9911796707
TMI Blog2004 (6) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... mption, we first take up the plea advanced by the learned Advocates for remand of the case back to the adjudicating Commissioner on the ground that he has taken into account only the minority report by two members of the panel of experts ignoring the majority report of four members of the panel of experts. The learned Consultant Shri Mondal opposes the plea of remand on the ground that it would serve no purpose except causing delay. 4.We have given our due consideration to the request for remand. We find it very strange that different members of the panel of experts constituted to examine the machinery under import have given two separate reports on two different dates. We also find it strange that the adjudicating Commissioner has dealt with the minority report but has not mentioned the majority report in his adjudication order. However, we find that there is essentially no difference in both the reports in so far as they relate to physical examination of various machinery items under import. The main difference is in the opinion given in the two reports regarding classification of the imported machinery and eligibility to exemption. It is well settled that the question of classi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreed to additionally ship 12 Jacquard Control Device Reading System, one Reading System and one Card Pressed System. These goods were imported in several containers and packed separately for which a Bill of Entry was filed describing the goods as used/second-hand computerized embroidery machines in dismantled condition for shipment claiming benefit of exemption under Notification No. 11/97-Cus., dated 1-3-1997. It is also not in dispute that after import, the impugned textile machines have been fitted with the Jacquard Control Devices in the premises of the appellants and are functioning as computerized embroidery machines. The adjudicating Commissioner has determined that at the point of import, the impugned machines were not computerized and that the appellants are not therefore eligible to claim exemption applicable to computerized embroidery machines. It is the claim of the appellants that even at the point of import, the imported machines are to be considered as computerized embroidery machines eligible for the exemption under the said Notification No. 11/97-Cus. In support of their argument, the learned Advocates for the appellants have cited the following case laws :- (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lete machines and not as parts of the machine under Heading 84.31 ibid. The learned consultant appearing for the Revenue, on the other hand, relies on the following decisions :- (1) New India Industries Ltd. v. CC, Bombay - 1994 (73) E.L.T. 723 (Tri.) :- Classification of goods (Customs) - Goods to be assessed in the condition in which they are imported. (2) Rajasthan Spg. and Wvg. Mills Ltd. v. C.C.E., Jaipur - 1995 (77) E.L.T. 474 (S.C.) :- Exemption notification construable strictly - Liberal construction which enlarges the term and scope of the notification not permissible nor extended meaning assignable to exempted item. (3) Paramount Centrispun Castings Ltd. v. C.C.E., Nagpur - 1995 (77) E.L.T. 705 (Tribunal) :- It is well settled that goods have to be assessed on the basis of their form at the time of their clearance. (4) C.C.E., Nagpur v. Paramount Centrispun Castings Ltd. - 1996 (83) E.L.T. A176 (S.C.) :- The Supreme Court Bench comprising of Hon'ble Mr. Justice J.S. Verma, Hon'ble Mrs. Justice Suja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fy the goods for what they are, as an objective wharfside task. The second task, once the goods have been objectively identified, is to then classify the said goods by deciding which tariff headings describe the goods and applying the relevant interpretative rules and notes - see Chinese Food and Wine Supplies Pty. Ltd. v. Collector of Customs (Vic) (1987) 72 ALR 591 ; Re. Gissing and Collector of Customs (1977) 14 ALR 555. In addition, the authorities make it clear that, in determining what is the essential character of goods, it is the state or condition of the goods at the time of importation that is the determining factor and that it is wrong to classify goods - or to determine their essential character, by reference to the purpose of the importer or of the purchaser. Regard must be had to the characteristics of the goods themselves, as they would present themselves to an informed observer : see Times Consultants Pty. Ltd. v. Collector of Customs (Qld) (1987) 76 ALR 313 at 327." We also re-produce below the General Interpretative Rule (GIR) 2(a) which has been referred to by both sides in the course of their arguments :- "Any reference in a heading to an article shall be take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se to which such goods are put to after importation. 10.The 12 embroidery machines were old and were used as mechanical embroidery machines for more than 20 years by the supplier M/s. Moojin and these machines were not fitted with any computer devices till the time of importation. The 12 brand new Jacquard Control Devices were on the other hand manufactured and supplied by M/s. Micro Engineering Co. Ltd. These have been fitted only subsequent to import and clearance from the customs to make the mechanical embroidery machines computerized. It is significant that Shri A. K. Kulkarni, Chief Engineer working with the appellants has in his statement before the customs has categorically stated that he had seen the imported machines prior to import in Korea and that these were mechanical machines and were not re-conditioned. He has also stated that these machines have been imported with 5,000 pieces/rolls of design cards which are used only in mechanical machines, not in computerized machines. 11.At the time of import, the consignment is thus seen to be consisting of the 12 old and used mechanical embroidery machines along with 12 brand new Jacquard Control Devices. At no point of time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are in excess of the number required for that article when complete are to be classified separately. 4. Cases covered by this Rule are cited in the General Explanatory Notes to Sections or Chapters (e.g. Section XVI and Chapters 44, 86, 87 and 89). 5. In view of the scope of the headings of Sections I to VI, this part of the Rule does not normally apply to goods of these Sections." The General Explanatory Note to Section XVI reads as under :- "For convenience of transport many machines and apparatus are transported in an unassembled state. Although in effect the goods are then a collection of parts, they are classified as being the machine in question and not in any separate heading for parts. The same applies to an incomplete machine having the features of the complete machine, presented unassembled (see also in this connection the General Explanatory Notes to Chapters 84 and 85). However, unassembled components in excess of the number required for a complete machine or for an incomplete machine having the characteristics of a complete machine, are classified in their own appropriate heading." A perusal of GIR 2(a) and the related Explanatory Notes makes it clear that when a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery machines. 14.Had the appellants succeeded in getting the imported goods classified as computerized embroidery machines under a single heading, then the issue of valuation would not have been relevant since the total value declared by them has not been disputed. However, in view of our finding that the old mechanical embroidery machines and the new Jacquard Control Devices etc. are to be separately classified, we are of the view that the break-up of valuation adopted by the Adjudicating Commissioner on the basis of the documents submitted by the appellants themselves requires to be upheld for the purpose of charging duty separately on different goods. We order accordingly. 15.As regards the penalty, we are of the view that in the circumstances of the case including the fact of detailed examination by the panel of experts before allowing provisional clearance, the same is not justified. No doubt, the appellants had not declared the Jacquard Control Devices in the import documents but then, they were of the impression that the entire set of goods merited classification as a single article i.e. computerized embroidery machines. Even the majority of the panel of experts entertaine ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
