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TMI Blog2000 (4) TMI 404X X X X Extracts X X X X X X X X Extracts X X X X ..... machine should not be confiscated under Section 111(d) of the Customs Act, 1962 on account of importation of the same without a valid licence. The matter was adjudicated by Addl. Collector of Customs, Bombay after hearing the party. The Addl. Collector held that the machine was not an automatic testing machine but a non-automatic one since there was no micro computer interfaced with the machine under import and therefore, it cannot give results automatically. Accordingly he held that the machine was correctly assessable to duty under sub-heading 9031.80 read with Notification No. 118/86. The machine was also directed to be confiscated under Section 112 with option to the importer to redeem the same on payment of redemption fine of Rs. 8 lakhs. A penalty of Rs. 2 lakhs was also imposed under Section 112 of the Customs Act, 1962. 2. Shri R.J. Majra, ld. Advocate appeared for the appellants and Shri A.K. Agarwal, ld. DR appeared for the respondent Collector. 3. Shri R.J. Majra, ld. Advocate submitted that the appellants are engaged in the manufacture of Ball and Roller bearings and they had placed an order for the supply of Automatic Noise Testing Machine for Ball Bearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lector had relied on information supplied by M/s. SKF Bearings and the specifications of their machine No. MVM 90B and the catalogue/manual of the said machine which is used in online production. It was contended on behalf of the appellants that the question involved in the case was whether the testing machine imported by the appellants was "automatic" or not. The Addl. Collector had mis-directed himself by comparing the imported testing machine with a totally different machine of a different kind and model, and having a different purpose. He had, therefore, fallen in error in concluding that the item was not "automatic noise and vibration testing machine". The point for consideration should have been whether the function of the testing machine was performed automatically or manually by using head-phones. Further, the Additional Collector had held the item as not automatic merely for the reason that there is no micro computer interfaced with the testing machine. According to the appellants the absence of a micro computer does not make the machine non-automatic. It was also wrong to hold that just because the imported machine was used in testing bearings on a random basis it will co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one of the three chutes in accordance with various parameters. Ld. DR submitted that the machine imported did not have the facilities of automatic testing, analysis and recording the results automatically and sorting out the bearings automatically in the production line. He therefore, submitted that there was a clear difference between noise and/or vibration testing machine and the machine imported by the appellants. The machine imported by the appellants would, therefore, not qualify for being an automatic noise and/or vibration tester for ball bearings allowed under the OGL scheme. He submitted that the impugned order had correctly directed the confiscation of the said machine with option for redemption. The Addl. Collector had also correctly held that the item was assessable to duty under sub-heading 9031.80 liable to the appropriate rate of duty read with Notification No. 118/86. He also submitted that in the facts of the case, a penalty of Rs. 2 lakhs was warranted. 5. We have considered the submissions. The Department's case is that the machines cannot be considered automatic since it did not have the facility of automatic testing, analysing and recording of the results ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny manual effort, it would qualify for being considered as an automatic cloth cutting machines. In that view of the matter the assessee's appeal was allowed with consequential relief. In the present case we find that the only dispute is whether certain functions like loading of the bearing on the mandral and the inspection check on the bearing for its quality based on manual judgment and the absence of the facility for on line testing would make the machine a non-automatic machine. We observe that the appellants had described the goods as "automatic noise testing machine for ball bearings" in the Bill of Entry. It is not in dispute that certain functions as described above have to be performed manually and the machines did not have the facility of fully dispensing with the manual part. Additional Collector had compared the functions performed by the automatic noise and vibration tester used in M/s. SKF bearings to conclude that to qualify for classification under the category of 'automatic' machines it should be a machine which performs the testing functions independently and without manual operation to any extent. 6. It is common knowledge that with the constant improvement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sugawara Laboratories showing the details of the item in question that the imported goods described as "Automatic Noise Testing Machine AD-0111 for Ball Bearings" is an 'Anderson Meter". It has been described as a bearing inspection instrument to measure the same and vibrations on a finished bearing and has, inter alia, the following features :- "Outline and Features - Bearing inspection instrument to measure the sound and vibrations on a finished ball bearing or roller bearing, etc. - The bearing sound - vibration detection not done using with conventional air vibrations (microphone) but rather using direct vibrations (converter head) eliminates the need for an acoustic room or a sound-proofing room. - Permits 100% inspection in an ideal production site for true quality control. - All the frequency bands are divided into 3 bands, low, medium and high. The vibration rate is displayed with a indicator for each band. - Listening to vibration sound with the built-in amplifier and speaker covering all the frequency bands, permits product quality to be verified according to its tone and sound volume together with the indicator judgment." "Anderon Meter ... A vibration/sound ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on as well as licencing because in the case of relevant appendix also the words used are the same namely automatic noise and/or vibration tester for bearings indicated against sr. no. 14 under Appendix I Part BII and the very next entry is automatic and/or semi-automatic washing or lubricating or assembling machine or line for bearings; and this shows that the notification has been aligned with the Import Licence requirement to this extent. 12. I therefore, hold that they were neither entitled to the benefit of the notification 26/88 nor for clearance under OGL and the goods were liable to confiscation. I therefore, uphold the order of the Collector regarding classification, exemption notification, licensing and liability to confiscation. 13. At the same time looking to the totality of facts and circumstances, I consider that a fine of Rs. 8 Lacs (Rupees Eight Lacs only) coupled with a penalty of Rs. 2 Lacs (Rupees Two lacs only) is excessive and am of the opinion that looking, inter alia, to the CIF value of the goods a fine of Rs. 6 Lacs (Rupees Six Lacs only) was sufficient and no penalty was called for. Dated : 22-4-1999 Sd/- (S.K. Bhatnagar) Vice President In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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