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TMI Blog1995 (3) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... of machine but were computer system as defined in para 5(9) of the relevant policy. He also observed that the electronic equipment system, such as, the machine goods would fall under Serial No. 508 of Appendix 3 of the relevant policy. Accordingly, he ordered for the confiscation of the subject goods giving an option to redeem the same on payment of a redemption fine of Rs. 60,000/-. As regards the benefit of Notification No. 179/80, he held that although a certificate has been produced from the Textile Commissioner by the appellants, they failed to establish the status as component of the impugned goods in the Flat Bed Screen Printing Machine being manufactured by the appellants in India. Against that Order of the Deputy Collector of Customs, the appellants filed their appeal before the Collector (Appeals), Bombay, who while upholding the Order of the Deputy Collector remitted the redemption fine of Rs. 60,000/- imposed by the Deputy Collector in full. Hence, the present appeal. 3. Appearing on behalf of the appellants, Shri Sudhir Nandrajog, Advocate, submitted that the appellants were manufacturing Flat Bed Screen Printing Machine under collaboration with M/s. Reggiani Mac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia of the said Flat Bed Screen Printing Machine, and, therefore, forms part of the said Flat Bed Screen Printing Machine. Consequently, the appellants were entitled to import the same under O.G.L. vide Appendix 10(1) of AM 1982-83. It was also claimed by him that since the said component forms part of the said Flat Bed Screen Printing Machine, which according to him falls under Heading 84.40, the intitial setting-up or for the assembly for the manufacture of which they are undertaking, as submitted above, they were entitled to the benefit of concessional rate of duty of customs in respect of the imported goods under Notification No. 179/80, dated 4-9-1980. Attacking the findings of the Collector (Appeals), he submitted that, he failed to appreciate that the said Notification No. 179/80 covers the very parts required for the purpose of initial setting-up or for the assembly or manufacture of any article falling, inter alia under Heading 84.40. It was stressed by him that the Collector (Appeals) whilst accepting that it could not be disputed that the Textile Commissioner had certified that the subject goods, namely, Maccanofilm Programme Computer formed a component part of the Flat B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equire, composite machines consisting of two or more machines fitted together to form a whole and other machines adapted for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function." Heading 84.51/55 reads as follows - "84.51/55. Typewriters, other than typewriters incorporating calculating mechanisms; cheque-writing machines; calculating machines; accounting machines, cash registers, postage-franking machines, ticket issuing machines and similar machines, incorporating a calculating device; automatic data processing machines and units thereof; magnetic and optical readers, machines for transcribing data on to data media in coded form and machines for processing such data, not elsewhere specified or included; other office machines (for example, hectograph or stencil duplicating machines, addressing machines, coin-sorting machines, coin-counting and wrapping machines, pencil sharpening machines, perforating and stapling machines); parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nefit under it, it must be proved that - (1) the goods (parts) imported are required for the purpose of initial setting up or for the assembly or manufacture of any article falling under the Headings mentioned therein; and (2) it must be proved to the satisfaction of the Assistant Collector of Customs to be so required for such setting up, removal or manufacture subject to the condition that the authorities mentioned therein (Textile Commissioner or any officer below the rank of the Assistant Director) is satisfied and certifies in such case that the parts in question are or will be required for the purpose specified above and recommend grant of the above exemption. 6. From the above, it is clear that, the Textile Commissioner or the Assistant Collector has to satisfy and certify that the parts in question are or will be required for the purpose specified above and recommend accordingly. He has nothing to do with the classification of the imported goods (parts) under the Customs Tariff Act and rightly so because that is the exclusive jurisdiction of the Customs Authorities under the Act. To be terse on the point, the jurisdiction to classify the imported goods und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revious imports were cleared not under O.G.L. but against a specific licence is clearly wrong. The appellants cannot be blamed for their belief that the subject goods were eligible for clearance under the O.G.L. Here, I must make another observation. The Bill of Entry, in this case was filed on 8-10-1982. The Show Cause Notice was issued to the appellants on 9-8-1983. The appellants' reply to the Show Cause Notice was within a week of the receipt of the Show Cause Notice. The lower order was issued two months thereafter. The clearance under O.G.L. of the previous import earned a fine of Rs. 60,000/- for the importers and the unwarranted delay on part of the lower authority earned for them not only a demurrage of about Rs. 30,000/- but also the threat from the B.P.T. that the impugned goods were scheduled for auction shortly. While I, uphold the logic of the lower authority, I view with displeasure the inordinate delay in completion of formalities in regard to these good. I, therefore, deem it fit to remit the fine of Rs. 60,000/- imposed by the lower authority in full." 8. The Revenue has not filed any appeal or cross-objection against the said part of the impugned Order-in-A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be coupled with the computer for their positioning on the printing table by servo-motors and guides sliding on racks. A pneumatic locking system sets them most precisely in their working position." 