OGL:

The Tribunal held that the import was covered by OGL, as the machine met the description provided in Appendix I Part B of the 1988-91 Import-Export Policy. The machine was a web-fed high-speed offset rotary printing machine with an output of more than 35,000 composite impressions per hour, which is listed under OGL.

6. Liability to Confiscation and Penalty:

The adjudicating authority had ordered the confiscation of the machine and imposed a penalty of Rs. 10,00,000/- under Section 112 of the Customs Act, 1962, alleging misdeclaration and intent to evade duty. However, the Tribunal found that the appellants had not misdeclared the goods and that the machine was correctly described and classified. Consequently, the Tribunal set aside the order of confiscation and the imposition of the penalty, allowing the appeal with consequential relief to the appellants.

Conclusion:

In conclusion, the Tribunal held that the imported machine was correctly described and classified under Heading 84.43, covered by OGL, and eligible for the benefit of Notification No. 114/80-Cus. The order of confiscation and penalty was set aside, and the appeal was allowed with consequential relief to the appellants.

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