1997(11)LCX0150

IN THE CEGAT, EASTERN BENCH, KOLKATA

Shri P.C. Jain, Member (T) and Smt. Archana Wadhwa, Member (J)

COMMISSIONER OF CUSTOMS, CALCUTTA

Versus

HYDROKRIMP A.C. PVT. LTD.

Order No. A/1703/CAL/97, dated 27-11-1997 in Appeal No. C/66/82-B

Advocated By :   Shri R.K. Roy, JDR, for the Appellant.

Shri K.K. Banerjee, Advocate, for the Respondent.

[Order per : P.C. Jain, Member (T)]. - The respondents herein imported certain equipments and machinery and along with that, certain components and raw-materials for manufacture of the end-products. They sought the benefit of the Project Import under the Tariff Heading : 84.66 of the erstwhile Central Excise Tariff, 1975. The benefit was, however, proposed to be denied by the Assistant Commissioner of Customs, vide his letter dated 4-6-82 on the ground that the equipment presently sought to be imported against the Purchase Order dated 4-2-82, could not be considered as being required for the initial setting up of the said industrial plant inasmuch as on scrutiny of the documents submitted by the respondents, it appeared to the Revenue Authority that the Industrial Plant specified by the respondents herein had already commenced production with effect from 2-5-81.

2. On adjudication, the benefit of the said Tariff Heading : 84.66 was denied. Thereafter, the respondents filed an appeal before the Commissioner of Customs (Appeals), Calcutta.

3. They had stated, inter alia, before the said Commissioner, that they had installed part of the Unit’s Machinery and had only a trial production for some of the varieties of hose assemblies. These varieties were not of high pressure hose assemblies. They had not actually produced such variety of products so far, even though the Industrial Licence authorised the respondents to manufacture hose assemblies of high pressure. It was also stated in appeal to the Commissioner (Appeals) that the high pressure hose assembly required imported components and the most essential requirement was the testing machinery which they did not possess. The present consignment, it was pointed out, comprises the components in the high pressure hose assembly of the testing machinery, which is due to be installed shortly to complete the initial setting up of the plant. The respondents herein succeeded before the Commissioner (Appeals) who held that the Project had only been partially implemented and the trial production only had started. It was held by him on the authority of a certificate from the Director of Industries of the local industrial area that with the import of the raw-material and capital goods as per the two Import Licences given to the respondents, the initial setting up of the Project will be complete in all respects. Although the Commissioner (Appeals) was fully aware of the fact that the components for the end-product had been imported, he was of the view that these were permissible under Tariff Heading 84.66.

4. Against the aforesaid judgment of the Commissioner (Appeals), the Revenue has come in appeal now before us. It has been stated that the component parts of the end-product imported by the appellants would not be covered within Clause (d) of Tariff Heading : 84.66(i), inasmuch as it refers to components or raw-materials for the manufacture of the aforesaid items. It is further pointed out with regard to what has been stated in Clauses (a), (b) and (c) namely, machinery including Prime Mover Instrument, Apparatus and Appliance, Control Gears and Transmission Equipment, that they were the aforesaid items. We also observe that apart from the sub-heading (i), there is another sub-heading (ii) under Tariff Heading : 84.66 which speaks of all spare-parts, other raw-materials (including semi-finished materials) imported as a part of a contract or contracts.

5. Learned Advocate, Shri K.K. Banerjee for the respondent firm has reiterated the findings of the lower appellate authority.

6. We have carefully considered the submissions of both sides. We observe that no doubt as rightly pointed out by the Revenue in its appeal that raw-materials and component parts are required for the manufacture of the items mentioned in Clauses (a), (b) and (c) of Tariff Heading 84.66. But we observe that it is the contention of the respondents herein that they imported the components of high pressure hose assembly (an end-product to be ultimately manufactured by them), which is actually required for the purpose of the testing machinery to be installed by them and which was the part of the present consignment. It is for the purpose of testing that these components of the end-product had been imported. Unless the testing machinery is properly tested, the initial setting up of the plant will not be complete.

7. At this stage, learned JDR, Shri R.K. Roy for the appellant Commissioner submits that this contention of the respondents as taken by them before the Commissioner (Appeals) and on the strength of which the respondents’ appeal had been allowed, has not been verified by the lower authorities and therefore, he submits that the matter may be remanded so far as this short point is concerned.

8. We have carefully considered the submissions of both sides. With regard to the respondent’s contention that components and raw-materials referred to in Clause (d) do not relate to the end-products, we have to observe that if they are necessary for the purpose of setting up of the plant as it appears to be for the purpose of testing machinery, as contended by them before the Commissioner (Appeals), then the components of the end-products also will be permissible under the said Tariff Heading so long as they are allowed to be imported against the licence. There is no dispute that the respondents had been allowed to import the said items in question specifically by the licences issued by the I.T.C. Authorities.

9. As regards the question of verification, we observe that the matter is too old now for conducting the verification at this late stage. The matter is of 1982. There is no rebuttal to this specific plea of the respondents taken by them before the Commissioner (Appeals), even though the Revenue Commissioner had attached a copy of the respondent’s appeal before the Commissioner (Appeals) as a part of their paper-book as regards the non-completion of the project.

10. With regard to the finding of the lower appellate authority who has relied upon the Certificate of the Director of Industries of the local industrial area, there is no adequate evidence given by the Revenue to rebut the said evidence of the respondents.

11. Consequently, we do not find any merits in the submissions of the learned JDR and hence we dismiss the appeal of the Revenue.

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Equivalent 2002 (148) ELT 0630 (Tri. - Kolkata)