2023 (11) TMI 1087 - AT - Customs

Levy of ADD - import of horizonal plastic injection moulding machines in the guise of parts and components - rejection declared classification of the imported goods under CTI 8477 9000 / 7318 1100 - to be classified under CTI 8477 1000 for the purpose of assessment and levy of ADD or not - HELD THAT - In the case in hand, the imported goods were not presented by the appellant in un-assembled condition as alleged by the department for the purposes of convenience of packing or handling or transportation. Rather, the post importation activities do not merely involve assembly of the imported goods, but involved procurement of the essential components/parts for ultimate manufacture of PIMM in India, the facts of which have also been endorsed by the Chartered Engineers in their respective certificates (referred supra). The process involved for completion of the manufactured goods since, have taken place post importation of the goods in question, the provisions of Rule 2(a) of GIR shall not be applicable for change in classification of the imported goods and to bring such goods under the purview of Rule 9A ibid, for the purpose of levy of ADD thereon. It is concluded that the appellants herein had not imported the complete PIMM in order to fall within the purview of the notification(s) referred supra for levy of ADD. In this case, admittedly since the PIMM, complete in all respects was manufactured in India by using the domestically procured goods also, such imported equipment, should not be subjected to levy of ADD. Therefore, the adjudged demands confirmed in the impugned order cannot be sustained for judicial scrutiny. Since, manufacturing activity undertaken by the appellants and payment of Central Excise duty on such activity was acknowledged and not disputed by the jurisdictional Central Excise authorities, the same cannot be questioned by the Customs department without any clinching evidence that such machine in question was imported into India as such or in un-assembled condition, and no further activities were undertaken thereto to complete the process of manufacture and installation etc. There are no merits in the impugned order, insofar as it has confirmed the adjudged demands on the appellants. Therefore, by setting aside the impugned order, the appeals (excepting Appeal No. C/85991/2017) are allowed in favour of the appellants - appeal allowed.

Issues Involved:
1. Classification of imported parts of Plastic Injection Moulded Machines (PIMM).
2. Applicability of Anti-Dumping Duty (ADD) on imported parts.
3. Validity of the investigation and findings by the Customs Department.
4. Reliance on expert opinions and certificates.
5. Legal interpretation of notifications and provisions under the Customs Tariff Act.

Summary:

1. Classification of Imported Parts of PIMM:
The appellants argued that the imported parts of PIMM should be classified individually and independently as per Section Note 2 to Section XVI of the Customs Tariff Act, 1975 read with Rule 1 of the General Rules for the Interpretation (GIR). They contended that Rule 2(a) of GIR, which applies to assembly operations, should not be applicable as extensive manufacturing activities were involved. The Tribunal noted that the classification should be determined according to the terms of the headings and any relative Section or Chapter Notes, and Rule 2(a) should not be applied if the classification is possible under Rule 1.

2. Applicability of Anti-Dumping Duty (ADD) on Imported Parts:
The Tribunal observed that the Directorate General of Anti-Dumping and Allied Duties had recommended the imposition of ADD on complete plastic processing or injection moulding machines (PIMM) originating from China PR, but not on parts or components of PIMM. The Tribunal emphasized that the notifications issued by the Ministry of Commerce & Industry and the Ministry of Finance intended to levy ADD on complete machines, not on parts imported for manufacturing the machines domestically. The Tribunal referred to the case of Anchor Daewoo Industries Ltd., where it was held that ADD is applicable only on the notified goods and not on parts.

3. Validity of the Investigation and Findings by the Customs Department:
The Customs Department alleged that the appellants imported complete PIMM in the guise of parts and components to evade ADD. The Tribunal found that the appellants had imported certain components and procured others domestically to manufacture PIMM. Expert opinions and certificates from IIT Professor and Chartered Engineers confirmed that the imported goods alone could not constitute a complete PIMM without the domestically procured parts. The Tribunal concluded that the Customs Department's findings were not substantiated with sufficient evidence.

4. Reliance on Expert Opinions and Certificates:
The Tribunal gave due importance to the expert opinions and certificates provided by the appellants, which were ignored by the adjudicating authority. The Tribunal referred to the judgment in Konkan Synthetic Fibre, emphasizing that expert opinions in the field should not be ignored and should be given due importance.

5. Legal Interpretation of Notifications and Provisions under the Customs Tariff Act:
The Tribunal highlighted that the scheme under Section 9A of the Customs Tariff Act, 1975, read with the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, is for a particular article identified by the Designated Authority. The Tribunal concluded that the imported parts did not fall within the scope of the notifications for ADD, as the investigation and notifications were specific to complete PIMM.

Conclusion:
The Tribunal set aside the impugned order, concluding that the appellants had not imported complete PIMM and the imported parts were not liable for ADD. The appeals were allowed, except for the appeal that abated due to the appellant's death.

← Previous Next →