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TMI Blog1999 (8) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 2. On examination of the imported goods of which clearance was claimed in terms of this letter, the department found that the thyrister converter system, one complete furnace used and new raw materials and components for fabricating three more furnaces were imported. The Collector s order records that the first item was imported in place of a motor generator set permitted for the temper mill and the second in place of bright annealing furnace. Notice was issued proposing confiscation of these goods under clause (d) of the section 111 of the Act and penalty be imposed under section 112 and recovery of duty, proposing to deny the exemption under notification 77/80. After hearing the importer the Collector passed the order impugned in the appeal. He stated that the thyrister converter system was imported as a part of the temper mill, except for this system all the other components of the temper mill which was imported were second hand. Value of the thyrister converter was only 9% of the total value of the temper mill. A second hand machine, which was reconditioned, may necessarily have new parts to allow the machine to perform its intended functions. The machine could not be held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o as supporting documents to the appeal consist of various letters of the respondent to the Customs department, Reserve Bank of India and other banks, Development Commissioner of Kandla Free Trade Zone, correspondence between the respondent and the Customs authorities. Everyone of these documents has been in the respondent s possession. They would in any event have been supplied, with the notice, or access to them provided at that stage. The respondent had not raised any plea at any stage that such documents or copies thereof had not been provided. The department s appeal was adjourned twice earlier, at the respondent s instance, and this plea had not been raised widest latitude. It is not really possible to say that these documents were not made available to the respondent. We are therefore unable to accept the reason put forward, to be a valid reason for the respondent s advocate to refrain from arguing on the points involved. 7. The grounds in the appeals are these: the import of the thyrister converter was not permitted by the letter of Ministry of Commerce, permitting import and the raw material for setting up annealing furnace was not covered by the letter of approval of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required by an unit in the Kandla Free Trade Zone would need prior approval of the Board set up for this purpose. The benefit of notification would also be available only if the import was made under a licence for the import of goods. The licence as is evident from the policy, is the permission granted by the Kandla Free Trade Zone Board. 11. The question now to be considered is whether the goods in dispute are covered by permission granted by the Board. Let us consider each of the items. The thyrister converter was new. It does not figure among the 5 items that were permitted by the Board to be imported by the respondent. The importer s contention was that the converter is part of the motor generator set which is one of the unit of the temper mill permitted to be imported. The Collector records that the motor generating set comprising of 2AC motors, 2DC generators and the current balancing generator were imported, and were only part of items required for making complete motor generator set. The Collector says that he had seen the motor generator set in the appellant s factory and finds that motor generating set was incomplete and that the imported items forms only 20% of these i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chines or sets of machines, to perform its functions. A thyrister converter is evidently one of these assemblies of machine or equipment. It is to be simplistic to compare this, in relation to the temper mill as a small part, like the tyres of a car. It has therefore to be held that the thyrister converter was not imported according to the licence. It is hence liable to confiscation and the benefit of notification is not available to it. 14. We are next concerned with the raw material for components of the bright annealing furnace. Here, the Collector holds that ceramic wool, was an advanced refractory material used to align the inside of the furnace, insulated against heat loss. It has only a life of 5 years and one cannot expect anyone to use used ceramic wool. In any case, it cannot be re-used once it cut in appropriate lining. Therefore he says the ceramic wool can be imported only as a raw material. There is no specific allegation with regard to ceramic wool in the appeal. The appeal generally urges that the goods were not in the list approved by the Board. 15. However, if, as found by the Collector, the ceramic wool could not be imported except as unused, this fact would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ols, jigs, gauges, fixtures, moulds, dies, instruments and accessories, prototypes, technical and trade samples for development and diversification; and drawings, blue prints and charts. 18. We do not find it possible to hold that the term of the notification would include raw material to be used for fabricating machinery, which in turn will be used in the zone. The phrase for being used in connection with the production has to be read along with the other two phrases in company it is found. The phrase lots deals with the machinery, apparatus and raw material directly used to manufacture the goods exported. The second defines to those which, while they may not be directly required for such production, may be used to fulfil functions auxiliary to such production and also packaging - that is to say, stages anterior and subsequent to the direct manufacture of the goods. This phrase therefore would thus cover such goods such as material handling equipments, machinery for processing of intermediate products, etc., directly required for producing the export goods may be indispensable as parts of the plant, required to produce such goods. It is, however, a very different thing to say ..... X X X X Extracts X X X X X X X X Extracts X X X X
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