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Issues: Classification of imported goods under Customs Tariff Act, 1975; Condonation of delay in filing supplementary appeal; Dispute regarding basic customs duty and countervailing duty.
The judgment by the Appellate Tribunal CEGAT, New Delhi involved the classification of imported goods under the Customs Tariff Act, 1975. Initially, an application for condonation of delay in filing a supplementary appeal was considered and allowed by the Tribunal. The main issue revolved around the classification of connecting rod forgings of aluminum imported by the appellants, who were manufacturers of motorcycles. The department had assessed the goods under Heading 84.06 for Internal Combustion Piston Engines and Heading No. 87.09/12(1) for motor-cycles and parts thereof. The department argued that the goods had already attained the essential character of finished parts of motor-cycle engines, thus should be classified accordingly. However, the appellants contended that the goods had not reached the essential character of finished parts as they required further manufacturing operations. They sought re-assessment under Heading 76.08/16 as articles of aluminum. The Tribunal considered the samples of the imported goods and those after post-importation operations, concluding that the goods were only rough forgings and had not attained the proximate shape of finished connecting rods. The department relied on a larger Bench judgment in BHEL's case regarding interpretative Rule 2(a) of the Customs Tariff Act, arguing that the goods had acquired the proximate shape of finished connecting rods and should be classified as such. However, the Tribunal found that each case must be decided based on its own facts and determined that the imported forgings were only rough forgings of aluminum. The Tribunal distinguished the case of Sri Rama Vilas Service Limited, emphasizing that the appellants had declared the goods as aluminum forgings for connecting rods, not as components or connecting rods. Consequently, the Tribunal upheld the appellants' classification under Heading 76.08/16 for basic customs duty. Regarding countervailing duty, a dispute arose in four appeals concerning the classification under Item No. 27(b) of the Central Excise Tariff for "shapes and sections" of aluminum. The appellants argued that the goods could not be considered as shapes and sections, but acknowledged the earlier Tribunal's order against them. The Tribunal agreed that the countervailing duty was correctly charged on the imported forgings, which had been shaped through die-forgings. Ultimately, the appeals were allowed concerning basic customs duty, but rejected regarding countervailing duty.
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