9911796707
TMI Blog1993 (7) TMI 220X X X X Extracts X X X X X X X X Extracts X X X X ..... ls of entry No. 107256 and 107257 dated 1-2-1989 and 107888 dated 17-3-1989. The appellants in the bills of entry declared that the goods imported are 'Condensing Units' and the value was Rs. 4.1 lakhs. They have also declared in the bills of entry that the import was from USA. There was a search of the premises of the appellants' office and all the documents connected with the import were seized by the Directorate of Enforcement. After certain proceedings were taken by the appellants in the High Court against the department, a show cause notice dated 4-4-1990 was issued proposing to enhance the value of the goods on the ground that there is an undervaluation of the goods imported and proposing to confiscate the goods and also proposing to impose a penalty. The allegations in the show cause notice are that the goods actually imported are air-conditioners whereas in the bill of entry, they declared them as 'condensing units'. The value was proposed to be increased on the basis of imports of Toshiba RAC 46 E41.5 Tonnes at Hongkong Dollars 4165. It was also alleged that the appellants mis-declared the country of origin as Singapore while the goods were of U.S. origin. An exploded view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... citors and switches, plastic knobs, screws, bold, stand etc. are not present would not make a difference. These are low value items and as stated earlier, the imported unit has all the important components. Hence the mere fact that some parts are not present or some parts are not mounted on a stand etc. would not be an important factor. The essential character of the air-conditioner can be considered to have been achieved in the case of the imported unit since all the essential parts are present, already inter-connected with tubes. Though the unit to be used has to be fitted with front cover etc., it can still be stated that the imported unit has the essential character of a room air-conditioner." 6. In other words, according to the Collector, though the imported goods does not contain all the parts of the air-conditioner i.e. though it is an incomplete air-conditioner, since it contains essential parts of A/C, in view of Rule 2 of the Interpretative Rules providing that an incomplete article can be classified as a complete article provided it satisfies the essential character of an air-conditioner, the imported goods should be classified as an air-conditioner. 7. As regards the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued by the supplier which reads as follows: "Ref : WHILE WESTINGHOUSE AIR CONDITIONERS. THIS IS TO CONFIRM THAT ALL PARTS MENTIONED BELOW, WHEN ASSEMBLED WILL BECOME A COMPLETE CONDENSING UNIT. - CONDENSER -BLOWER WHEEL - FAN & MOTOR - COMPRESSOR -BASE SHOULD YOU NEED ANY FURTHER ASSISTANCE, PLEASE LET US KNOW." They also relied upon the opinion of experts of Hindustan Refrigeration Stores and from All India Air Conditioning & Refrigeration and Utility Engineers (India) Ltd., Poonaire Engineering Company. All the above experts expressed the opinion that the items imported by the appellants constitute the condensing unit. The appellants also submitted that the department has assessed these items as condensing units on previous occasions. Rule 2(a) of the Interpretative Rules is irrelevant as essential characteristics have direct relation to the functional characteristics. They also relied upon the order of this Tribunal in C.C.E. v. Subros Ltd. [1989 (43) E.L.T. 543 (Tribunal) =1989 (24) ECR 219]. Shri Asthana appearing for the appellants further submitted relying on Modern Air-conditioning Practice by Norman C. Harris that an incomplete condensing unit consists of compresso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in cfm per ton of refrigeration is 350 to 400 for cooling coil and 650 to 700 for condenser coil. Sensible heat factor is 0.7 average. The available capacity of the units is 3000 to 18000 BTU per hour or more with compressor motors from 3/4 to 2 HP. The units have hermatically sealed reciprocating compressors using non-toxic refrigerants and driven by capacitor motors. The evaporator and condenser coils are made of copper, bonded with aluminium plate fins. Capillary tubes are normally used as expansion device for the liquid refrigerant, although expansion valves are specially used sometimes. The fan motor is either shaded-pole or permanent split capacitor type. A throw away or cleanable type of filter is generally used. A thermostat controls on of cycle for the unit. The outdoor air damper is adjustable." 11. Shri Prabhat Kumar further explained the Mechanics of the Compression Refrigeration System by referring to a paragraph in Modern Refrigeration Practice by Guy R. King. The relevant passage is as follows : "If a system were set up as shown in Fig. 5-1 and the valve opened slightly, the pressure in the tank would drop very little. The temperature in the tank would remain very ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reases the pressure of the refrigerant. In so doing, the compressor actually increases the refrigerant vapor temperature. This makes it easier for the condenser to do its job. Shri Prabhat Kumar further explained that the condenser serves two important functions: 1. It removes the heat picked up by the refrigerant in the cooling coil (evaporator). 