2008 (7) TMI 202 - AT - Customs

Tribunal upholds appeal on imported machine assessment, emphasizing intention in duty determination

COMMISSIONER OF CUSTOMS (IMPORT), MUMBAI Versus KRISHNA GEARS (P) LTD.

The Tribunal rejected the Revenue's appeal and affirmed the Commissioner (Appeals)'s decision to set aside the assessment on the imported machine. The ... Confiscation - Allegation of import of used parts of the capital goods - imported goods described as “used horizontal boring machine in dismantled condition” - In the absence of any challenge, that the imports, which were made by the respondents was of complete machine & declared as a machine, in all three Bills of Entries and a factual findings as to that being the same, it has to be accepted that the respondents had every intention to import “used Horizontal Boring Machine”, not parts of CG Issues:- Interpretation of import regulations for second-hand parts of machinery- Classification of imported goods as capital goods- Compliance with EXIM Policy 1997-2002- Assessment of goods under Customs Act, 1962- Clubbing of part shipments for assessmentInterpretation of Import Regulations for Second-hand Parts of Machinery:The case involved the importation of a 'used horizontal boring machine' in dismantled condition. The appellant argued that the goods were parts of a capital goods machine and should be assessed accordingly. The Department contended that the import violated the EXIM Policy 1997-2002, which restricted second-hand parts of machinery without a specific import license. The Tribunal considered various precedents and emphasized the importance of intention in importation to determine duty evasion.Classification of Imported Goods as Capital Goods:The Commissioner (Appeals) set aside the assessment, concluding that the appellant had imported a complete machine in dismantled condition. The Tribunal noted that the goods were declared as a machine in all three bills of entry, supporting the contention that the import was of a used capital goods machine. Citing a Supreme Court judgment, the Tribunal highlighted that intention plays a crucial role in importation matters involving duty evasion allegations.Compliance with EXIM Policy 1997-2002:The Department argued that the import was in violation of the EXIM Policy 1997-2002 due to the lack of a specific import license for second-hand parts of machinery. However, the Tribunal found that the appellant's intention to import only used capital goods, as declared in all bills of entry, aligned with the requirements, as supported by relevant case law.Assessment of Goods under Customs Act, 1962:The Department raised concerns about the assessment of the imported goods under the Customs Act, 1962, specifically highlighting the confiscation and penal action provisions for non-compliance with import regulations. The Tribunal, after considering the submissions and records, upheld the Commissioner (Appeals)'s decision to set aside the assessment based on the factual matrix and the appellant's intention to import a complete machine.Clubbing of Part Shipments for Assessment:The Department contended that the goods imported could not be classified as a whole unit under Project Import Regulations, 1986, as they were not eligible for clubbing. However, the Tribunal found that the appellant's import of a used horizontal boring machine in dismantled condition, supported by the documentation and factual findings, justified the classification as a single unit of capital goods. The Tribunal rejected the Revenue's appeal and upheld the decision of the Commissioner (Appeals).In conclusion, the Tribunal rejected the Revenue's appeal, affirming the Commissioner (Appeals)'s decision to set aside the assessment on the bill of entry for the imported machine, considering the facts, intentions of the importer, and relevant legal provisions and precedents.