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TMI Blog2024 (8) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... oods are either partly assembled or have the essential feature of the complete machine - The report of the Chartered Engineer does not indicate that the goods imported are in partly assembled condition or if they have any essential feature of the finished goods. In view of above Note (IV) of the Section XVI of HSN cannot be applied to the instant case. Rule 2(a) would apply only when the imported articles presented in unassembled or disassembled can be put together by means of simple fixing device or by riveting or welding. In the instant case, there is no evidence that the parts imported by the appellants can be assembled into machines by simple procedures. The report of Chartered Engineer is silent on this aspect. Whereas the appellants have claimed that the individual parts need processes like polishing, grinding, drilling, tapping, T slotting, scraping, wiring, painting or some parts like T slot in platens, scraping of base for partial adjustment and all these processes were required to be completed with the help of some mechanical/ electrical machines. The said argument that these processes are necessary for assembly of the finished Horizontal Moulding Machines has not been co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1962 in lieu of confiscation. (iv) Orders confiscation of two Horizontal Injection Moulding Machines valued at Rs. 1,12,33,602/- imported vide bills of entry No. 2443168 dated 13.07.2017, 2492637 dated 17.07.2017 and 2550572 dated 21.07.2017 which were cleared earlier. However since no goods were available, it refrains from imposing any redemption fine under Section 125(1) of the Customs Act, 1962. (v) Imposes penalty amounting to Rs.9,00,000/- under Section 112(a)(ii) of the Customs Act, 1962 upon M/s. Huarong Plastic Machinery India Pvt Ltd, Ahmedabad (vi) It refrains from imposition of penalty under Section 114A of the Customs Act, 1982 upon M/s Huarong Plastic Machinery India Pvt Ltd, Ahmedabad as the imposition of penalty under Section 112(a) of the Customs Act, 1962 stands imposed. (vii) It impose penalty amounting to Rs.70,00,000/- under Section 114 AA of the Customs Act, 1962 upon M/s. Huarong Plastic Machinery India Pvt Ltd, Ahmedabad. (viii) It impose the penalty amounting to Rs. 1,00,000/- on Shri Jitesh Papaiyawala, Director, M/s. Huarong Plastic Machinery India Pvt Ltd, Ahmedabad under Section 112(a)(ii) of the Customs Act, 1962. (ix) Imposes penalty amounting to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained different drawings. Page No.59 contained drawing titled as Injection Moulding machine loading by Forklift . Similarly, Page No.61 contained drawing titled as Injection Moulding machine un-Loading by Forklift . Page No.63 contained drawing with the printed name of Huarong Plastic Machinery Co., LTD. at the bottom right and BLOCK DIAGRAM OF THE HYDRAULIC SYSTTEM OF AN INJECTION MOLDING MACHINE at the bottom centre. Page No.65 contained the HYDRAULIC SYSTEM PARTS LIST printed on the bottom left side and Huarong Plastic Machinery Co. Ltd. at the bottom right. Page No.67 contained drawings titled at the bottom left as HYDRAULIC MANIFOLD DISTRIBUTUON DRAWING and Huarong Plastic Machinery Co. Ltd. at the bottom right. The said black folder also contained printed manuals titled as: 1) Huarong Plastic Machinery Co. Ltd. Taiwan Excellent Injection Molding Machine INSTRUCTION ENGLISH MANUAL; 2) Huarong Plastic Machinery Co. Ltd.. Taiwan Excellent Injection Molding Machine BL 920/870 INSTRUCTION MANUAL and 3) HUARONG GROUP Vertical Horizontal all your molding needs. Similar folder were found in some other wooden cases No. CTN No. 06, CTN No. 07 and CTN No. 08. All four black folders reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations. (iii) The four enclosed assembly manuals reveals the precise details with sectional and complete drawings of different models of injection molding machines. (iv) It is certified that Machinery value claimed in the invoice is as per the present prevailing market for such Injection Molding Machinery. (v) After overall study in multiple facets of verification of Machinery it is certified that importer has imported this consignment for the purpose of assembling the separate: Spare-parts for producing a Injection Molding Machine for ultimate production. Deficit, if any, are very insignificant in acclaiming a perfect and total production unit. (vi) Looking to the above and gone much in detail in various facets of study and verification it is certified that there is no any specific discrepancy other than mentioned is noted to further specify in this report. Further addendum by Chartered Engineer was issued on 09.11.2017 stating as follows: This addendum is to clarify that the stated machine in the report is Horizontal Injection Moulding Machine and segmental mould stated in the report vide Platen Mould model no. 420 Ton, 320 Ton, 150 Ton, 120 Ton would act adequately suffice for p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y after using those parts the Horizontal Injection Moulding Machine could have been manufactured. He argued that in absence of those parts essential character of the machine could not have been achieved. He argued that the parts procured locally and from other foreign sources were critical part of the machine. Learned consultant contested the chartered engineer certificate. He further pointed out that chartered engineer certificate does not describe the essentiality/ importance / vitality of parts imported by them in these consignments. He argued that if the essential parts are found