1988 (3) TMI 313 - AT - Central Excise

Summary

Issues: Classification of imported goods under Customs tariff headings, inclusion of automatic lubricating system and diamond rollers as parts of the machine, imposition of fine in lieu of confiscation.

Classification of Imported Goods: The case involved the classification of imported goods under Customs tariff headings. The appellants contested the classification of various items, including two diamond rollers, a copying template, a grinding work blade, a hydraulic dressing, a diamond crushing device, and an automatic central lubrication system. The appellants argued that the diamond rollers were essential for specific grinding arrangements and were supplied with the machine as per the supplier's quotation. The automatic lubricating system was claimed to be necessary for the machine's operation to prevent damage to vital parts. The appellants maintained that these items should be considered integral parts of the machine and classified accordingly.

Inclusion of Automatic Lubricating System: The appellants asserted that the automatic central lubricating system was indispensable for the machine's functionality, as acknowledged by the Deputy Collector. They contended that the system was installed in place of the standard lubrication system and should be treated as an essential part of the machine. Despite being separately invoiced, the appellants argued that the lubricating system should not be excluded from the machine's classification under the relevant tariff heading. On the contrary, the department argued that the lubricating system was not a standard part and was supplied separately based on mutual agreement between the buyer and seller.

Imposition of Fine: The appellants sought the remission of a fine imposed in lieu of confiscation on the imported goods due to a lack of proper licensing. The department's counsel highlighted that certain concessions had already been granted by the original authority, even though they were deemed undeserved. The department contended that the automatic lubricating system, along with other disputed items, were not standard parts of the machine and were supplied at the importers' request, leading to separate invoicing. The Assistant Collector emphasized that the goods were not compulsorily supplied with the machine and were invoiced separately, indicating their non-standard nature.

Judgment: The tribunal upheld the decision of the Deputy Collector and the Appellate Collector, denying the appeal of the appellants. The tribunal agreed with the department's argument that the disputed items, including the automatic lubricating system and diamond rollers, were not standard parts of the machine and were separately invoiced due to their non-essential nature. The tribunal found the logic presented by the department to be convincing, emphasizing that separate invoicing indicated the non-standard status of the items. Ultimately, the tribunal concluded that there was no basis for interference in the decision of the lower authorities and rejected the appeal, affirming the classification and imposition of the fine.