2. It condenses the refrigerant vapor to a refrigerant liquid. The heat removal and condensing processes can take place in either of the two ways, namely, by water-cooling process or by air-cooling process. 14. He explained that the air is then blown to the outdoors, and the heat is dissipated in the atmosphere. In the condensing process, the air (or water) picks up heat from the refrigerant; in the cooling process, the refrigerant picks up heat from the room air. In both instances, a coil is the heat transfer surface. In summary then, the refrigerant enters the condenser as a hot vapor and leaves as a hot liquid. The condenser has removed enough heat to change the refrigerant from a vapor to a liquid. 15. Therefore, Shri Prabhat Kumar submitted that the refrigeration cycle is complete as the units imported by the appellants consist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified as a complete article is whether it can perform the functions of a complete article without adding or by adding minor parts. If the incomplete article can perform the functions of the complete article, then the goods imported can be classified as a complete or a finished article. The main contention of Shri Prabhat Kumar is that the refrigeration cycle is complete and therefore, it should be classified as an A/C. In our view, merely because the imported goods technically complete the refrigeration cycle, it does not follow that it is a complete air-conditioner. It cannot by itself perform the functions of the A/C. Technical completion of cycle is not the criteria to determine whether a particular incomplete article is a complete article. The test is whether it can perform the functions of A/C as it is or with minor additions. The Collector himself found that the imported goods cannot by themselves be used as an air-conditioner. The goods imported may be essential parts of air-conditioner but they do not possess the essential character of an A/C as they cannot by themselves perform the functions of A/C. Therefore, in our view the goods cannot be classified as complete air-cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s possible only when a motor driven fan or blower is fitted in the air conditioning kit. Accordingly, the goods in dispute do not pass the test of essential character." 17(b) From the above, it is clear the test to determine when an incomplete article can be classified as complete is whether the incomplete article can perform the functions of a complete article. In other words, the true test is functional. The issue is to be approached by putting a question that can the article imported perform the function of a complete article? If the answer is yes, then classify the product as a complete article otherwise not. 17(c) Further the Subros order does not give the number of parts and accessories that are imported. It says the gas compressors and the air conditioning parts and accessories for cars and light commercial vehicles. The classification lists indicate gas compressors, cooling unit and other components and parts. In other words, they manufacture all parts and accessories plus gas compressor and cooling unit. The only items which are missing is motor driven fan and a blower. In view of the tariff description in the absence of these two items, it cannot be classified as an air ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods imported are condensing units and not air-conditioners. 21. Shri Asthana as well as Shri Prabhat Kumar referred to a number of authorities. However, we are not referring to them in the light of the view which we are expressing on the facts. 22. The next question to be considered is what should be the assessable value of the imported goods. We have expressed the view that the imported goods cannot be classified as A/Cs. The Collector while assessing the value took the price of M/s. Westinghouse, air-conditioners at H.K. $ 4353 and H.K. $ 4857 and arrived at the average of H.K. $ 4165 and reduced it by 25% for the parts which are absent and the said value of H.K. $ 4605 is nearer to the value indicated in the show cause notice. Therefore, he assessed CIF value Rs. 7573.59/-. 23. The Collector rejected the invoice value on the ground that the appellants have not adduced any evidence in support of their case such as indent placed on the supplier, the correspondence, definite items to be imported specifications of the goods and other relevant details taking the plea that the documents have been seized by the FERA authorities. He also observed that the importer has no evidence to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not fall under Appendix 6 or Appendix 2B. They are automatically covered by the relevant Sl. No. of Appendix 3A. 26. The Collector held that the goods are consumer goods falling under Appendix 2 Part B of the Import & Export Policy, 1988-91. According to the Collector, the goods are covered by entry 146 which reads, "consumer goods in SKD condition" including sub-assemblies and assemblies thereof. He also held that customs are not bound by paragraph 20(6) of the Import Policy according to which, the definition of 'consumer goods' has been incorporated in Chapter I for the purpose of Import Policy only. This definition is illustrative and not exhaustive. It will be left to the customs authorities to identify the goods which, in their judgment, could be appropriately classified as 'consumer goods'. The Collector says in view of the above it is for the customs authorities to decide whether the goods imported are consumer goods or not and since he is of the view that the goods can be used as air-conditioners and since they directly satisfy human needs, they should be classified as consumer goods. 