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TMI Blog1996 (7) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... d (b) of the Customs Act, 1962 respectively. However, redemption was allowed on payment of separate amounts as fine in regard to each Bill of Entry. Six containers were also confiscated, allowing redemption on payment of fine quantified. Differential duty was demanded. Penalty of Rs. 10 lakhs was levied on each of the two importing concerns and also on Shri Prahlad Singh Chadha, common partner of the two concerns. The Collector further directed that if the duty is not paid, the Bank Guarantee furnished shall be encashed. There was mis-declaration of quantity and description as also inadequate description. 2. The imports are governed by 1992-97 Policy, as it existed in 1992-93. Para 22 of Chapter V of the Policy states that capital goods, raw materials, intermediates, components, consumables, spares, parts accessories, instruments and other goods may be imported without any restriction except to the extent such imports are regulated by the Negative List of imports or any other law for the time being in force. According to paragraph 7(10) of Chapter III of the Policy, "components" means one of the parts of a sub-assembly or assembly of which a manufactured product is made up an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the expression "consumer goods" was not defined in the Policy and the expression means goods which directly satisfy human wants and goods which are so sophisticated that they require technological skill or scientific knowledge for their operation or use cannot be regarded as goods that satisfy human wants directly. The photo copier was costing Rs. 1 lakh and not an item of domestic use but employed in large offices or institutions. Accordingly it was held that the photo copier of this model could not be classified as consumer goods and could be imported under OGL. This case was decided at a time when "consumer durables" were not brought, by definition, within the purview of the expression "consumer goods", but the definition adopted by the Tribunal was broadly similar to the definition under consideration by us, except regarding the inclusion of "consumer durables". 4. Indian Airlines v. Collector of Customs - 1988 (38) E.L.T. 679 (Tribunal) was decided by a larger Bench of the Tribunal. The import was of Aeroplane tyres for servicing by the importer who had a fleet of aeroplanes. The importer claimed exemption under Notification No. 99/81 which replaced Notification No. 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appendix, could be imported under OGL. The heading of List 8 which came under OGL was "Raw materials, components and consumables". According to the appellant, the lamps were components of street lighting system and can be used only with a ballast, ignitor and capacitor and hence cannot be regarded as consumer goods. Department contended that the lamps were "consumer goods" attracting serial No. 93 of Appendix 4. The Tribunal held that "components" means one of the parts that has to be assembled and the Policy, requires that the component should be one of the parts of a manufactured product, that the lamps were not used for the purpose of manufacturing a product, but were to be used in street lighting with other accessories and fittings and they cannot be regarded as "component" within the meaning of paragraph 5(1). It was also held that Sodium lamps satisfy human need of electrification without any further processing to the bulbs themselves though they may require a ballast or a capacitor and are finished goods known in the trade parlance as Sodium Vapour Lamps and are to be treated as "consumer goods". The three-Member Bench indicated the fact that the goods were not capable of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concessional rate of Sales Tax applicable to "raw materials (inputs)". It was held :- "Raw material is not defined in the Act. It has, therefore, to be understood in the ordinary and well-accepted connotation of it in the common parlance of the persons who deal with it. The ordinary common sense understanding of it is that it is something from which another new or distinct commodity can be produced................. An item may be raw material for manufacturing goods 'A' and the goods so produced may itself be raw material for goods 'B'. For instance, batteries, tyres and tubes are by themselves finished products. But when it is used for manufacture of vehicle then it becomes raw material for it as it is essential and necessary for producing the goods in which it has been used. No vehicle can operate or work nor can it be said to have been produced unless tyres, tubes, batteries are fixed to it. Use of these items is integrally connected with the ultimate product. They retain their identity in the end product. The Notification applies to any goods used in the manufacture. Since the Notification was issued under Section 13(1)(b), any goods which could be included in the expression ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be used directly for satisfying human needs following the decision in Colour Chem Limited, the goods were covered specifically under Appendix 3 Part A and Appendix 6, List 8, Part I and as such, the same were excluded from the purview of serial No. 165 of Appendix 2, Part B of the Policy and there was no restriction for importing the goods under OGL and department was not correct in holding that the goods were not covered by valid import licence. 