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TMI Blog2015 (9) TMI 1135X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed under the Customs Act. There is enough evidence for imposing penalty under Section 112(a) of the Customs Act, 1962 - appellants are liable for penalty for contravening the procedures prescribed for clearance to DTA. Accordingly, we impose penalty of ₹ 1,00,000 each on the appellants in respect of their appeals. - Decided partly in favour of assessee. - C/Misc./367/2009 and C/393/2009, C/Misc./369/2009 and C/394/2009 - Final Order No. 41016-41017 / 2015 - Dated:- 11-8-2015 - Shri R. Periasami, Technical Member And Shri P. K. Choudhary, Judicial Member, JJ. For the Appellant : Shri Habibullah Basha, Senior Advocate For the Respondent : Ms. Indira Sisupal, AC (AR) ORDER Per R. Periasami Appellant filed appeals against Commissioner of Customs (Appeals) orders both the appeals are taken up together for disposal as the issue involved is common and identical in nature. 2. The brief facts of the case are that the appellants have set up a unit at MEPZ (now SEZ) and registered with MEPZ, Development Commissioner for providing export of service in respect of generating Clinical Bio Analytical Statistics and Data Management. It appeared that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the adjudicating authority has not discussed the issue of classification but merely confirmed the demand by relying the Development Commissioner s order. He further submits that the Commissioner (Appeals) in the impugned order also held that in view of the Apex Court s judgment the goods cleared are books. He further submits that what is cleared is books even though they are not bound. He relied on the Hon ble Supreme Court s decision in the case of Commissioner of Customs (General), New Delhi Vs. Gujarat Perstorp Electronics Ltd. 2005 (186) ELT 532 (SC). He relied on paragraphs 26, 46, 47, 50, 54 to 58. He further submits that what they have cleared is books classifiable under 4901. He also drew the attention to HSN Explanatory Note of Chapter 49 which includes printed books, brochures, leaflets and similar printed matter whether or not in single sheets are classifiable under 4901 1010 whereas Revenue classified under 49119910. The Hon ble Supreme Court in the above decision had considered both HSN and customs classification and considered its own order in the case of Parasrampuria Synthetics Ltd. vs. Commissioner 2000 (119) ELT 211 (Tri. LB) and Scientific Engineering House Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s cleared from MEPZ/SEZ to DTA sales classifiable under chapter 4901 or chapter 4911 of Customs Tariff Act and whether chargeable to appropriate customs duty or otherwise. We find from the proceedings that the adjudicating authority in his first order dated 23.6.2006 confirmed the duty which was set aside by Commissioner (Appeals) and remanded to the adjudicating authority. Again the denovo adjudication order dated 16.11.2006 passed confirming the duty and the same was also set aside by the Commissioner (Appeals) and remanded to the adjudicating authority to consider the decision of the Hon ble Supreme Court in the case of Commissioner of customs Vs. Gujarat Perstorp Electronics. The appellant has challenged the third denovo Order-in-Original dated 20.9.2007 before the Commissioner (Appeals) and the Commissioner (Appeals) rejected their appeal and upheld the adjudication order which is under challenge before the Tribunal by the appellant. 8. On perusal of the impugned order, we find that the appellant-unit is registered with MEPZ/SEZ. The appellant has set up the unit in MEPZ/SEZ for rendering service in relation to clinical data research meant for multinational corporate. We fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ara 12 of this order, which sets as rest the doubt raised, by the unit. 9. We find that the impugned order has relied on the decision of the Hon ble Supreme court in the case of Commissioner Vs. Parasrampuria Synthetics Ltd. (supra). The impugned order also referred to the Hon ble Supreme Court s decision in the case of Commissioner Vs. Gujarat Perstorp Electronics Ltd. (supra) and held that the above cases are not applicable. Revenue has demanded customs duty by classifying the products under 49119990 whereas the appellant s classified under 4901. In this regard, the Hon ble Supreme Court in the case of Commissioner Vs. Gujarat Perstorp Electronics Ltd. (supra) has clearly dealt the issue of classification that design, drawing and plans are classifiable under 4901 and not under the residuary entry 4911. The relevant paragraphs are reproduced as under:- 26. It is also appropriate at this stage to refer to Harmonized System of Nomenclature (HSN). The relevant part reads thus; 49.01 - PRINTED BOOKS, BROCHURES, LEAFLETS AND SIMILAR PRINTED MATTER, WHETHER OR NOT IN SINGLE SHEETS. 4901.10 In single sheets, whether or not folded -Other 4901.91 - Dictionarie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one with which we are concerned came up for consideration before the authorities in Parasrampuria Synthetics Ltd. The Central Excise Authorities held that Drawings, Designs and Plans imported by the Company could not be said to be Books within the meaning of Chapter Heading 49.01 but would be covered under sub-heading 4911.99 and hence were liable to custom duty. The demand made by the authority, therefore, came to be confirmed by the Commissioner of Customs. Being aggrieved by the order passed by Commissioner, the Company approached CEGAT. A two member Bench felt that there were conflicting decisions on the point which could appropriately be resolved by a Larger Bench and accordingly by an order dated March 14, 2000, the matter was ordered to be placed before the President for constituting a Larger Bench. As already observed earlier, the Larger Bench in 2000 (119) E.L.T. 211 decided the question in favour of assessee and against the Department. Resultantly, the appeals were allowed by holding that printed materials imported by the Company could be said to be Books falling within Tariff Heading 49.01 and were entitled to exemption as Printed books . 