2001(09)LCX0227

IN THE CEGAT, WEST ZONAL BENCH, MUMBAI

Ms. Jyoti Balasundaram, Member (J) and Shri J.H. Joglekar, Member (T)

ESSAR OIL LTD.

Versus

COMMISSIONER OF CUSTOMS, KANDLA

Order No. 2903/2001-WZB/C-I, dated 27-9-2001 in Appeal No. C/339/96-Mum.

Advocated By :   Shri V.S. Nankani, Advocate, for the Appellant.

Shri J.M. George, DR, for the Respondent.

[Order per : J.H. Joglekar, Member (T)]. - The appellants imported ‘industrial camp site units - portacabins’. The shipment apart from parts required to construct such cabins also included a number of other items such as furnitures, gas range, tea coffee machine, water cooler, air-conditioners and kitchen equipments such as frying pan, crockery etc. The clearance was claimed under para 22 of Exim Policy, 1992-97 which permitted import of capital goods under OGL. The assessing officers were of the opinion that the said articles would not fall under Heading 9406 but would attract classification under respective headings. It was also held that such goods would fall outside the scope of para 22 and thus required specific licence for their importation. After hearing the assessee, the Commissioner passed the order. He observed that the phrase “prefabricated housing materials” did not cover the cabins. He, therefore, confiscated the entire shipment but allowed its redemption against fine of Rs. 30 lakhs. He also directed assessments to be done on merits of articles. He did not, however, impose any penalty. The present appeal is against this order.

2. Shri Nankani shows us Note (4) to Chapter 94 which reads as follows :-

“For the purposes of heading No. 94.06, the expression “prefabricated buildings” means buildings which are finished in the factory or put up as elements, presented together, to be assembled on site, such as housing or worksite accommodation, offices, schools, shops, sheds, garages or similar buildings.”

He submits that by virtue of this note, all the equipments would be eligible for classification under 9406. He also cited the following sub-note from the HSN :-

“The buildings of this heading may or may not be equipped. However, only built-in equipment normally supplied is to be classified with the buildings. This includes electrical fittings (wiring, sockets, switches, circuit-breakers, bells, etc.) heating and air-conditioning equipment (boilers, radiators, air-conditioners, etc.) sanitary equipment (baths, showers, water heaters, etc.) kitchen equipment (sinks, hoods, cookers, etc.) and items of furniture which are built-in or designed to be built-in (cupboards, etc.).”

3. Shri George submits that interpretative sub-notes do not permit inclusion of all the furniture, etc.

4. We have perused the sub-notes. By virtue of the sub-notes, the items which are fitted as stated would merit such inclusion. But furniture such as cots, tables, chairs, etc., would not be covered under this sub-note or would frying pans, tea making machines, crockery and kitchen equipments such as gas range would be covered thereunder. Air-conditioners, however, would merit such inclusion.

5. Shri Nankani, however, submits that at this stage, he does not request for re-opening of the assessment but would seek substantial relief in the quantum of fine. We find that on interpretative of the sub-notes, a number of items would qualify to be covered under this Appendix. We also do not see any merit in the Commissioner’s artificial interpretation that cabins are not included in the term ‘material’. We also note that the importers had used this material for their own use only. Considering these factors, we deem it proper to reduce the quantum of fine from Rs. 30 lakhs to Rs. 5 lakhs (Rupees five lakhs only). Subject to this modification, the appeal is otherwise rejected.

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Equivalent 2002 (141) ELT 0408 (Tri. - Mumbai)