1984 (11) TMI 206 - AT - Customs

Tribunal grants duty benefit for imported measuring machines under Notification No. 49/78

The Tribunal upheld the decision of the Appellate Collector, granting duty benefit under Notification No. 49/78 for imported measuring machines. The ... Exemption Notification Issues:1. Assessment of duty under Notification No. 49/78 for imported measuring machines.2. Interpretation of Customs Act, 1962 regarding the eligibility for duty benefit.3. Compliance with Accessories (Condition) Rules, 1963 for duty assessment.4. Classification of imported machines under Notification No. 49/78 based on functionality.5. Consideration of essential functions and high accuracy standards for duty classification.6. Determination of compulsory supply and pricing inclusion for duty benefit eligibility.Analysis:1. The case involved the assessment of duty for imported measuring machines under Notification No. 49/78. The Appellants imported machines were initially assessed at the standard rate without the benefit of the notification, leading to appeals against the assessment by the Assistant Collector of Customs, Bombay. The Appellate Collector admitted the appeals and ordered a refund, extending the benefit of the said notification to the importers.2. The matter was brought before the Tribunal due to a Show Cause Notice issued under Section 131(3) of the Customs Act, 1962. The JDR for the Appellants argued that the Appellate Collector's orders were erroneous, citing reasons such as non-compliance with the Accessories (Condition) Rules, 1963 and the imported machines not meeting the criteria specified in Notification No. 49/78.3. The Advocates for the Respondents contended that the machines imported, along with the necessary accessories, were designed to perform all functions as per the notification's specifications. They argued that the accessories were integral fittings of the machines and should be entitled to relief under the Customs Tariff Act, 1975. The Tribunal considered these arguments along with the Rules for Interpretation and the actual trade practices in the industry.4. The Tribunal analyzed the functions of the imported machines and accessories to determine if they could be considered a single assembled article. It was emphasized that the essential question was whether the imported items, when combined, enabled the machines to perform their designated functions. The Appellate Collector's detailed analysis of the functions and conclusions was deemed appropriate and unexceptionable.5. Regarding the high accuracy standards, it was noted that the essential criterion for classification under the notification was whether the machines could perform the functions specified, rather than the subjective assessment of accuracy. The Tribunal agreed with the Appellate Collector's approach in this regard.6. The Tribunal also addressed the issue of compulsory supply and pricing inclusion. It was established that compulsory supply should relate to the functions intended to be performed by the machine, and the pricing inclusion should consider the trade practices and part-wise break-up of the total price. Ultimately, the Tribunal upheld the decision of the Appellate Collector and dismissed the appeals, affirming the duty assessment under Notification No. 49/78 for the imported measuring machines.