28. It was conceded by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a collection of a number of leaves or sheets of paper or of other substance, blank, written or printed, of any size, shape and value, held together along one of the edges so as to form a material whole and protected on the front and back with a cover of more or less durable material. The Court also referred to dictionary meaning. It was observed that one must refer not only to the physical, but also functional characteristic of book . It must be functionally useful for the purpose of assessee s business or profession. To put it differently, it must be a tool of his trade an article which must be part of the apparatus with which his business or profession was carried on. It must have utility value enabling its owner to pursue his business or profession with greater advantage. It must, thus, satisfy a dual test. It must bear both physical and functional characteristics of a book. It must be a collection of a number of sheets of paper or of other substance, having suitable size, shape and value, bound together at one edge so as to form a material whole and protected on the front and back with covers of some kind and functionally useful to the assessee for carrying on his business or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement for transfer of technology for setting up a plant to manufacture specified goods could not be said to be book and hence was not covered by Chapter Heading 49.01 nor exempted under notification of 1975. It is also true that the Court considered both the decisions, viz., Scientific Engineering House Ltd. decided by this Court and Elecon Engineering Co. Ltd. decided by the High Court of Gujarat. xxxxxxx xxxxxxxxxx xxxxxxxxxx 50. In our opinion, the Counsel is right in submitting that when the expression book is not defined in the Act, natural and ordinary meaning of the said expression must be kept in view. According to him, nowhere it is provided that all the nine characteristics or ingredients as highlighted by the learned Attorney General in Parasrampuria Synthetics Ltd. and referred to by this Court in paragraph 10 must be considered essential or sine qua non. He, therefore, submitted that a wrong test was applied by this Court in Parasrampuria Synthetics Ltd. and Scientific Engineering House Ltd. was erroneously distinguished. The proper way on the part of the Court was to consider the test laid down in Scientific Engineering House Ltd. and to come to a concl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted and is not disputed before us and is also concluded by a decision of a three Judge Bench in Associated Cement Co. Ltd. that the basic heading is 49.01. It deals with Printed books, brochures, leaflets and similar printed matter, whether or not in single sheets . 49.11 covers Other printed matter, including printed pictures and photographs . Thus, specific or basic heading is 49.01 and residual entry is 49.11. Priority, therefore, has to be given to the main entry and not the residual entry. According to the Company, the case is covered by the main entry under 49.01, and in that view of the matter, one cannot consider the residual entry 49.11. 58. In Indian Metals Ferro Alloys Ltd., Cuttack v. Collector of Central Excise, Bhubaneshwar, 1991 Supp (1) SCC 125, this Court held that residuary item can be referred to and such item can be applied only when goods are shown to be not falling under any other specific item. If they are covered by a specific item, residuary item has no application. 10. The Hon ble Supreme Court in the above order has taken into consideration the earlier decisions of the Hon ble Supreme Court in the cases of Commissioner Vs. Parasrampuria Synth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the adjudication order, we find that the appellant having been registered as MEPZ/SEZ unit are covered under rules and regulations of the MEPZ / Customs Rules and Regulations. Even if the goods are exempted the appellants should have followed the procedure for clearing the goods to DTA which apparently they have not done. The appellants have not filed any shipping bill and no intimation was given to the Department and no procedure prescribed for SEZ and customs notifications are followed. They have not only violated FTP regulations for which the Development Commissioner has imposed a penalty of ₹ 5 lakhs but they have also violated the procedure and rules prescribed under the Customs Act. Further, they admitted the said violations before the Tribunal and which is recorded in the findings of adjudication authority. The very fact that the appellant, for the subsequent periods, have filed shipping bills and cleared the goods at nil rate of duty confirms the fact that during the relevant period the appellant failed to follow the procedure stipulated under Customs Act and Regulations and ignored all the customs formalities. Therefore, having set aside penalty imposed under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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