13. The dispute is whether Car Tyres, Auto fans (to be fitted in car cabin), Halogen Lamps (bulbs) are "consumer goods"? Learned counsel for appellant agrees that car coolants (liquid used to keep engine cool) are consumer goods. There is also no dispute that Car Tyres, Auto fans and Halogen Lamps are consumption goods. The question for consideration is whether these goods are consumer durables or whether they directly satisfy human needs without further processing as contemplated in the 1992-97 Policy as it was originally issued. We notice that with effect from June 1992, the definition of "consumer goods" in the Policy was amended so as to include "accessories, components, parts or spares of such consumer durables." The contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not used for the purpose of manufacturing any product but were used in street lighting with other accessories and fittings which took them out of the category of components and brought them within the category of "consumer goods". The lamps as such were to be used in street lights, of course, with some accessories. Therefore, it was held that they directly satisfy human needs for electrification without further processing. In other words, the fact they required to be fitted with or to some other items did not have any significance. Similar is the view of High Court of Bombay in United Breweries Ltd. case - 1994 (53) ECR 13. Many of the decisions emphasised the aspect of requirement of "further processing" for direct satisfaction of human needs. Dripless Faucets (India) - 1995 (77) E.L.T. 183 (Tribunal) = 1995 (57) ECR 567 (Tribunal) dealt with a component of a water tap. The two decisions dealing with Tyres did not consider the question whether tyres can be regarded as consumer goods. Therefore, the reported decisions are not of much assistance. 15. As indicated by the Supreme Court in Tata Engineering and Locomotive Company Ltd. case - 1994 (74) E.L.T. 193, tyres, by them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are consumer goods and are, therefore, not importable under OGL except to the extent specifically provided. Specific provision covers only tyres of bus and lorry and not of car. We, therefore, hold that tyres of car are not importable under OGL. Halogen Lamps Halogen Lamps imported are to be fitted to cars. Halogen Lamps are finished products and even without being fitted to cars are capable of directly satisfying human needs without further processing. Therefore, the Collector was justified in regarding Halogen Lamps as consumer goods. Auto Fans Auto fans are also finished goods which are directly capable of satisfying human needs even without being fitted to vehicles. They do not require further processing for satisfying human needs. The Collector was, therefore, justified in regarding Auto Fans as consumer goods. Car Coolants Learned counsel did not contend that car coolants should not be regarded as consumer goods. We agree with the view taken by the Collector that car coolants are consumer goods. 16. Adjudicating authority has indicated that in regard to various items, there has been inadequate or improper description or mis-description and mis-decla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntended that the import documents are not required contained specification and brand name and the absence of such particulars does not amount to mis-description. The proforma prescribed for Bill of Entry requires furnishing of various particulars, including, country of origin and "Goods". "Goods" obviously refers to description of goods, which means, adequate description. In our opinion, description is complete and adequate if it refers to correct specification, brand name and other particulars referred to in the proforma. In regard to some of the imported goods country of origin is not declared or not correctly declared. In regard to major items, the quantity declared was found to be erroneous. 