27. The expression 'consumer goods' is defined by the Policy under paragraph 6(13) which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omplete air-conditioning machines which read with Rule 2(a) of the General Rules for the interpretation of the First Schedule, these have to be treated as an incomplete or unfinished air-conditioning machines and these would be covered under TH 8415.10. It has, therefore, been contended by the Revenue that the goods are to be classified under the aforesaid Tariff Sub-heading 8415.10 attracting a duty of 70% (Basic) plus 45% (auxiliary) plus Rs. 9000/- (CVD) per piece for the bills of entry filed before 28th Feb. 1989 and at the rate of 70% plus 45% plus Rs. 9430/- (CVD) per piece for the third bill of entry filed on 17th March 1979. 32.1 In view of the aforesaid controversy, the first question, therefore, is whether the imported goods are to be treated as air-conditioning machines in terms of the Customs Tariff or as parts of air-conditioning machines. 32.2 Next two questions which are largely dependent on the answer to the first question are :- (1) Whether the goods imported are consumer goods in terms of Import (Control) Policy and (2) Correct value of the goods. 33. After careful examination of the goods there is no doubt that the goods imported are "an evaporator (cooling) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... motor driven fan or blower and (2) Designed to change both the temperature (a heating or cooling element or both) and the humidity (a humidifying or drying element or both) of air, and (3) For which the elements mentioned in (1) and (2) are presented together. In these machines the elements for humidifying or drying the air may be separate from, those for heating or cooling it. However, certain types, incorporate only a single unit which changes both temperature and by condensation, the humidity of the air. These air-conditioning machines cool and dry (by condensation of water vapour on a cold coil) the air of the room in which they are installed, or, if they have an outside air intake (damper), a mixture of fresh air and room air. They are generally provided with drip pans to catch the condensate. From the structural point of view, the air-conditioning machines of this heading must therefore incorporate, in addition to the motor driven fan or blower for circulating the air, at least the following elements : An air heating device (operated by hot water, steam or hot air tubes or by electric resistances etc.) and an air humidifier (generally consisting of a water spray) or an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... point, therefore, the appellant has no case. Reliance placed by the learned counsel on Tribunal's judgment in the case of CCE v. Subros Ltd. [1989 (43) E.L.T. 543 (Tribunal) = 1989 (24) ECR 219] is incorrect. In that case in view of the goods under consideration it was held that in the absence of motor-driven fan the goods could not be treated as air-conditioning machines. Such is not the case here as motor driven fan is very much present apart from other elements necessary for changing the temperature and humidity. Further observation in para 26 of the aforesaid Report in Subros case, namely :- "gas compressor, cooling unit and other parts cleared by the respondents cannot perform the function of an air-conditioner viz., changing of temperature/humidity" is in the nature of an obiter and cannot be taken as technically correct. This becomes clear from the immediate subsequent observations, i.e. - "This is possible only when a motor driven fan or blower is fitted in the air-conditioning kit". Motor driven fan or blower, it is common knowledge, serves the function of circulating air and cannot serve the function of changing temperature/humidity. 33.6 We can look at the above pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f no assistance to the appellants in the peculiar facts and circumstances of this case inasmuch as there has been a total mis-declaration of goods. Such a fact was not available in the cases relied upon by the learned advocate. The goods have been described by the appellants as "parts of air-conditioning machines" whereas in actual fact in terms of the CTH 84.15 they are air-conditioning machines. It is, therefore, but plain common sense that the value of the parts as declared by the appellants cannot be taken as equivalent to the value of the machines. In these circumstances, the adjudicating authority has adopted the method, as set out above, and as held earlier it cannot by any stretch of imagination be termed as unreasonable. 34.1 As regards the question of ITC Policy, it is to be noted that Schedule I to the ITC Order No. 17/55 which prohibits importation of goods, as mentioned in that Schedule, is fully aligned with the Customs Tariff, the description of air-conditioning machines which is prohibited from import is the same as that given in the Customs Tariff Act under TH 84.15. Air-conditioning machines are undoubtedly consumer goods directly satisfying the human need of com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative for the Respondent Collector. The hearings were spread over three afternoon sessions. 