1988(08)LCX0001

BEFORE THE CEGAT, SPECIAL BENCH ‘D’, NEW DELHI

 S/Shri V.T. Raghavachari, Member (J) and D.C. Mandal, Member (T)

BHARAT HEAVY ELECTRICAL LTD.

Versus

COLLECTOR OF CUSTOMS

Order No. 512/88-D, dated 11-8-1988, in C/A No. 911/83-D

Advocated By :  S/Shri N.C. Sogani, Const. and R. Subramaniam, for the Appellants.

Shri L.C. Chakraborthy, D.R., for the Respondent.

[Order per : D.C. Mandal, Member (T)]. - This appeal was heard on 9-12-1987 when Shri N.C. Sogani, Consultant argued for the appellants and Shri K.C. Sachar, JDR argued for the respondent Collector.

2. During arguments, Shri Sogani stated that the appellants imported a consignment of Kit Colour Port Repair which was a component part of water level gauges in disassembled condition. The goods were imported against Contract No. SP 1990872, dated 29-9-1979, which was amended by Reference No. 1990872, dated 19-1-1980 and the amendments to the contract are at pages 21(h) to 21(i) of the paper book. Annexure “A1” to the said amended contract, which is at page 21 (i) of the paper book filed by the appellants, describes the goods as boiler component-Spares for Direct Water level gauges - Repair port assembly P/N 923321 consisting of “glass, cushion, gaskets clip ring, mica and sealing gasket”. Value of the goods as per the said Annexure “A1” to the contract is US Dollars 77,968.80. In the relevant invoice and the Bill of Entry No. AD-1342, dated 28-5-1980, the goods were described as “Kit Colour Port Repair” having P/N No. 923321. The goods were assessed under Tariff Heading No. 70.21 of CTA, 1975 at the rate of 100% Ad valorem plus 20% and Additional duty of customs at 35% under TI 23A of C.E.T. as articles of glass.

3. Shri Sogani argued that as per rule 2(a) of the Rules of Interpretation to the CTA, 1975, the goods were assessable as component part of boiler water level gauge under Tariff Heading 90.29 read with 90.24 of the CTA, 1975 and the Central Excise Tariff Item 68 for the purpose of additional duty of customs. The appellants, therefore, filed a refund claim for re-assessment of the goods under the tariff headings indicated above. The refund claim was rejected by the Asstt. Collector of Customs on the ground that the goods on examination were found to consist of gauge glass and gasket. He assessed the goods under Tariff Heading 70.21 of the CTA in the absence of split up value of the goods. Appeal filed against that order was dismissed by the Collr. of Customs (Appeals), Madras by the impugned order. The Collr. dismissed the appeal on the ground that as per catalogue, the pressure gauge consisted of 11 items whereas the consignment consisted of 2 items, viz. gauge glass and gasket, according to the examination report.

4. Shri Sogani argued that it was not correct to say that the consignment consisted of 2 items. He contended that 5 items constituting kit colour port repair were actually imported in the consignment. He also argued that after importation, the goods were supplied to their customers. There was no complaint from those to whom this kit colour port repair was sent alleging that complete assembly consisting of glass, cushion, gasket dip ring, mica and sealing gasket was not supplied.

5. Shri Sachar who appeared on 9-12-1987 for the department argued that examination was done in the presence of importers’ representative and there was no scope for examination report being wrong. There was .no proof that the examination report was wrong. As only 2 items were found during examination, the assessment of the imported goods has been correctly done by the lower authorities.

6. We have considered the arguments of both sides. The Department’s contention is that only gauge glass and gasket were imported in the consignment, whereas the appellants’ contention is that 5 items, as referred to earlier, were actually imported in the consignment. Those 5 items constituted a complete assembly of kit colour port repair for water level gauge. There is also a reference to the examination report in the orders of the lower authorities. The Bench, therefore, wanted to see the examination report recorded on the bill of entry. Accordingly, after hearing both sides, the Bench directed the learned DR to file a copy of the Examination Report. The learned Consultant for the appellants was asked by the Bench to file affidavit from the person conversant with the facts relating to this consignment.

