2016 (11) TMI 1147 - AT - Customs

Confiscation of imported goods - second hand machine - requirement of licence for import and clearance of the same - Held that - Even though the part of the second hand machine were imported at JNPT, Nahva Sheva and part imported at New Customs House, Mumbai Port that will not make both the consignment as separate consignment. In terms of Interpretation Rule 2(a), if complete machine is presented unassembled or disassembled, it has to be classified under classification of particular machine and not as parts. In the present case even though the second hand machine has been imported and cleared from two different ports but both consignments put together comprises of one second hand machine which in my view covered in this Rule 2(a) of General Rules for Interpretations therefore the present consignment has to be classified under classification of machine and not as a part, if it is so then no licence is required for clearance of such goods. The adjudicating authority in his findings has contended that since goods were imported at different port and different time therefore it has to be assessed differently in the form as presented at respective port. I do not agree with the Adjudicating authority on this point for the reason that irrespective whether it is imported at different date at different port but it is undisputed that both the consignment put together comprises of single machine and it is observed that in the present case common purchase order which is complete into two invoices, purchase order value as well as invoices value tallies, even the time of import also not much different because at Nhava Sheva the Bill of Entry was filed on 4/5/2006 and at New Custom House, Mumbai the present Bill of Entry was filed on 22/5/2006 therefore irrespective of fact that both the consignment were imported on different port at different time will not change the classification of a whole machine. Consignment in the present appeal is nothing but part and parcel of the machine as a whole and could not be classified and assessed as independent part hence no licence is required, accordingly confiscation is set aside. Appeal is allowed

Summary

Issues:
1. Confiscation of imported capital goods parts due to lack of import license for second-hand machine.
2. Classification of imported parts as individual parts or part of a complete machine.
3. Interpretation of General Rules for Interpretations regarding classification of unassembled machines.
4. Disagreement between the appellant and the adjudicating authority on the classification of the imported consignment.

Analysis:
1. The appeal challenged the confiscation of parts of capital goods imported without a license for a second-hand machine. The Commissioner of Customs had confiscated the goods citing the need for a license for the import of parts of a second-hand machine. The appellant argued that the imported consignment was part of a complete machine ordered and imported as a single unit, thus not requiring a separate license for the parts.

2. The appellant contended that the consignment imported, although at different ports and times, was part of a single second-hand machine ordered as a whole. The appellant emphasized that the consignment should be classified as a machine and not as individual parts, as it was part and parcel of the entire machine. The adjudicating authority, on the other hand, maintained that the consignment needed a license as it was considered parts of a machine.

3. The Tribunal analyzed the purchase order and invoices of both consignments to establish that it was indeed one consignment of a second-hand machine. Referring to Interpretation Rule 2(a), the Tribunal concluded that when a complete machine is presented unassembled, it should be classified as a particular machine and not as parts. The Tribunal found that despite being imported at different ports and times, the consignments together comprised a single machine, thus falling under the classification of a machine rather than individual parts.

4. The Tribunal disagreed with the adjudicating authority's assessment that the consignment should be treated as separate parts due to being imported at different ports and times. The Tribunal emphasized that regardless of the import locations and dates, the consignments collectively constituted a single machine, as evidenced by the common purchase order and matching invoice values. Therefore, the Tribunal set aside the confiscation, ruling that the consignment was part and parcel of the machine as a whole and did not require a separate license for clearance. The appeal was allowed, overturning the confiscation decision.