37. While reading extensively from the order of the Learned Member (Judicial), the main points which Shri Asthana submitted on the three points of difference were the following :- CLASSIFICATION OF GOODS (a) The goods imported are condensing Units and not Air-conditioning machines as understood in Customs Tariff sub-heading 8415.10 as is evident from the Tariff Entry which is as under :- 84.15 Air-conditioning machines, comprising a motor-driven fan and elements for changing the temperature and humidity, including those machines in which the humidity cannot be separately regulated. 8415.10 Window or wall types, self-contained. (Emphasis added). (b) What has been imported are parts of Air-conditioning machines because only 9 out of 32 parts have been imported, and these do not constitute a self-contained or in other words, what may be called, a "complete" air-conditioning machine. The interpretation of the Additional Collector as upheld by Learned Member (Technical) that by application of Rule 2(a) of the Rules of Interpretation of the Tariff, even incomplete air-conditioning machines w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Sharp Business Machines Pvt. Ltd. v. Collector of Customs - 1990 (49) E.L.T. 640 (SC). (c) There is no ground for rejecting the value declared by the appellants. No allegation of additional consideration has been found; nor is any evidence available of relationship. There is therefore no valid ground for rejecting the transaction value under Rule 4 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988. The authorities could not proceed beyond Rule 4 because of the requirement of proceeding only sequentially. The findings of Learned Member (Technical) in para 34 of the order were strongly contested. I.T.C. LICENCE FOR THE GOODS (a) It is only by application of Rule 2(a) of the Rules of Interpretation that the goods have been treated as consumer goods. Since this rule is not applicable, the question of treating them as consumer goods would not arise. Reliance for this purpose is placed on paras 27-28 of the order of learned Member (Judicial) who has held that since the goods by themselves function as air-conditioners, they are not consumer goods. (b) The appellants hold an import licence for parts of air-conditioners falling under Appendix ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... most cases, the "split" divides the system into an indoor unit (fan coil section) and an outdoor unit (condensing unit) connected by refrigerant tubing and suitable electric controls ....." 40. Referring to the decision of the Tribunal in the case of Collector of Central Excise, Meerut v. Subros Ltd. [1989 (43) E.L.T. 543 (Tribunal) = 1989 (24) ECR 219], Shri Prabhat Kumar explained with reference to the diagrams appearing therein, that this decision fully supported the department's case. It is for want of a motor driven fan and blower in the air-conditioning kit that the Tribunal had held it not to be an air-conditioning machine and since these parts were available in the subject goods, the learned SDR thought, it fulfilled the requirement of an air-conditioning machine. Though the number of parts not present may be large, they were not essential parts of an air-conditioner and items like screws etc. were also not important value-wise. Shri Prabhat Kumar explained that the 9 items imported by the appellants constituted the essential parts of an air conditioner, (though incomplete) and, by application of Rule 2(a) of the Rules of Interpretation, gave it the essential character of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sential character of an air-conditioning machine and clearly merited classification under sub-heading 8415.10. 43. It is a well settled principle of interpretation that the "language used in a statute has to be understood in its grammatical and ordinary sense without any addition or subtraction or substitution". Shri Prabhat Kumar placed reliance on a number of decisions for this purpose including the Supreme Court judgments in the case of K.L. Sud v. P. Sadhukhan (AIR 1957 SC 907) and Tarulata Syam v. C.I.T. (AIR 1977 SC 1802). He also referred to the Supreme Court judgment in the case of J.K. Cotton Spinning & Weaving Mills v. State of U.P. (AIR 1961 SC 1170) from which he quoted the following observation :- "Courts always presume that legislature inserted every part of a statute for a purpose and legislative intention is that every part of statute should have effect." 44. In view of these decisions, Shri Prabhat Kumar submitted that the words "essential character" occurring in Rule 2(a) cannot be substituted by the words "functional character" as had been done by Learned Member (Judicial) in her order, since this would amount to doing violence to the language used in Rule 2(a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ris as extracted in para 41. This being so, Rules (2) onwards would have full application and, by specific application of Rule 2(a), an 'incomplete' air-conditioning machine such as the one imported in the present case, would be covered by sub-heading 8415.10 just as the sub-heading covered air-conditioning machines, window or wall type self-contained. In other words, in terms of Rule 2(a), air-conditioning machines falling under 84.15 or "window or wall types, self-contained" under sub-heading 8415.10 include, in its ambit, an incomplete or unfinished item as well, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. 