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TMI Blog1998 (9) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... y Collector of Customs. 3. Briefly, the issue involves import of 2 sets of CAT scan system, allegedly in SKD/CKD condition under two Bills of Entry, each involving a declared value of Rs. 70,96,984/- which was reassessed by the impugned order to Rs. 1,54,05,000/-. Appellants face penalty of Rs. 7 lakhs and Redemption Fine of Rs. 15 lakhs. They claimed exemption under Notification No. 66/88-Cus., dated 1-3-1988 while in its stay order, Hon ble Tribunal directed deposit of duty @ 40% ad valorem (BED) under Notification No. 65/88-Cus., dated 1-3-1988. 4. The two issues for consideration are - (i) whether imported goods are a CAT scan system in SKD/CKD condition, or merely parts thereof; and (ii) whether goods are under-valued and have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble. Exporters also certify that it is not a complete system. 7. Learned Advocate further argues that in view of following decisions, Interpretative Rule 2A (applied by ld. Collector in impugned orders) cannot be applied to deny benefits under Notification 66/88 (supra) :- 1997 (90) E.L.T. 57 (Tribunal) - Nippon Precesion Bearings 1996 (16) RLT 646 (Tribunal) - Maruti Udyog. 8. Learned Advocate further argues that even assuming that the said Rule 2(a) is applicable, even then the goods imported are not a complete system in view of facts (a) to (d) above. 9. On (iii) above (Valuation), Learned Advocate contests revaluation on following grounds : (x) While Transaction Value can be set aside only on the basis of contemporary imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e accessory and the 5 parts of each set imported constitute the essential character of the CAT scanner. 13. He further submits that intention behind Notification No. 65/88 was to support indigenous manufacture and not to import in SKD condition and assemble by using mere screw-driver technology. Hence the notification does not apply. 14. Ld. SDR further submits that the socalled 30 operations are mere tests and that the question of payment of excise duty is a fresh point and not agitated earlier. 15. He further argues that the technical opinion of the association is not binding. It being a private body and exporter s certificate is not independent evidence. 16. Ld. SDR cites as follows :- (i) 1997 (91) E.L.T. 3 (S.C.) GSFC - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hase convertor and power unit. This is not an accessory which enhances the use of the system. Without it the system cannot even be powered on, let alone function. This design is clearly suited to Indian Power supply conditions as also is dedicated to the CAT system. It is, therefore, totally different from an off the shelf standard power supply unit/transformer/stabiliser/UPS etc. (iii) The Central Excise department views these operations as tantamount to manufacture as a new and distinct product emerges from these operations and appellants accordingly pay Central Excise duty for this manufactured product. (iv) In the case C.C. v. Maruti Udyog etc. as reported in 1996 (16) RLT 646 (Tribunal), the majority decision of the Tribunal is as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdly, testing, alignments, calibration are involved in both these cases. Fourthly, to do this assembly, a work place with necessary equipments was created. Finally, Central Excise duty was paid on the end product in both cases. Therefore, we find that on facts this decision is similar to the one under consideration here. 21. In Maruti Udyog (supra) the Tribunal has laid out fresh interpretation of how to use Interpretative Rule 2(a) in such situations. Briefly, it is held that :- (a) Application of IR 2(a) results in a legal fiction being created and hence since the products imported have acquired all essential characteristics of end product (cars) and are near complete, therefore what was imported was cars and not components thereof; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... genous origin was added by the appellants. 24. With respect to the question of over-valuation, we find that the benefit of doubt goes to the appellants for the following reasons :- (i) their transaction value has not been challenged by department through contemporaneous imports of similar goods, which is necessary as per Rule 4 of CVR; (ii) that the department s reliance on the exporter s price list for domestic sales in Japan is misconceived as it cannot take the place of contemporaneous imports. That price list is for sale in Japan of a working system, duly assembled, tested and calibrated. Such a system is not similar to the one imported because (a) the power phase convertor is missing; (b) the system software is not loaded and tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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