2004(09)LCX0099
IN THE CESTAT, WEST ZONAL BENCH, MUMBAI
S/Shri S.S. Sekhon, Member (T) and T. Anjaneyulu, Member (J)
GOEL PRIVATE LIMITED
Versus
COMMISSIONER OF CUSTOMS, (ACC), MUMBAI
Order No. A/1418/2004-WZB/C-I, dated 10-9-2004 in Appeal No. C/429/98-Bom.
CASES CITED
D.P. Anand v. T.M. Thakare & Co. 1960(08)LCX0001 Eq 2000 (126) ELT 0090 (Bom.) Referred......................... [Para 2(a)]
Girdharilal Bansidhar v. Union of India 1964 (7) SCR 62 Referred.................................. [Para 2(a)]
Sharp Business Machines Pvt. Ltd. v. Collector 1990(08)LCX0089 Eq 1990 (049) ELT 0640 (S.C.) Referred [Paras 2(a), 2(b)]
Sony India Ltd. v. Commissioner 2002(05)LCX0063 Eq 2002 (143) ELT 0411 (Tribunal - LB) Followed [Paras 2(a), 2(b)]
Union of India v. Tarachand Gupta 1971(01)LCX0007 Eq 1983 (013) ELT 1456 (S.C.) Referred...................... [Para 2(a)]
REPRESENTED BY : Shri Naresh Thakkar, Advocate, for the Appellant.
Shri K.K. Srivastava, JDR, for the Respondent.
[Order per : S.S. Sekhon, Member (T)]. - Appellants are manufacturers of watches. They filed BEs No. 2063 & 2064 both dated 4-12-97 seeking clearance of goods declared as Watch ports, Assorted Dials, sets of hands in BEs 2063 & Quartz movements, Automative movements and Mechanical movements in BE 2064 seeking assessment under Headings 9111.30, 9114.30, 9114.90 in BE 2063 & 9108.99 in BE 2064. The goods were examined, it appeared, to the assessing officers, that goods taken together, in the two BEs, are forming complete watch. Thereby it was considered that 1275 watches of Raymond Weil brand in completely knocked down condition were imported which should be classified under Heading 9107.21/9101.29 and by this modus, it was alleged that the appellant had attempted to evade duty of Rs. 7,60,549/- and since import of watches was restricted and required a licence, and no import licence being produced it was a case of raising liability to confiscation under Section 111(d) and penalty under Section 112. The show cause notice was waived, hearing given and the impugned order arrived at directing -
1. the goods imported order Two BEs Nos. 2063 & 2064 both dated 4-12-97 shall be assessed as complete watches under relevant Tariff headings applicable to watches & duty be charged accordingly.
2. the entire consignment covered by said two BEs, is confiscated under section 111(d) of the Customs Act, 1962. However, I allow redemption of the goods in fine of Rs. 3,50,000/- (Rupees Three Lakhs Fifty Thousand Only) under section 125 of the Act.
3. I impose a penalty of Rs. 25,000/- (Rupees Twenty Five Thousand Only) M/s. God Private Ltd., Mumbai under section 112 of the Act.
Hence this appeal.
2. Heard both sides and considered the material, it is found -
(a) The question of Commissioner Customs powers to have jurisdiction to ascertain whether the goods imported were spare parts or full machines, when the indents or all goods imported on separate BEs, are taken together, i.e. would it constitute import of a full entity, in completely knocked down condition, has been subject-matter for consideration by the High Court and Supreme Court. Perusal of these decisions as in the case of D.P. Anand v. T.M. Thakare & Co. (Civil Appeal No. 4 of 1959) decided on August 17, 1960 [1960(08)LCX0001 Eq 2000 (126) ELT 0090 (Bom.)] by the High Court wherein it was held that Collector of Customs was only to ascertain whether the goods such as they were; were covered by the licence, further foray to find out, whether when put together they would constitute a Motor Cycle, as in that case, was not called. The letter Patent Bench, in appeal, held that the decision of the Supreme Court in the case of Girdhari Lal Bansidhar [1964 (7) S.C.R. 62] did not overrule the Anands case [See U.O.I. v. Tarachand Gupta, 1971(01)LCX0007 Eq 1983 (013) ELT 1456 (S.C.)]. In the case of Sharp Business Machines [1990(08)LCX0089 Eq 1990 (049) ELT 0640 (S.C.)], the Apex Court, after examining the facts in that case, of 14 fully semi-finished Plain Paper Copies imported after dismantling them held that when taken together, as imported, on different BEs, there was a violation of the condition of 62% component imports permitted as per the Licence. It was further held that what was not permitted directly cannot be allowed indirectly. They upheld the liability to confiscation under Section 111(d). The Larger Bench of the Tribunal, in the case of Sony India Ltd. [2002(05)LCX0063 Eq 2002 (143) ELT 0411 (Tri. - LB)], took the view that nature of restriction or prohibition has to be existing and considered, to apply the law as laid in Sharp Business Machine case or of Girdhari Bansidhar case. Thereafter, the Larger Bench in Sony India, examining the scope of interpretative Rule 2(a) of classification, noted with approval the view taken by a German Court, that components have to be presented together, for assessment, at the same time for application of interpretative Rule 2(a) (see para 34 of the Larger Bench decision).
(b) (i) Considering the above position, and finding that in this case, all components are admittedly presented at the same time i.e. on 4-12-1997 on Two BEs, for assessment, only very few insignificant parts were lacking. Therefore, it is to be held, that, there is no reason why following the Larger Bench decision in case of Sony India [2002(05)LCX0063 Eq 2002 (143) ELT 0411 (Tri. - LB)] the present import not be considered as that of watches for purpose of assessment.
(ii) The contention of the Learned Advocate for the appellant of the nature of assembly of watch & operations to be conducted subsequent to the import do not enthuse us to arrive at and consider the imports to be of watch parts and movements.
(iii) Reliance on the decision dated 15-10-98 of Commissioner of Customs, Bombay, by the appellant arrived in their own case that application of the law is Sharp Business Machines case was not applicable in the present case, will not help the importers. Since that was a decision arrived at on valuation of the goods and all the imports in that case were not considered as presented, for assessment, at the same time (see paragraph 30 of that order) as is the position in this case.
(iv) The now settled position is to assess goods, as entire machines presented for assessment, it cannot be deviated from, if the policy for import of components is free, while that of the entire machine is restricted/prohibited, as in the case of Sharp Business Machines and there is evidence of an attempt to do what is not permitted directly; or Rule 2(a) of the Interpretative Rules is applicable, by presenting, all the essential components for assessment together, as in this case.
(c) In the case before us, Policy for import of watches is not free, while imports of movements and parts is and both BEs are imports presented together, at the same time for assessment. The classification as watch is to be upheld. Once, it is found that the import is to be considered that of watches and not of parts and movements. Then there is no infirmity found in the order impugned. The liabilities of duty and redemption fine are to be upheld.
(d) As regards penalty of Rs. 25,000/- since there is no misdeclaration of the goods or and value, and the liability to confiscation is being arrived at only because the two BEs have been presented together and by working the provision of Interpretative Rule 2(a), there is no case to uphold the penalty. The same is set aside.
3. Appeal partly allowed in above terms.
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Equivalent 2004 (178) ELT 1010 (Tri. - Mumbai)