49. Shri Prabhat Kumar also made elaborate submissions on the scope of a proviso in a clause and submitted that the proviso occurring in Rule 1 had necessarily to be limited in its operation to the ambit of the rule which it qualifies. He also referred to Notes 4 and 5 of Section XVI of the Customs Tariff Schedule in relation to the definition of machine, and sought to establish that the goods imported fell in the category of air-conditioning machines. 50. He assailed the expert opinions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court in the case of Kanungo & Co. [1983 (13) E.L.T. 1486] according to which the burden of proof shifted to the appellants because the goods had been misdeclared. 53. As for the question of I.T.C. licence, Shri Prabhat Kumar submitted that since the Indian Customs Tariff as well as Schedule I to the Imports (Control) Order 17/55 dated 7th December, 1955 had been fully aligned from 1986, the goods imported had to be classified as air-conditioning machines for licensing purposes also. This being so, the goods could not be allowed clearance against a licence for parts of air-conditioners falling under Appx. 3A of the Policy as claimed. He relied upon the decisions of the Tribunal in the case of Hindustan Teleprinters Ltd. v. Collector of Customs, Madras [1986 (24) E.L.T. 11] and in the case of Greaves Cotton & Co. v. Union of India [1990 (43) E.L.T. 263]. He also referred to a clarification given by the licensing authorities in a letter dated 19-12-1989 copy of which was annexed to the Show Cause Notice. Shri Prabhat Kumar emphasised that the items imported were consumer goods which were covered by Appendix 2B (Serial No. 146) of the Policy and their import was banned. 54 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceeded sequentially as provided for in the Valuation Rules. Application of Rule 4 of the Valuation Rules cannot be excluded since value of such or like goods is not available. Thus, Rules 5 and 6 cannot be applied. He strongly contested the determination of value by the best judgment criteria because transaction value of goods cannot be rejected in the manner in which it has been done in the present case. As regards the Import Licence, Shri Asthana submitted that the letter written to the Deputy Chief Controller of Imports & Exports on 17-10-1989 by the authorities of which the reply had been enclosed to the Show Cause Notice, had not been supplied to the appellants. They therefore did not know the context in which the reference was made to the licensing authorities and the clarification contained in that letter was therefore not applicable to them. What the Policy prohibits is a completely built-up air conditioners, and since the goods imported were, even according to the department, not completely built-up units, the clarification given by the D.C.C.I. & E. was not applicable to their case. He strongly questioned the applicability of the fiction available in Rule 2(a) for interpr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the terms of the Heading and according to the provisions of the Rules and unless, a particular Heading or Note excludes application of Rules other than Rule 1." In view of this clear position. Rule 2(a) has to be applied for the interpretation of sub-heading 8415.10, and this would mean that incomplete machines would be covered by this sub-heading if they have acquired the essential character of the complete article. This brings us to the question whether the goods as imported and described as condensing units can be considered to be incomplete air-conditioning machines. 56. There is no dispute that besides the compressor, fan motor, propeller fan, and condenser coil etc., an evaporator has also been imported. Shri Prabhat Kumar has placed considerable technical material before us to prove that the refrigerating cycle is completed. In fact, on this point there is no disagreement between the two Members of the referring Bench. The disagreement is only about the interpretation whether the incomplete machine should be classified as a complete machine. The ld. Member (Judicial) has applied the test whether it performs the function of the complete machine. The learned SDR has co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the past and were allowed clearance at the same value now declared. The value of various types of air-conditioners taken from the Andrews Mail Order Book have no bearing in our case. At the same time, the value given in the Mail Order Book is retail in nature and is invariably subjected to heavy discount. ......The basis of the Department's valuation is, therefore, wrong. The department's method of valuation is also based on assumptions and presumptions. There is no basis whatsoever as to how the department has worked out the price of outer covers and control switches as well as other items to be 20% of the value of the goods under import. Remaining 23 items which we have imported cost more than the price of the goods under import....... We also crave liberty to produce additional evidence in this regard at the time of personal hearing apart from local market opinions in the matter". (Emphasis added) 58. After considering the reply and after hearing the appellants the Additional Collector has recorded the following finding :- "11. The goods as above are quite different from a condensing unit. - The condensing unit is a sub-assembly whose function in an air-conditioning system ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the transaction as above or the documents as called for from the importer has been submitted by the importer in support of the invoice value, the invoice value is not acceptable. In view of the facts and circumstances relating to this import, it is seen that the value of identical or similar goods is also not available". 