1992 (7) TMI 177 - AT - Customs

Summary

Issues Involved:
1. Eligibility of bearing components (cups) for concessional rate of duty under Sl. No. 6(c) of Notification 70/89-Cus.
2. Correct assessable value of the imported bearing components (cups).

Detailed Analysis:

1. Eligibility for Concessional Rate of Duty:
The appellants imported 10,000 pieces of bearing components (cups) and claimed classification under 8482.99 of the Customs Tariff Act, 1975, seeking the benefit of concessional assessment under Sl. No. 6(c) of Notification 70/89-Cus. The Customs authorities initially did not clear the goods, leading the appellants to file a writ petition in the Bombay High Court, which permitted provisional clearance. The Supreme Court later directed the Customs authorities to issue a show cause notice and adjudicate the matter. The Assistant Collector of Customs issued a show cause notice proposing the denial of the concessional assessment benefit under Sl. No. 6(c) and suggested the goods should be classified under Sl. No. 6(a) of the same notification, which applies to "cups and cones of roller bearings."

The appellants contended that Sl. No. 6(a) would cover only imports of both cups and cones together, while Sl. No. 6(c) applies to "others" and attracts a duty rate of 150% ad valorem. The Department argued that the word "and" in Sl. No. 6(a) should be interpreted to mean that both items enjoy the same facility whether imported together or not.

The Tribunal examined the language of the notification and concluded that the word "and" should not be read as "or." Cups and cones are separate entities and should be interpreted in their ordinary natural sense. The Tribunal referred to previous judgments and statutory interpretation principles, emphasizing that if the words of the statute are precise and unambiguous, they should be interpreted in their ordinary sense.

The Tribunal held that the imported cups do not fall within the coverage of "Cups and Cones" under Sl. No. 6(a) but within "others" under Sl. No. 6(c). Therefore, the appellants are entitled to the benefit of concessional assessment under Sl. No. 6(c) of Notification 70/89-Cus.

2. Correct Assessable Value:
The Collector of Customs had enhanced the invoice value of the imported cups significantly, invoking Rule 8 of the Customs Valuation Rules, 1988, on the basis that the transaction value did not reflect the correct assessable value. The appellants argued that the invoice value represented the transaction value and should be accepted under Rule 4 of the Customs Valuation Rules.

The Tribunal found that the Collector compared unbranded bearings with branded ones and goods of different countries of origin, which is not a valid comparison. The determination of the value based on a 30:70 ratio for cups and cones was also found to be without basis. The Tribunal concluded that the assessable value determined by the Collector was erroneous and should be discarded.

The Tribunal held that the invoice value should be accepted as the transaction value under Section 14(1) of the Customs Act, 1962.

Conclusion:
The Tribunal set aside the impugned order and allowed the appeal, holding that the imported goods are eligible for the benefit of concessional assessment under Sl. No. 6(c) of Notification 70/89-Cus., and that the invoice value is to be accepted as the value of the goods under Section 14(1) of the Customs Act, 1962.