2016 (11) TMI 1267 - AT - Customs

Confiscation of imported goods - imported goods are parts of second hand machine therefore it requires licence for import and clearance of the same - Held that - I find that purchase order in comparison with the invoices of both the consignment, it clearly established that it is one consignment of second hand machine which has been ordered by the importer and imported accordingly. 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 - irrespective of fact that both the consignment were imported on different port at different time will not change the classification of a whole machine. As per my above discussion, I am of the view that 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 allowed - decided in favor of appellant-importer.

Summary

Issues:
1. Confiscation of imported goods for lack of import license.
2. Classification of imported goods as parts of a machine or a complete machine.
3. Interpretation of General Rules for Interpretation in customs classification.

Confiscation of Imported Goods:
The appeal challenged the Order-in-Original confiscating parts of capital goods imported without a license. The adjudicating authority contended that the imported goods, being parts of a second-hand machine, required a license for import and clearance. The appellant argued that the consignment was part of a complete machine ordered from the supplier, and thus, should not be treated as individual parts but as part of the entire machine. The appellant claimed that since the consignment was not separate, no license was needed for import at the Custom House, Mumbai port.

Classification of Imported Goods:
The appellant maintained that the consignment was a single second-hand machine ordered and imported as one set, despite being imported from different ports due to logistics issues. The Assistant Commissioner for the Revenue argued that the consignment should be assessed independently as parts of a machine, necessitating an import license. The Tribunal analyzed the purchase order and invoices, concluding that both consignments formed one second-hand machine, falling under the classification of a complete machine rather than individual parts. The Tribunal referred to Interpretation Rule 2(a) to determine the classification, emphasizing that the consignment should be treated as a whole machine, not separate parts.

Interpretation of General Rules for Interpretation:
The Tribunal rejected the adjudicating authority's view that different ports and times of import necessitated separate assessment, emphasizing that both consignments together constituted a single machine. The Tribunal highlighted that despite being imported at different times and ports, the consignments were part of a common purchase order and invoices, reflecting a single machine. Based on the analysis, the Tribunal ruled that the consignment was part and parcel of the machine as a whole, not individual parts, and thus, no license was required for clearance. Consequently, the confiscation was set aside, and the appeal was allowed.