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TMI Blog1985 (1) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... Tariff Entry 84.66 of the Customs Tariff Act (hereinafter referred to as the (C.T.A.). 2. M/s. Zenith Electronics Ltd., Bombay (the appellants herein) claimed benefit of the registration as project import in respect of the computer imported by them, as described above, which request was declined by the Assistant Collector of Customs, Bombay, by order of 18-6-1981 on the view that goods imported being in the nature of a computer meant only to develop system commands for adoption to the commands of end product. The activity could not be construed as bringing out a new industrial product. In the Assistant Collector s view, this was merely in the nature of bringing out a working manual of any machine whereas the scope of the project as conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en registered. He, thus, upheld the order passed by the Assistant Collector. 4. Aggrieved by the aforesaid rejection, the Appellants plead that they were already functioning as an existing industrial unit and manufacturing - (1) digital frequency counters; (2) digital multimeters; (3) digital clocks and watches; (4) digital panel meters and digital volt meters, for which purpose machinery was already installed. They contend that the project for manufacture of mini-computers was, thus, by way of expansion of the already existing industrial unit and that the computer had been imported by them to be used in the process of manufacture of mini-computers. They have given details of sanction/orders issued by different Government authorities/age ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should be only for the production of the end-product which interpretation according to them is not warranted by the wording of Tariff Item 84.66. They have relied, in support of their contention on a Judgment of the Bombay High Court in Tata Sons Limited v. Union of India : 1982: E.L.T. 53 (Bombay). 6. During the hearing before us, Shri R.J. Joshi, Advocate assisted by Shri H.N. Vakil, Advocate, reiterated the same contentions and explained with the help of a write-up that the imported computer was to be used for manufacture of software, which is an integral part of a computer system and consist of hundreds of thousands of instructions to the computer to make it work. It was contended with the help of this write-up that the software com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer, Nasik to the effect that the import of this computer system will mean a substantial expansion of their existing manufacturing activity. He thus wound up his argument by saying that the lower authorities have erred in holding that the computer was not a machinery, and that in order to be entitled to be treated as such, it must be shown that it produced goods and that rejection of their application for registration as Project Import contract for the purpose of Tariff Item 84.66 was not at all justified. 8. Shri S.C. Rohatgi, D.R., replying on behalf of the respondents, urged that reference to the Bombay High Court Judgment, did not arise in this case inasmuch as the lower authorities have held nowhere that the computer, was not a mach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intended to be utilised to ascertain whether the programming was being done properly in the newly manufactured computers and that even the Suppliers, namely, Mazda Electronics Private Ltd., Singapore, have, vide their letter dated September 10, 1981 (Ext. H) also testified to the fact that this Computer supplied by them to the Appellants was intended for manufacturing mini-computer/micro-processor based systems , and was necessary in developing software relating to the system of computer and also for hardware and software testing. 11. On a careful consideration of the respective positions stated before us, we find that there is abundant material on record to support the Appellant s contention that they are an already existing industrial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Department of Electronics and that the import requirement of capital goods in the nature of this imported computer had been assessed and endorsed, certainly have relevance to support the Appellant s contention that this import of the computer was required for substantial expansion of the existing industrial unit. Observations made by the Appellate Collector that the main contract was not registered as Project Import, seem to us to/be without any bearing on the issues involved in the case because requirement that the Appellants have to establish is only that the imported machinery is to be used either in the initial setting up of an industrial plant or for substantial expansion thereof. They do not claim it as an auxiliary equipment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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