Tribunal affirms machine classification but remands valuation for reassessment based on legal principles

HERO CYCLES (P) LTD. Versus COLLECTOR OF CUSTOMS, BOMBAY

HERO CYCLES (P) LTD. Versus COLLECTOR OF CUSTOMS, BOMBAY - 2004 (176) E.L.T. 213 (Tri. - Del.) Issues: Classification and Valuation

Classification Issue:
The case involved an appeal by M/s. Hero Cycles (P) Ltd. against the order of the Collector of Central Excise (Appeals) regarding the classification of imported machines. The dispute centered around the classification of JAPAX AC Electric Discharge Cutting Machine Model LS-500 and JAPT 2A/E Numerical Path Control. The Department argued that JAPT 2A/E was a general-purpose machine capable of being used with other machines, while the appellants contended that it was an integral part of the JAPAX NC system. The Tribunal analyzed the facts and the catalogue descriptions. It was observed that JAPT 2A/E could generate NC Tapes for systems other than JAPAX NC, indicating its versatility. The Tribunal concluded that JAPAX AC Model LS-500 and JAPT 2A/E were distinct machines, classifying them under Chapter Heading 84.45/48 and 84.51/55(2) respectively, affirming the lower authorities' decision.

Valuation Issue:
Regarding the valuation issue, the appellants argued that a special price was negotiated for the imported machines, supported by a proforma invoice showing a higher value. They contended that the lower authorities erred in accepting the value of contemporaneous imports without considering the negotiated price. The appellants relied on a Bombay High Court decision in a similar case to support their argument. The Tribunal reviewed the facts and the legal precedent cited. Referring to the Bombay High Court decision, the Tribunal noted that the Department failed to establish the market price and should have accepted the negotiated price. As the lower authorities did not have the benefit of this judgment, the Tribunal remanded the case for further examination in light of the legal principles outlined in the cited case.

In conclusion, the Tribunal addressed the classification and valuation issues raised in the appeal, affirming the classification decision but remanding the valuation aspect for reconsideration based on the legal principles established in the referenced Bombay High Court judgment. The appeal was disposed of with these findings.