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TMI Blog2023 (11) TMI 1087X X X X Extracts X X X X X X X X Extracts X X X X ..... d supra). The process involved for completion of the manufactured goods since, have taken place post importation of the goods in question, the provisions of Rule 2(a) of GIR shall not be applicable for change in classification of the imported goods and to bring such goods under the purview of Rule 9A ibid, for the purpose of levy of ADD thereon. It is concluded that the appellants herein had not imported the complete PIMM in order to fall within the purview of the notification(s) referred supra for levy of ADD. In this case, admittedly since the PIMM, complete in all respects was manufactured in India by using the domestically procured goods also, such imported equipment, should not be subjected to levy of ADD. Therefore, the adjudged demands confirmed in the impugned order cannot be sustained for judicial scrutiny. Since, manufacturing activity undertaken by the appellants and payment of Central Excise duty on such activity was acknowledged and not disputed by the jurisdictional Central Excise authorities, the same cannot be questioned by the Customs department without any clinching evidence that such machine in question was imported into India as such or in un-assembled c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the subject country were substantial and above de minimis; and that the domestic industry had suffered material injury and the injury had been caused to the domestic industry, both by volume and price effect of dumped imports of the subject goods, originating in or exported from the subject country. On the said findings, the DA had recommended for imposition of provisional anti-dumping duty on all imports of the subject goods, originating in or exported from China. Subsequently, based on detailed investigation, the DA vide Notification dated 31.12.2009, issued from file F. No. 14/12/2008-DGAD had recorded the final findings, in confirming the preliminary findings recorded in the Notification No. 14/12/2008DGAD, dated 10.02.2009. Pursuant to such final findings, the Central Government vide Notification No. 39/2010-Cus. dated 23.03.2010 had imposed the anti-dumping duty on plastic processing or injection moulding machines , originating in, or exported from China PR. The levy of anti-dumping duty as per the said notification was for a period of five years from the date of imposition of the provisional anti-dumping duty i.e., 12.05.2009. 1.3 In this case, the officers of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exposed to the penal consequences provided under the statute. 1.4 On the above backdrop of the issue, the department had issued the show cause notice dated 28.07.2015 to the appellants, calling upon them to show cause as to why the subject goods seized under the provisions of Section 110 ibid, and subsequently released provisionally, shall not be confiscated under Section 111(d) and 111(m) ibid; the declared classification of the imported goods under CTI 8477 9000 / 7318 1100 shall not be rejected and to be classified under CTI 8477 1000 for the purpose of assessment and levy of ADD amounting to Rs.19,68,98,069/- as per notification dated 12.04.2009 and 23.03.2010 (supra); interest on the ADD payable under the disputed Bills of Entry shall not be charged under Section 28AA ibid; and penalty shall not be imposed on the appellants under Section 112(a) and 114A ibid. 1.5 The matter arising out of the SCN dated 28.07.2015 was adjudicated vide Order-in-Original No. 115/2016-17/CC/NS-I/JNCH dated 31.01.2017 by the Principal Commissioner of Customs, NS-I, JNCH, Nhava Sheva (for short, referred to as the impugned order ), wherein the learned adjudicating authority has confirmed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibid is applicable for proceedings under Section 9A of the Customs Tariff Act, 1975, but the notification dated 23.03.2010 shall not be applicable inasmuch as import of PIMM in CKD/SKD condition was not a stipulated condition therein for levy of ADD. To support such stand, learned Advocate has relied upon the order passed by the Tribunal in the case of Anchor Daewoo Inds. Ltd. Vs. Commissioner of Customs, Kandla 2007 (214) E.L.T. 230 (Tri. Ahmd.), which was upheld by the Hon ble Supreme Court [2016 (331) E.L.T. A138 (S.C.)], in dismissing the Civil Appeal Nos. 5999-6000 of 2007 filed by the Commissioner of Customs, Kandla. Further, learned Advocate has also relied upon the judgements delivered by the judicial forum in the case of Wipro Limited Vs. Commissioner of Customs, Chennai - 2007 (217) E.L.T. 558 (Tri. Chennai); Philips India Ltd. Vs. Commissioner of Customs, Mumbai - 2004 (166) E.L.T. 49 (Tri. Mumbai); Plaza Lamps and Tubes Ltd. Vs. Commissioner of Customs 2007 (209) E.L.T. 182 (Del.) and Delta Electronics Vs. Commissioner of Cus. C. Ex., Meerut 2012 (283) E.L.T. 68 (Tri. - Del), to state that notified goods alone should be subjected to levy of ADD and not th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmity with the statutory provisions. In this context, he submitted that the appellants had imported