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TMI Blog2018 (11) TMI 1101X X X X Extracts X X X X X X X X Extracts X X X X ..... ended. The adjudicating authority has erred in not extending the benefit of Notification No. 21/02 to the pipes of 650 mm dia and 850 mm dia in question - impugned order not sustainable. Confiscation - penalty - Held that:- Since on merits it is held that self-floating pipes are eligible for exemption under Notification No 21/02, the confiscation of the said pipes as ordered by the adjudicating authority is unsustainable and liable to be set aside - confiscation redemption fine as well as penalty set aside. Appeal allowed - decided in favor of appellant. - C/222/2009-DB, C/223/2009-DB, C/261/2009-DB, C/263/2009-DB, C/338/2009-DB - A/31272-31276/2018 - Dated:- 5-10-2018 - Mr. M.V. Ravindran, Member (Judicial) And Mr. P. Venkata Subba Rao, Member (Technical) Mr Jitender Motwani, Adv for the Assessee Mr Arun Kumar A.R. for the Revenue ORDER Per M.V. Ravindran All these appeals are disposed of by this common order as they are contesting the finding recorded in order-in-original No. 07/2008 dated 30.12.2008 2. Appeal No. C/222/2009 is filed by Dharti Dredging and Infrastructure Ltd against confirmation of demand of duty, interest thereof and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the adjudicating authority that the said self floating pipes of 850 mm dia and 650 mm dia are required for cutter suction dredger as the said dredger is used for dredging as well as discharging of the mud/sludge; the said pipes are integral part of cutter suction dredger and function of the dredger would totally depend upon self-floating pipes; depending upon the requirement of the length and the kind of dredging operation that would be required to be undertaken, the pipes diameters are reduced from 850 mm to 650 mm; having imported the dredger DHARTI XII along with its accessories and parts, pipes etc, they had the bonafide intention to use the pipes along with dredger on the East-coast for transportation of pipes by road and that having imported consignment which is in their name, and cleared by the departmental authorities it cannot be said that the said pipes are liable for confiscation as also the trailers. The classification of the pipes cannot be under Chapter 40 of the Customs Tariff Act but correctly classifiable under 890511000. The adjudicating authority after following due process of law did not agree with the contentions so raised and confirmed the demands alon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion that the Bench after giving detailed finding as to what is cutter suction dredger and what is Hopper dredger came to a conclusion that the pipelines which are required for disposal of dredged material have to be considered as a part of the dredger and held that they would fall under Chapter 8905 eligible for the benefit of Notification No. 133/87 which is precursor to Notification No. 21/2002 and the said order of the Bench has been upheld by the Hon ble Supreme Court as reported at 2002 (139)ELT A 313. He would submit that the same view was followed by the Bench in the case of Dredging Corporation of India Ltd Vs CC Kolkatta [2002(140)ELT 195 (Tri-Kol)]. It is his further submission that the adjudicating authority has not considered this case law in its correct perspective. Subsequently, he draws our attention to the Section Notes to Section XVII and draws our attention to chapter Note No 2 which talks about non-applicability of the references to parts or accessories which are not suitable for use solely on principle with the articles of chapters. He would submit that the adjudicating authority has basically relied upon general interpretation rules for classifying the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achine in the dredger and the pipes under seizure and imported are different and hence classifying them together as one dredger under Chapter 89 is incorrect. It is his submission that pipes are not essential parts of the dredger as held by the adjudicating authority and at the most they can be treated as optional accessories to the dredger based on op o rational requirement and could not therefore be equated with dredger itself, are undisputedly parts of dredger. It is his further submission that the appellant has raised two LCS with ICICI Bank for the payment of goods that are imported, indicating payments of dredger and pipes separately and that two proforma invoices are obtained from M/s Mean Good International and other supplier of pipes for making payment separately, and declared in one bill of entry all the items availing exemption under Notification No. 21/2002 dated 31.03.2002 attaching only the invoice of M/s Mean Good International Ltd. but not attaching the bill of lading which indicated movement of pipes from Danyang Pacific Rubber Plastic Products Co. Ltd to Singapore. The importer appellant had given a false impression that dredger and self-floating pipes and hoses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n appellant had filed one bill of entry wherein the following was declared: in one unit, cutter suction dredger with spare parts pipeline and accessories (all details as per invoice and packing list) claiming the same gets classified under Chapter Heading No 8905.1000 claiming the benefit of Notification No 21/02-Cus dated 01.03.2002 under Sl No. 353A. The said entry at 353A talks about exemption to all goods falling under 89051000 with no conditions attached. Chapter Heading No 8905 is in respect of dredgers. Having said that we find that declaration c given in the bill of entry was considered by us with the invoice which has been produced along with bill of entry which indicates supply of one cutter suction dredger with the specifications thereof and the spare parts enclosed with the invoices as Annexure-A which indicate that along with dredger, pipes of 650 mm and 850 mm dia were declared. All these things were considered by the lower authorities while extending the benefit of exemption notification. Subsequently the authorities held a view that the pipes which are declared as dredger pipes are not eligible for exemption Notification as being classifiable under 