7. When this matter came up for hearing on 3-8-1988, Shri Sogani appeared for the appellants and Shri L.C. Chakraborthy appeared for the respondent. Shri Chakraborthy stated that the Collector of Customs, Madras has reported that the relevant case file and the Bill of Entry containing the Examination Report had been destroyed and hence not available. As per direction of the Bench given on 9-12-1987, the appellants filed an affidavit dated 5-1-1988 affirmed by Sh. R. Mahalingam, Manager (Boiler) of the Appellant company. In the said affidavit, it has been stated that BHEL imported one consignment of kit colour port repair P/N No. 923321 from M/s. Yarway, USA and the same was cleared vide Bill of Entry No. AD-1347, dated 28-5-1980. He has stated that he has personal knowledge of water level guage and its parts and that he had himself seen the goods kit colour port repair P/N No. 923321 consisting of glass, cushion, gasket clip ring, mica and sealing gasket as per BHEL Contract No. SP-1990872, dated 29-9-1979. He has also stated that kit colour port repairs had been imported for supply to various power projects as per contracts and no complaint was received from any of the power projects to whom the goods were supplied. The kit colour port repair comprised of 5 components, namely, glass, cushion, gasket clip ring, mica and sealing gasket.

8. The claim of the appellants was rejected on the ground that only 2 items, viz. gasket and glass were imported. The impugned order-in-appeal of the Collector (Appeals) refers to the Examination report on which reliance has been placed to arrive at a conclusion as to what exactly was imported. The Bench considered it necessary to see the Examination Report to varify as to what was found during the Examination. Unfortunately, the same is not available. In the circumstances, it is necessary to decide the issue on the basis of other evidence on record. During the hearing on 9-12-1987 Shri Sachar, DR stated that if complete gauge had been imported, the same would fall under Tariff Headings claimed by the appellants. On examination of the papers placed before us, we find that the Contract No. SP-1990872 dated 29-9-79 as amended by Amendment No. 1 vide Reference No. 1990872 dated 19-1-80 (copy placed at pages 21(h) and 22(i) of the paper book) was for supply of boiler component kit colour port repair assembly P/N No. 923321 consisting of glass, cushion, gasket clip ring, mica and sealing gasket. The value of kit colour port repair assembly consisting of these 5 items was US Dollars 77,968.80. Copy of the invoice shows the same P/N No. and value as indicated in the amended contract (Annexure-A1 to the contract) and the imported goods have also been described in the invoice as kit colour port repair. The invoice shows the contract No. 1990872. The copy of the Bill of Entry filed before us describes the goods as boiler components, spares for water level gauges and kit colour port repair and the F.O.B. value declared in the Bill of Entry is US Dollar 77,968.80. In the light of the above facts, we are of the view that the same goods as shown in the Annexure-A1 to the contract, were imported under the said Bill of Entry and the invoice. Secondly, in the affidavit, Shri R. Mahalingam, Manager (Boiler) of the appellants’ company has stated that he had personally inspected the kit colour port repair bearing the aforesaid P. No. consisting of glass, cushion, gaskets clip ring, mica and sealing gasket and that the same had been imported and supplied to the various power projects as per contract. There was no complaint from the power projects to whom the imported goods were supplied saying that the kit colour did not comprise of all the 5 items mentioned above. The contents of the affidavit have not been rebutted by the respondents by producing any documentary evidence. Page 4 of the catalogue also shows the five components as marking up the goods imported under item Nos. 3, 6, 7, 9 & 11 of the diagram and chart.

9. In the absence of the Examination Report recorded on the Bill of Entry, we have to base our conclusions on the aforesaid evidence produced before us. An analysis of the above evidence goes to establish that 5 components were imported in the consignment and they constituted kit colour port repair though imported in knocked down condition. We have, therefore, to conclude that the findings of the lower authorities that two components, viz. gauge glass and gasket, were alone imported in the consignment, are not correct. Consequently, the impugned order has to be set aside and the appeal allowed. We order accordingly. Consequential refund admissible to the appellants should be granted after re-assessment of the goods under Tariff Heading 90.29 read with Tariff Heading 90.24 of the CTA, 1975 and Item 68 of the Central Excise Tariff for the purpose of additional duty of customs.

10. The appeal is disposed of in the above terms.

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Equivalent 1989 (42) ELT 670 (Tribunal)