complete PIMM by mis-declaring the same as parts, spare parts, components, sub-assemblies and assemblies of complete machine, with the malafide intention to evade payment of ADD, levied under Sl. No.12 of the table appended to notification No.39/2002-Cus. dated 23.03.2010. He further submitted that the levy of ADD is on PIMM classifiable under CTI 8477 1000. He also submitted that the chartered engineer M/s Sai Siddhi Associates had issued the certificate only in respect of the consignment covered under the B/E No. 8161563 dated 19.12.2012. With regard to other consignments covered under separate bills of entry, he submitted that since, the department upon proper analysis, had confirmed that the same are assemblies/parts of the PIMM, which are simply to be fitted with the help of nuts and bolts, the appellants are liable to pay ADD in terms of the notifications issued by the Designated Authority, considering the imported consignments as a complete machine by itself. Learned AR has relied upon the conversations made through e-mail and skype between the parties to the contract and cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of plastic materials . On primary round of investigation into the matter, the Designated Authority had submitted its preliminary findings by Notification No.14/12/2008-DGAD dated 10.02.2009, with the conclusion that (a) the subject goods had entered the Indian market from the subject country at prices less than their normal values in the domestic market of the exporting country; (b) the dumping margins of the subject goods imported from the subject country were substantial and above de minimis; (c) the domestic industry had suffered material injury and the injury had been caused to the domestic industry, both by volume and price effect of dumped imports of the subject goods, originating in or exported from, the subject country. On the basis of such preliminary findings, the Designated Authority had recommended for imposition of provisional anti-dumping duty on all imports of the subject goods, originating in or exported from, the subject country, i.e., China PR. 6.2 On the basis of such recommendation (supra), the Central Government, in exercise of the powers conferred by sub-section (2) of Section 9A of the Customs Tariff Act, 1975, read with the Rules 13 and 20 of the Custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Screw barrel set L004 Hose pipe I005 Heater band L005 Linear transducer I006 Servo systems L006 Hydro motor I007 Hydraulic safety valve back pressure adjustment valve L007 Seamless pipe I008 Electric cabinet with all Wirings L008 Hydraulic fittings I009 Controller cabinet L009 Aluminum checker sheet I010 Limit switches and proximity switches L010 Paint materials I011 Guard cover and safety Doors L011 Electrical panel parts I012 Hydraulic manifold L012 Machine oil grease I013 Pressure transducer L013 Allen bolts hardware ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g channels is one of my specializations. I visited JH Welltech Machines (India) Pvt. Ltd., Ahmedabad, along with a research scholar on March 23, 2016 (Wednesday). We studied the Plastic Injection Molding Machines (PIMMs) being manufactured in their premises. We also visited a nearby factory where it was in use and witnessed its operations. JH Welltech imports certain parts like clamping unit, injection unit, servo drive, etc. They also domestically procure vital parts like machine base frame, PLC, hydraulic valves etc. In our opinion, it is not possible to conclude that the imported goods per se would constitute complete PIMM since without domestically procured parts and components, the imported goods cannot form a machine by any stretch of imagination . A detailed report is enclosed as Annexure-I to justify our opinion. (emphasis supplied) Further, Shri K.P.Karunakaran, in his technical opinion (supra) had also discussed about design, manufacture of PIMM and also its important sub-systems such as base frame, clamping unit, heating system, hydraulic system, PLC system etc., in forming the part of or participation in the manufacture of final product i.e., PIM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value and quantity wise) attached thereto, are extracted herein below: 9. On careful reading of the contents in the certificates dated 09.11.2012, 10.05.2016 and 02.08.2016 (referred supra) issued by the Chartered Engineers and the certificate dated 25.01.2016 issued by the Chartered Accountants (supra), the factual position is amply clear that the appellant had imported certain components of the PIMM from outside the country and indigenously procured some of the vital components for manufacture of the resultant final product i.e., PIMM. Further, the annexure to the certificate issued by the Chartered Accountant, as above, had also reflected that the indigenously procured components, both in terms of value and quantity wise, were also commensurate with the quantity reflected in the certificate furnished by M/s Sai Siddhi Associates, Chartered Engineers engaged by the Revenue. However, on perusal of the impugned order, we find that though the above referred certificates were