1989 (11) TMI 164 - AT - Customs

Issues Involved:
1. Assessment of Customs duty on imported plant and machinery.
2. Claim for refund of excess duty paid.
3. Classification of machinery under Customs Tariff Item 72(17) as 'metal working machinery'.
4. Applicability of Notifications No. 117/65 and No. 104/66.
5. Validity of assessments made by the Assistant Collector of Customs.
6. Interpretation of 'metal working machinery' and its scope.

Detailed Analysis:

1. Assessment of Customs duty on imported plant and machinery:
The appellant imported a complete plant for manufacturing Cast Iron Spun Pipes in 22 shipments over three years. The Assistant Collector of Customs initially assessed the duty provisionally, subject to final reconciliation. The appellant claimed a refund of Rs. 15,90,023 after deducting an already refunded amount of Rs. 50,764.

2. Claim for refund of excess duty paid:
The appellant filed a reconciliation statement showing excess duty paid and sought a refund. The Assistant Collector issued a refund of Rs. 50,764 but did not provide a detailed order. The appellant's appeal to the Appellate Collector was rejected for lack of a speaking order. The High Court directed a de novo enquiry, which resulted in the Assistant Collector rejecting the refund claim again, stating that the machinery did not qualify as 'metal working machinery' under Item 72(17) ICT.

3. Classification of machinery under Customs Tariff Item 72(17) as 'metal working machinery':
The Assistant Collector and the Collector of Customs (Appeals) both rejected the appellant's claim, stating that the machinery used in the production of cast iron spun pipes did not fall under 'metal working machinery' as defined in Item 72(17) ICT. The appellant argued that the entire plant and machinery should be classified under this item, supported by various technical references and expert opinions.

4. Applicability of Notifications No. 117/65 and No. 104/66:
The appellant contended that the imported goods were entitled to a duty rate of 10% ad valorem under Notification 117/65. The Collector of Customs (Appeals) held that Notification 117/65 was automatically cancelled by Notification 104/66. However, the appellant argued that the proviso to Notification 104/66 preserved the applicability of Notification 117/65.

5. Validity of assessments made by the Assistant Collector of Customs:
The appellant challenged the validity of the assessments, arguing that the classification was improperly delegated to Appraisers and not made by the competent authority. They also claimed that the assessments were not in accordance with the relevant provisions of the Customs Act, rendering the orders illegal.

6. Interpretation of 'metal working machinery' and its scope:
The appellant provided extensive technical literature to support their claim that the machinery used in the manufacture of cast iron spun pipes should be classified as 'metal working machinery'. The Collector of Customs (Appeals) and the Assistant Collector had a narrower interpretation, excluding machinery working on molten metal from this classification.

Tribunal's Findings and Directions:

Assessment of Customs duty and refund claim:
The Tribunal found that the machinery used in the forming process of manufacturing cast iron spun pipes, including those working on molten metal, should be classified as 'metal working machinery'. This classification entitles the appellant to duty concessions under Item 72(17) ICT.

Applicability of Notifications:
The Tribunal accepted the appellant's argument that Notification 117/65 was not annulled by Notification 104/66 due to the proviso preserving the earlier notification's applicability.

Validity of assessments:
The Tribunal directed the Assistant Collector to re-examine the classification and ensure that machinery qualifying as 'metal working machinery' under Units II, III, and IV receives concessional assessment. Units I and V did not qualify for the concession.

Conclusion:
The Tribunal set aside the impugned order and remanded the matter to the Assistant Collector for a fresh order, ensuring that the concession is granted to machinery used in the forming process of cast iron spun pipes. The Assistant Collector was directed to provide a reasonable opportunity for the appellant to present their case and to ensure accurate classification without artificial division of machinery units.

Final Order:
The appeal was allowed by remand, directing the Assistant Collector to reassess the machinery in light of the Tribunal's findings and provide the appropriate duty concessions.

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