60. It will appear from a detailed consideration of the matter that the invoice price was rejected because it was the price of the condensing unit whereas the goods imported contained the essential elements of an air-conditioner. Right from the stage of the examination of the goods, the issue of the show cause notice and, later, during the adjudication of the case, the allegation was that the goods imported were not merely condensing units, but consisted of essential elements of an air-conditioner. It is on the basis of this finding that their classification has been upheld under sub-heading 8415.10. This is also the basis for not accepting the value of condensing units as indicated in the invoices. The plea of the appellants that the transaction value cannot be rejected under Rule 4(2) of the Customs Valuation (Determination of Price of Imported Goods) Rules, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore fall in the category of 'consumer goods' as defined in Para 6(13) of the Import Policy. On the other hand, learned Member (Technical) has held that the imported goods are window type air-conditioning machines and are, therefore, "clearly consumer goods" and prohibited for import without a suitable licence. 62. A careful consideration of the matter shows that the goods imported are not merely condensing units but also have all the essential parts of an air-conditioner. Even though the refrigerating cycle may be complete with the goods as imported, it cannot be said that they are capable of satisfying human needs directly without further processing. It would not, therefore, be correct to hold them as "consumer goods" for purposes of the import policy. The fact of the alignments of the heading in the Import Tariff and the Schedule to the Import Trade Control Order does not affect the determination of the question whether they are "consumer goods", since this fact is to be decided on the basis of the meaning given to "consumer goods" in Para 6(13) of the import policy. I agree with Shri Asthana that the fiction applicable in Rule 2(a) of the Interpretative Rules cannot be appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e recorded in the open Court as follows :- "Shri L.P. Asthana, ld. Advocate for the appellants has pointed out that 3 questions were referred to the 3rd Member by way of points of difference between the first two Members. On the first two questions, namely; Q. No. 1 : Whether the imported goods can be treated as air-conditioning machines falling under Tariff Heading 8415.10 or parts of air-conditioning machines falling under Tariff Heading 98.06. Q. No. 2 : Whether the value of the imported goods, as upheld by the adjudicating authority is correct or not. Opinion of the 3rd member is very categorical and there would be no difficulty, according to him, in delivering the judgment on those two points i.e. regarding the classification of the goods imported and valuation of goods imported. On the 3rd question, whether there is an infraction of ITC policy or not, he submits that opinion of the 3rd Member complicates the matter inasmuch as he has held that goods imported are not consumer goods and yet he has gone on to hold that the replenishment licences produced for the part or specifically for condensing units are not valid. Shri Asthana submits that, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber when he upheld the views of the adjudicating authority that a separate licence for air-conditioning machines as consumer goods is required and by way of inference the licence produced by the appellant is not valid for the imported goods. Hence, we pass the following order :- (1) Imported goods are classifiable under Tariff sub-heading 8415.10 as air-conditioning machines and are subject to duty accordingly. (2) Value of the imported goods as found by the adjudicating authority is correct. (3) Licences produced by the appellant Corporation before the adjudicating authority are not valid to cover the imported goods. (4) Consequently the fine in lieu of confiscation of the goods and the penalty imposed on the appellant Corporation by the adjudicating authority is upheld. (5) Penalty of Rs. 10 lakhs imposed on the proprietor Shri Mohan Babbar is set aside in view of there being no difference of opinion between the two Members who originally heard the matter on the question of imposition of penalty on the proprietor when a penalty had been imposed on the appellant Corporation. Sd/- Sd/- (P.C. Jain) (G.A. Brahma Deva) Dated: 8-7-1993 Technical Member Jud ..... X X X X Extracts X X X X X X X X Extracts X X X X
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