produced by the appellants before the adjudicating authority, but the same were completely brushed aside and no findings were recorded therein, countering the expert opinion furnished by the author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DGAD is as under: No. 162/2006-DGAD Government of India Ministry of Commerce and Industry Department of Commerce Directorate General of Anti Dumping and Allied Duties Room N. 260-A, Udyog Bhawan, New Delhi Dated the 1st May, 2006 OFFICE MEMORANDUM Sub. : Parts of CFL imported under HS code 98539.90 being classified under 8539.31 ready to use CFL - regarding. Please refer to your Office Memorandum No. 354/205/2001-TRU (Part I) dated 20th April, 2006, forwarding copy of representation dated 4th April, 2006 of M/s. Khaitan Electricals Ltd., whereby clarification has been sought on the scope of the product CFL imported from China PR and covered under AntiDumping Investigation conducted by the Designated Authority. In this regard, it is clarified that : (a) Anti-dumping duties were recommended/imposed on the following two types of CFLs: (i) Complete, ready to use compact fluorescent lamps wherein choke is integrated within the lamp. (ii) Complete, ready to use compact fluorescent lamps wherein choke is external. (b) Anti-dumping duties were not recommended on parts/components of CFL. (c) CFL with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, in our considered view, ADD shall not be levied on the goods imported by the appellants on this ground also. 12.1 The provisions for levy of Customs duties are contained in Section 12 of the Customs Act, 1962. It has been mandated that duties of customs shall be levied at the rates as specified under the Customs Tariff Act, 1975 (for short, referred to as the Act of 1975 ). On importation of the disputed goods, the appellants had filed the Bills of Entry classifying the imported goods under different customs tariff items (CTI), as per Chapters 73, 84 and 85 provided under the Act of 1975. The B/Es filed by the appellant were finally assessed by the Customs department at the port of import, accepting the declaration furnished by the appellant. The provisions regarding levy of ADD on the dumped articles are contained in Section 9A of the Act of 1975. Since, levy under Section 9A ibid, is confined only to the dumped articles and is not a general levy in respect of the imported goods as provided under Section 12 ibid, the notifications issued for the purpose of levy of ADD have to be minutely studied. Since, the goods in question imported by the appellants were not the comple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SKD condition. For example, a ceiling fan is sold in CKD condition only. Similarly, ready-toassemble or do-it-yourself, furniture items or bi-cycle are sold in CKD condition. In those cases, when the goods are imported as CKD kit, then they are classified as fan or furniture or bi-cycle and not as parts. The articles envisioned under the Rule 2(a) of GIR are (i) incomplete article possessing essential character of the complete or finished article; (ii) unfinished article possessing essential character of the complete or finished article; (iii) complete or finished article, in unassembled condition; and (iv) complete or finished article, in disassembled condition. 12.4 According to the department, the finished goods imported by the appellant were in un-assembled condition. The phrase presented unassembled/disassembled has been explained in the HSN Explanatory Notes as under: (V) The second part of Rule 2(a) provides that complete or finished articles presented unassembled or disassembled are to be classified in the same heading as the assembled article. When goods are so presented, it is usually for reasons such as requirements or convenience of packing, handling or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erseas supplier/entities. We have gone through such relied upon documents and found that the subject matter of discussions therein was principally confined to the area of development of manufacturing facility of the product in India etc. Further, we find that nowhere in such retrieved documents/records, there is any whisper regarding importation of the complete PIMM machine. Rather, it transpires from such documentation that the appellants had not imported the complete machine and the items imported are only in part . Furthermore, the statements relied upon in the impugned order are also not specific with regard to supply of the complete PIMM machine by the overseas supplier. Thus, we are of the view that blind reliance cannot be placed on such documents to conclude that the appellants had imported the complete machine, in order to fall within the purview of Rule 9A ibid read with the notifications issued by the Government of India in the Ministry of Commerce Industry and the Ministry of Finance for the purpose of levy of ADD. 14. On the basis of the analysis made herein above, we conclude that the appellants herein had not imported the complete PIMM in order to fall within ..... X X X X Extracts X X X X X X X X Extracts X X X X
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