18. In regard to valuation, learned counsel for appellant contended that transaction value as shown in the invoice has some sanctity and the burden is on the department to collect evidence to show that the invoice value is not genuine or below ordinary price in international trade at the time and place of import and no such reliable evidence has been produced in this case. This proposition cannot be applied to cases of import where description is substantially inadequate, incomplete o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouse shall make a percentage examination of the goods to check whether the goods are in accordance with the Declaration and conform to the Import Licence. Such goods shall be approved for onward transmission and transported from the Custom House to the border port in closed railway wagons or in pilfer-proof containers that can be securely locked and the same shall be locked and sealed. The goods shall be covered by an insurance policy and/or such undertaking. The Policy shall be for an amount equal to the Indian Customs Duty and the amount shall become payable to the Collector in the event of the goods not reaching Nepal. Custom House shall endorse all copies of Declaration. On arrival of goods at the border railway station, the sealed wagon or container shall be presented to the Indian Customs Officer at the station who shall examine the locks and seals and if satisfied, permit the unloading under his supervision. Other formalities prescribed have to be followed. 20. Thus it is seen that valuation by Calcutta Custom House of goods in transit to Nepal is only to provide for the contingency of the goods not reaching Nepal, i.e. of the goods being sold or used in India. The amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd to be consistent with the description "Switch suitable for National Evaporator". This casual statement was made in the midst of discussion regarding valuation and is not supported by any other record. Regarding LOWER/UPPER HOUSING WITH FRONT GRILL AND BLOWER MOTOR WITH WHEELS, the impugned order itself states that the description does not directly conform to the description of the items covered by the compared invoices. In these circumstances, the imported items are not seen to be similar to the goods covered by the compared invoices. Hence, the value determined for these items is not sustainable. 22. DRAIN HOSES, BRACKET WITH SCREW, BLOWER MOTOR WITH WHEELS and DRYERS The import documents to not contain specification or Brand name. They were declared to be automotive parts. They were found to be parts of Car Air-Conditioners. The Collector did not have any documentary evidence on the basis of which correct value could be arrived at. He determined the value "based on pro-rata ratio of under-invoicing of other items, keeping in mind the market value of the items." The basis adopted has no support of law. There can be no presumption in law that if an item is shown to be und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ector to do so. It is not shown that there was any significant price fluctuation during the interval. In these circumstances, we find no ground to interfere with the values determined by the Collector. 26. FAX MACHINES There is mis-description in regard to each of the machines as could be seen from the chart given earlier. Manufacturer's price list or invoice has not been produced in spite of being called upon to do so. The three models and prices declared were as follows :- PARA FAX S $ 250 per unit UF 102-7 (10 pieces) (Rs. 4750.00) PARA FAX S $ 400 per piece CANNON-270-s (20 pieces) (Rs. 7600.00) PARA FAX S $ 300 per piece MURATA - F1 (10 pieces) (Rs. 5700.00) The alleged comparable import relied by the Collector was of 5 pieces of "FACSIMILE TRANSEIVER MACHINE MODEL 270S" at US $ 700 (Rs. 22012.58 approximately). These goods were also of Japanese origin shipped from Singapore. The appellant's contention that the item covered by the relied on invoice was not identical or similar to "PARAFAX CANNON -270S" imported in this case is not correct. CANNON is only a Brand name. The items can be regarded as similar, though not identical. However, the Collector was in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cription and quantity in many cases as found by the Collector. (c) The value determined of Car Tyres, Brake Shoe and Halogen Lamp, Clutch Assembly on the basis of Nepal invoices was not lawful. Value of these items has to be determined afresh. (d) Value of Lower/Upper Housing with Front Grill, Switch with Harness, Drain Hoses, Screw, Blower Motor with Wheels, Dryers, Heat Exchanger, Mini Horns with Valve, Gummed Paper, Auto Fans and Car Coolant as determined by the Collector is set aside. Value has to be determined afresh. (e) Value determined of Tools by the Collector is confirmed. (f) Value of Para Fax UF 102-7 is reduced to Rs. 20,000.00 per unit. (g) Value of Para Fax Cannon-270-S is reduced to Rs. 20,000.00 per unit. (h) Value determined of Para Fax Murata F1 is confirmed. 29. The above findings will necessitate the passing of a fresh adjudication order. In this view, we set aside the impugned order and remand the cases to the jurisdictional Commissioner for fresh disposal in accordance with law and the findings in this order. If the Commissioner desires to rely on further material to assess the correct value of goods whose value is not concluded by this order, he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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