2008 (5) TMI 13 - SC - Customs

Supreme Court affirms exemption for imported crane under Heading 84.26, values at US $34,84,500

The Supreme Court upheld the validity of exemption notification No.11/97-Cus and classified the imported crane as a mobile crane under Heading 84.26, ... Exemption notification - mobile crane - material handling equipment - classification under Heading 84.26 - interpretation of exemption notification - customs valuation of second hand machinery - Rule 9(2)(b) of the Valuation Rules - violation of principles of natural justiceMobile crane - material handling equipment - classification under Heading 84.26 - interpretation of exemption notification - Whether the imported crane together with the selfpropelled modular transport system (SPMTs) qualified for exemption under the notification as a mobile crane or as material handling equipment and was correctly classifiable under Heading 84.26 rather than under a motorvehicle heading. - HELD THAT: - The appellate authorities and the Tribunal found as a fact that the imported equipment, though in two parts and manufactured by different makers, was imported as an integral configuration to provide mobility to the crane for erection work across a large refinery site. The notification must be construed in a contextual and purposive manner to give effect to the object of exemption for goods required in setting up a crude petroleum refinery. A crane that can be relocated for operations at different sites is within the ordinary meaning of a mobile crane, and the inclusion of a propelling base to confer mobility does not disentitle the assembled unit from the exemption. Notes regarding machine components presented separately must be read in context; where components are imported together on the same bill of entry as a specific configuration contributing to a single function, classification under the heading appropriate to that function (here, Heading 84.26) is permissible. Overlapping entries in List 8A are to be given a broad meaning consistent with the purpose of the notification; consequently the Tribunal and Commissioner (Appeals) were correct in holding that the entire assembled equipment fell within the scope of the notification either as a mobile crane or alternatively as material handling equipment covered by the list. [Paras 17, 18, 20, 22]The equipment as imported (crane together with SPMTs forming the specific assembly) was entitled to exemption and correctly classifiable under Heading 84.26 (alternatively covered by the material handling equipment entry).Customs valuation of second hand machinery - Rule 9(2)(b) of the Valuation Rules - Whether the declared invoice value of the imported secondhand crane should be enhanced by revenue and whether the addition of 1% landing/transportation charges could be sustained. - HELD THAT: - The Commissioner (Appeals) and the Tribunal examined valuation evidence, including the chartered engineer's certificate as permitted under the EXIM procedures for secondhand capital goods, and found the declared invoice value to be plausible. The comparative valuation relied upon by the assessing authority compared dissimilar and noncontemporaneous goods (different models, different manufacture years and different configurations) and therefore could not be legitimately applied under the Valuation Rules or under bestjudgment principles. Addition of 1% as landing/unloading charges to the assessable value was held to be contrary to Rule 9(2)(b)