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TMI Blog1984 (5) TMI 242X X X X Extracts X X X X X X X X Extracts X X X X ..... ches in the first year, 30,000 watches for second year, 40,000 watches for 3rd year and 50,000 watches each for 4th to 7th year. The communication inter alia permitted the appellants to import components in CKD condition except for prohibited items based on year to year programme permissible to unit for import. The first consignment of components of wrist watches was received by the appellants in December, 1979 and reached their factory on 28-12-1979. The appellants claimed to have commenced assembling of watches from the last week of December, 1979. The appellants imported components of wrist watches including watch cases and dials. They imported in all 27 consignments, all of which arrived by post at Jaipur F.P.O. All the consignments were cleared by Customs against valid import licences and they were assessed to concessional rate of duty in terms of Notification No. 240-Cus., dated 30-12-1978. Under this Notification, Wrist watch parts falling under sub-heading (2) of Heading 91.01/11 are exempt from so much of that portion of duty of Customs as is in excess of 50% ad valorem, provided that these were imported for manufacture of wrist watches in accordance with production progr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncession under the same. The demand of differential duty and imposition of penalty are unjustified, time-barred and illegal. 3. At the hearing of the appeal, Shri N.C. Sogani, Consultant for the appellants reiterated the grounds urged in the Memo. of appeal. In particular, he also urged that in this case the clearances of the goods were made by the Customs after full examination and verification, therefore, the Collector of Central Excise for reviewing assessment could have recourse only to Section 130 of the Customs Act, 1962 (as it then existed) and the demand of differential duty and imposition of penalty made long after 6 months and one year time-limit stipulated under Sections 28(1) and 130 respectively of the Customs Act is not only time-barred but also unjustified and illegal. For the purpose, Shri Sogani, learned Consultant relied on two decisions : (i) Jain Shudh Vanaspati Ltd. and Anr. v. Union of India and Ors.- 1982 E.L.T. 43(Delhi), and (ii) Central Board of Excise Customs in M/s. Aleuin Tapes - Order-in-Appeal No. 134/1982, dated 5-3-1982; 1982 E.L.T. 418 (CBE C). 4. On behalf of the respondent, Shri K. Chandermouli, Senior Departmental Representative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvoices also. No invoice describes the goods as complete watch movements but describe them only as components of watch parts or watch cases or watch dials. The appellants have, however, claimed that the goods were in CKD/SKD condition. 7. For the Import Licences, goods being in CKD/SKD condition was not material though it was material for the concessional rate of duty under Notification No. 240-Cus., dated 30-12-1978, as amended, which will be dealt with later. The Collector of Central Excise in paras 19, 20 and 21 of his order concluded that what was actually imported was watch movement because examination reports did not indicate that watch movements were in CKD/SKD condition and had it been so, the examination reports would have said so and the party would have made entries to this effect in their Appendix 18 register. Now this in our opinion is not the proper way of evaluating evidence. The Customs as already pointed out, allowed the clearances of the goods after physical verification after opening the parcels. Had imported goods not tallied with the Import Licences their clearances would not have been permitted and the examination reports would have indicated the discrepanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacture. The appellants have urged that they have in fact used the imported parts for manufacture of watches. From reading of the Collector s order, it does not appear that he held that the appellants had not in fact used the goods imported for manufacture of watches. From the reading of paras 25 26 of the order, it appears that the Collectors finding was that the appellants did not stick to the approved production programme to which we have already referred to in para 1 above. In this connection, the appellants have filed photostat copies of communication No. 13(15) 73 ENGG (MMI/Vol. II, Government of India, Office of the Development Commissioner, Small Scale Industries addressed to the Director of Industries and other authorities. This communication states that certain confusion is being created in interpreting the meaning of yearly phased manufacturing programme being approved by this office for the assembly/manufacturing of wrist watches in the small scale sector. The communication further clarifies that the meaning of phase is the completion of that much quantity approved for the particular phase and not necessarily the twelve months of the calendar/financial year. Thos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts have satisfied the Customs authorities that they have fulfilled the conditions of Notification, we cannot invest the concept of deemed provisional assessment. Thus viewed, computing limitation of months from the date of payment of duty, Show Cause Notice dated 19-4-1982 when all the clearances were made by the end of 1980 would appear clearly barred by limitation. 12. In the view we take, it is not necessary for us to determine whether the appellants have fulfilled the conditions of the Notification No. 240-Cus., dated 30-12-1978 or not to claim eligibility of concessional rate of duty. 13. As a result of aforesaid discussion, we would set aside the penalty and hold that the claim for differential duty is barred by limitation. We therefore, set aside the impugned order and allow the appeal. 14. [Order-in-Dissent per : A.J.F. D Souza, Member (T)]. - While I agree with the conclusion of my learned Brothers on setting aside the penalty, I am constrained to come to a different conclusion on the question of time-bar and demand for duty. 15. I shall first deal with the question of time-bar. The concessional assessment under Notification No. 240/78 was contingent on satisfa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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