to be missing then it cannot be said that these parts imported from Taiwan constitute complete or incomplete machine. He pointed out that user manuals are assembling manuals which describe step by step procedure for assembling of Injection Moulding Machines. He argued that there is no one to one correlation with the alleged import of Horizontal Injection Moulding Machine in CKS/SKD condition and the user manual found. He pointed out that even on these imported goods certain processes like polishing, grinding, drilling, tapping, T slotting, scraping, wiring, painting or some parts like T slot in platens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue has also filed appeal against the said order on the ground that the Commissioner has wrongly set aside the penalty under Section 114A on the ground that penalty has already been imposed under Section 112(a) of the Customs Act. The revenue has relied on the decision of Hon ble Apex Court in Dharmendra Textile Processors reported at 2008 (231) ELT 3. Learned Authorised Representative argued that in terms of the said decision and the fact that the provisions of Central Excise for imposition of penalty under Section 11AC of the Central Excise are similar to the provisions of the Customs Act for imposition of penalty under Section 114A of the Customs Act, ratio of the said judgments is squarely applicable. 11. We have considered the rival submissions. We find that it is undisputed fact that certain goods have been imported by M/s HPMIPL in three different bills of entry containing in four containers. The bills of entries have been filed on two different dates. It is also undisputed that some of the boxes contained user manuals of different Injection Moulding Machines along with drawings and that the name of M/s Huarong Plastic Machinery Company Limited printed on the same. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion molding operations. (iii) The four enclosed assembly manuals reveals the precise details with sectional and complete drawings of different models of injection molding machines. (iv) It is certified that Machinery value claimed in the invoice is as per the present prevailing market for such Injection Molding Machinery. (v) After overall study in multiple facets of verification of Machinery it is certified that importer has imported this consignment for the purpose of assembling the separate: Spare-parts for producing a Injection Molding Machine for ultimate production. Deficit, if any, are very insignificant in acclaiming a perfect and total production unit. (vi) Looking to the above and gone much in detail in various facets of study and verification it is certified that there is no any specific discrepancy other than mentioned is noted to further specify in this report. Further addendum by Chartered Engineer was issued on 09.11.2017 stating as follows: This addendum is to clarify that the stated machine in the report is Horizontal Injection Moulding Machine and segmental mould stated in the report vide Platen Mould model no. 420 Ton, 320 Ton, 150 Ton, 120 Ton would act adequate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nclusion that fax machines were not the type of goods which were normally traded or transported in knocked down condition and therefore, the imports were that of the components and not of fax machines. Shri Lakshmikumaran also invites our attention to the fact that Chapter 64 dealing with footwear does not have a note similar to Note 2 in Section XVI. Thus this position would render support to the proposition that Rule 2(a) would apply only when the imported articles presented unassembled or disassembled can be put together by means of simple fixing device or by riveting or welding. We have already pointed out in the earlier part of our judgment that the complicated process would be required for the user of those parts. It clearly lays down that Rule 2(a) would apply only when the imported articles presented in unassembled or disassembled can be put together by means of simple fixing device or by riveting or welding. In the instant case, there is no evidence that the parts imported by the appellants can be assembled into machines by simple procedures. The report of Chartered Engineer is silent on this aspect. Whereas the appellants have claimed that the individual parts need proces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eer did not have benefit of going through the list of items required for assembly of finished goods. The fact that these goods were required to be used in production of finished goods has not been contested by Revenue. Moreover, the report of chartered engineer does not talk about these missing parts which are needed for final assembly of the finished goods. In view of this, it is apparent that the report of Chartered Engineer is not accurate. 16. Another reason cited in the impugned order for classifying the said goods as complete machines is discovery of the black coloured folders with printed lable which were user manuals. The fact that these user manuals were recovered from the consignment does not in any way imply that the goods imported by them are complete machines. User manuals usually imported with machine however it can also be imported along with parts of the machines with intention of assembly of complete machines from the said parts as well as parts procured from other sources. The presence of user manual does not in any way indicate that the goods are complete machines. Further it is seen that the impugned order notice highlights the content of the folder in following ..... X X X X Extracts X X X X X X X X Extracts X X X X
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