15.1 "Squeegee process entirely interlocked with a micro-processor to provide succession according to the basic parameters selected on the panel of each printing unit". 15.2 It further mentions that "absolutely dependable digital hardware is the technological support for receiving inter-active software by Reggiani Macchine for their Flat Screen Printing Machines of the Rembrandt series". The basic software is able by itself to allow self-repeat setting, printing, cycle programming, continuous single unit printing and sophisticated process diagnosis. 15.3 "Software extension is available also to be interfaced with computerized systems for integrating the printing machine data by planning programs, plant activity and management control........" 16. In view of this pamphlet/catalogue, the appellants' claim could not be lightly brushed aside merely because the imported computer could otherwise be classified on merits under 84.51/55. And it was necessary to examine phy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned brother Shri S.K. Bhatnagar, Vice President as well as Shri G.P.Agarwal, Member (Judicial) have narrated the facts and as such, I need not reproduce the same. Shri Vikram Nandrajog, learned advocate has appeared on behalf of the appellants. He reiterated the facts. The learned advocate pleaded that the appellants had imported one unit of Maccanofilm Programme Computer and had claimed its clearance under O.G.L. vide Appendix 10(1) of AM 1982-83 and had also claimed the benefit of Notification No. 179/80-Cus., dated 4th September, 1980. He further argued that the appellants had claimed assessment under Heading 84.40 which is machinery for washing, cleaning, drying, bleaching, dyeing, dressing and finishing etc., whereas the Revenue has assessed the same under Heading 84.51/55 which is Typewriters, other than typewriters incorporating calculating mechanisms etc.. He argued that the differential duty comes to Rs. 67,306.22. He pleaded that the computer which is in dispute here is an integral part of the machine and it was imported from the collaborator and the computer cannot function independently. He pleaded that computer is an integral part of the machine and falls under O.G. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner Certificate but till now they have not produced any catalogue literature of the machine of which these are claimed components to show the use of this computer in that machine. The leaflet produced does not show the use of this item in the machine. Also the drawings for computer do not have any reference to use of this item with the machine claimed. There are two disputes. First one is regarding ITC angle. In past, importer, himself has got the specific licence and claimed the goods against it. However, now he is claiming under OGL. Second problem is regarding benefit of Notification 179/80. Importer has produced the certificate from Textile Commissioner. However, he has not been able to clearly explain how the goods are components for the end- product claimed. Leaflet/drawing of the end product have not been produced so far." 22. I have perused the order passed by the Collector (Appeals). Relevant extracts from the order on the classification aspect are reproduced below :- "The dual issue raised by the appellants has to be settled only on identification of the character of the impugned goods. The description in the Bill of Entry is "one unit" Maccanofilm Progra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n para 6 of his order, Member (Judicial) has held that the appellants are not entitled to the benefit of Notification No. 179/80-Cus., dated 4-9-1980. For proper appreciation of the legal position, Tariff Headings 84.40 and 84.51/55 are reproduced below :- "84.40 - Machinery for washing, cleaning, drying, bleaching, dyeing, dressing, finishing or coating textile yarns, fabrics or made-up textile articles (including laundry and dry-cleaning machinery); fabric folding, reeling or cutting machines; machines of a kind used in the manufacture of linoleum or other floor coverings for applying the paste to the base fabric or other support; machines of a type used for printing a repetitive design, repetitive words or overall colour on textiles, leather, wall-paper, wrapping paper, linoleum or other materials, and engraved or etched plates, blocks or rollers therefor : (1) Not elsewhere specified (2) Domestic washing machines, laundry and dry-cleaning machinery." "84.51/55 - Typewriters, other than typewriters incorporating calculating mechanisms; cheque-writing machines; calculating machines; accounting machines, cash registers; postage-franking machines, ticket issuing machi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication and for claiming the benefit under it, it must be proved that - (1) the goods (parts) imported are required for the purpose of initial setting up or for the assembly or manufacture of any article falling under the Headings mentioned therein; and (2) it must be proved to the satisfaction of the Assistant Collector of Customs to be so required for such setting up, removal or manufacture subject to the condition that the authorities mentioned therein (Textile Commissioner or any officer not below the rank of the Assistant Director) is satisfied and certifies in each case that the parts in question are or will be required for the purpose specified above and recommend grant of the above exemption. 27. A perusal of Notification No. 179/80-Cus., dated 4-9-1980 shows that the benefit is only available if the goods imported fall under Heading 84.40. Since I have upheld the classification under Heading 84.51/55 which does not find place in the notification and as such, the question of extending the benefit of Notification No. 179/80-Cus., dated 4-9-1980 does not arise at all. Now, coming to the ITC angle, the appellants' main plea is that the goods are covered under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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