40054200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide Bill of Entry No. 01 dated 20.07.2007. However, at the time of answering to summons, since the local person at Krishnapatnam Port was not readily having a copy of the same, he submitted a draft packing list only for information and not for acting upon it, which in any case should be based on authenticated invoice and packing list. The draft packing list which is an Internal paper of M/s. Zhejiang Fangyuan Ship Industry Co., Ltd. have been received in our office by mistake. Q. 15. Please confirm whether the Dredger DHARTI-X is in operation and the details of the discharge pipes attached to the said Dredger may please be furnished. A. The said Dredger is in operation. Discharge pipes are essential parts of the Dredger and the length of pipeline and diameter of pipeline is dependent on distance to which the dredged material is to be transported. In Krishnapatnam Port the length of pipeline varies from time to time depending on the Dredging operation and distance to which it is pumped. The details of pipeline under use for DHARTI- X will be submitted within a week s time. Q.19 From your above deposition, it appears that there is a practice of importing Dredgers without s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h are not required at Krishnapatnam Port but required at Hazira Port. Q. 25. Please inform whether any intimation was given to the Customs/ Port authorities before the attempted removal of Self Floating Pipes on 11.08.2007 from Krishnapatnam Port. A. Since pipelines were cleared under Bill of Entry No. 01/2007-2008 dated 20.07.2007, under General Exemption Notification not specific to any Port, we felt that no intimation need be given to customs for dispatch of pipes to another location pending dispatch of main Dredger which proposed to be done after some time. Regarding the intimation to port, we will ascertain the position and intimate to you. 9. It may be seen from the above reproduced questions and answers, that the appellant has been taking consistent stand that all the pipes which are imported by them are for the use of dredging operations only. The finding of the lower authorities on the manipulation seems to be incorrect considering the above referred answers given by the Executive Director. 10 Further, we do find that the Tribunal in the case of Boskalis Dredging India Pvt Ltd (supra) was considering the similar issue and in Paragraph No. 8 has recorded the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the British Standard Specification is being reproduced below for better appreciation:- 4.4.1. General . . . A Cutter Suction Dredger may be self-propelled but is more commonly dumb :(non-self-propelled). Dredging only takes place with the dredger moored in some way and it involves an initial powerful cutting action with suction and pumped discharge to barges or more commonly. via a pipeline to a remote onshore area for disposal of land reclamation. The Cutter Suction Dredger is normally rated according to either the diameter of the discharge Pipe, which may range from 150 mm to 1100 mm or by the cutterhead driving horsepower, which may range from 20 to 5000, or in the case of very large dredgers by the total installed horsepower The main pontoon structure contains the dredge pumps (s), the main engines and all ancillary engines, drives and equipment. The discharge from the dredge pumps (s) passes over the stern (or opposite end to the cutter) of the pontoon to a heavy hose or flexible coupling, to which is connected a floating pipeline (see A. 4.5.3) which in turn is connected to an onshore pipeline. Sometimes an intermediate sea bed pipeline may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt had dismissed the departments appeal not through a speaking order on the merits of the case, therefore, it cannot be said that the decision of the Apex Court is final on the issue. With respect to the other citation quoted by the assessee in the case of Dredging Corporation of India, the Hon'ble Tribunal referred the case law of Boskalis Dredging India Pvt. Ltd. as a matter of fact but not had a clear finding basing on the merits and application of appropriate Rules for classification. 11. The above reproduced paragraph of the adjudicating authority is totally in tangent to the law pronounced by Apex Court in the case of Pernod Ricard India (P) Ltd Vs CC ICD Tughlakabad [2010 (256)ELT 161 (S.C.) in paragraph No 22 specifically held as under:- The appeal was, however, dismissed in limine. In our opinion, once a statutory right of appeal is invoked, dismissal of appeal by the Supreme Court, whether by a speaking order or non speaking order, the doctrine of merger does apply, unlike in the case of dismissal of special leave to appeal under Article 136 of the Constitution by a non-speaking order In our view the law settled by the Apex Court in the case of Bosk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upra. The item is required to be classified in the appropriate heading and in view of exclusion clause in Section Note 2(e) of Section XVII, the classification adopted by the lower authority under Heading 8413.19 is proper and correct which is upheld by setting aside the Commissioner (Appeals) order. (emphasis supplied) It can be seen from the above reproduced paragraph No. 6 of the order of the Tribunal, the Bench had categorically held that there is nothing recorded by the 1 st Appellate Authority therein for not treating pipes as integral part of dredger. On factual matrix also as indicated hereinabove, it is indicated that the entire findings of the Tribunal were in respect of dredging pipes and other goods were for regular use and not exclusively for the dredger in question. In the case in hand, as has been reproduced by us, the excerpts of the statements of the Executive Director and perusal of the documents filed along with bill of entry indicates that 650 mm and 850 mm dia self floating pipes were for exclusive use with the imported cutter suction dredger. If that be so, the question of classifying these self-floating pipes under Chapter No 4009 4200 would not arise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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