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TMI Blog1998 (1) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs, Bombay who adjudicated the matter came to a finding that the goods imported were going to be used only for modernisation (i.e. modification and additions) of the importers already existing furnaces and that no new furnaces were being set up or assembled. The order passed by the Asstt. Collector Customs, Bombay was confirmed in appeal by the Collectors of Customs (Appeals), Bombay who observed that the nature of the goods imported were such that they may not go into assembly of any furnace but were for the purpose of introducing the modern technique into the operation of furnaces and that Notification No. 155/86-Cus., did not extent the concessional rate of duty to goods imported for modernisation of the existing plant. 2. The matter was posted for hearing on 6-11-1997 when Shri R. Swaminathan, Consultant appeared for the appellants. Shri A.K. Agarwal, SDR represented the respondent/Revenue. 3. Shri R. Swaminathan, Consultant stated that the appellant were engaged in the manufacture of calcium carbide. They had two furnaces installed in their factory for manufacturing calcium carbide. The furnaces installed needed modernisation and for that purpose they had obtained lic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cence for import of the capital goods under West German capital goods credit in the list attached with the import licence the capital goods allowed to be imported were mentioned. It is seen that the appellant had imported the goods in terms of this import licence and in the Bill of Entry dated 4-8-1986 the goods imported were described as under : (1) Thyristor controlled vibrating feeder. (2) Electronic weighing devices. (3) Level indicators. (4) Charging tube gates with hydrolic cylinder for feeding the furnace. (5) Hydraulic pressure generating unit. (6) Data logging system. (7) Control panel with digital programme. (8) Taping furnace tap hole and tap hole reaming machine. 6. Under Notification No. 155/86-Cus. the parts required for the purpose of initial setting up or for the assembly or manufacture of any article specified in the table annexed to that notification, when imported into India and proved to the satisfaction of the Assistant Collector of Customs to be so required for such setting up, assembly or manufacture, were exempted from so much of that portion of the duty of customs leviable thereon as was in excess of the amount calculated at the rate appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required for the assembly of furnaces. The furnaces were already installed in the factory premises of the appellants. They were not engaged in the manufacture of furnaces. It is not the case of the appellants that the equipment imported was for the initial setting up of the furnaces. Thus, the Calcutta High Court decision in the case of Asiatic Oxygen Ltd. v. Collector of Customs [1992 (57) E.L.T. 563 (Calcutta)] is not applicable to the facts of this case. Further the equipment was imported for changing certain parts from the already existing furnaces. The goods were not imported for assembling the furnaces. The changing of some of the parts could not be termed as assembling of a furnace. In the case of Shriram Refrigeration Industries Ltd. v. Collector of Central Excise, Hyderabad [1986 (26) E.L.T. 353 (Tribunal)], the Tribunal had observed that if the remaking resulted in bringing into existence of commercially distinct goods then alone it will be considered that the process involved was a process of manufacture. The appellants had explained before the Adjudicating Authority that the structural aspects of the furnace e.g the floorings or the stack portion while reassembling th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns 'not existing before; now made, or brought into existence, for the first time . In the context of the language of the statute, particularly in its application to a machinery, we are of the opinion that the expression 'new must be construed in this sense and in contradistinction and antithesis to the word'used . According to the statement of the suppliers there is no room for doubt that the machines were used after they were first made. Subsequently, the machines were taken into parts and were reassembled after replacing worn out parts and after incorporating the latest modifications. But the question still remains whether the two machines, after being reconditioned, were entirely different from the old machinery and whether the latest improvements incorporated into them made the machines substantially new within the meaning of the sub-section. In other words, the question is whether the reconditioning of the two 'Jackstone Junior Frosters Mark II in this case was reconstruction or substitution of the entire machinery, meaning by entirety not necessarily the whole but substantially the whole subject matter of the machinery. The question of law arising in this case must be teste ..... X X X X Extracts X X X X X X X X Extracts X X X X
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