TaxTMI 
TaxTMI 
1991 (5) TMI 146
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....te of filing of Bill of Entry, Date of arrival, and the Entry under which the importers claimed the clearance of the same. Purchase Order No. Invoice No. & Date Description of goods Date of shipment (1) (2) (3) (4) (1) EMSB/ 001/90/E5 EMSB/1003/90E dated 30-10-90. Plastic Extruded Ball Pen Barrels 30-10-90. Vessel ILOVIK (2) EMSB/ 002/90/E5 EMSB/1002/90E dated 19-10-90. Plastic Extruded Ball Pen Knobs & Caps. 19-10-90. Vessel ALCOR (3) EMSB/ 003/90/E5 EMSB/1001/90E dated 5-7-90. Ball Point Refills 5-7-90 Vessel M.V. TIGER RIVER Date of Filing of B/E Date of arrival Licence Produced Entry under which Licence covered. 5 6 7 8 26-11-90. 22-11-90 P/L/3444665/C/XX/16/M/89/64 0001-00-9 dated 25-6-90. Entry No. 665 Appendix 3, part A 31-12-90 1-11-90 P/L3444665/CXX 16/M/89/640001-00-9 dated 25-6-90. Entry No. 665- Appendix 3 Part A 27-790 21-7-90 P/L3444665/C/XX 16 / M 89/64 001-00-9 dated 25-6-90. Entry No. 647-Appendix 3 PART A. 3. Proceedings were instituted against the appellant by the Department by issue of a show cause notice alleging that the goods imported would be covered by Sl. No. 173 of Appendix 2, Part B of t....
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....gainst the appellant in the factual background of this case. The learned Consultant also assailed the reasoning of the learned adjudicating authority, who has placed reliance on the ruling of the Supreme Court in the case of Sharp Business Machines Pvt. Ltd. v. Collector of Customs, reported in 1990 (49) E.L.T. 640 (S.C.). The learned Consultant contended that the learned adjudicating authority has misdirected himself in construing the ratio of the ruling of the Supreme Court in the said case by holding that what cannot be done directly cannot be done indirectly by the importers. It was contended that the essential distinguishing feature in the case before the Supreme Court was that more than 62% of the components of the copiers was not permissible for import under the relevant Policy as it stood at that time and in that particular case the fact remains that the import was 100% clearly over and above 62%. The learned Consultant further urged that the ruling of the Supreme Court in the case of Union of India v. Tarachand Gupta & Bros; 1983 (13) E.L.T. 1456 (S.C), which has not been overruled by the Supreme Court by any Larger Bench, would squarely govern the facts of the case. The l....
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....ent times in the nature of components would, if assembled, result in Ball point pen viz. the 'consumer goods' which would squarely come within the mischief of Sl. No. 172 of Appendix 2, Part B of the Policy dealing with restricted items requiring a specific licence. The learned DR further urged that as rightly held by the learned adjudicating authority following the ratio of the Supreme Court ruling in the case of Sharp Business Machines Pvt. Ltd. cited supra, what is not directly permissible cannot be indirectly done. The learned DR distinguished the ratio of the ruling of the Supreme Court in Tarachand Gupta's case and urged that in regard to the goods dealt with in that case viz. parts of motor cycle and scooter and also regarding the import of motor cycle there was no absolute ban or prohibition. The Supreme Court in Tarachand Gupta's case had to consider only the permissibility of import against certain specific entries. The learned DR further urged that entry 647 deals only with metal caps and parts made of metal and would not cover plastic and, therefore, the plastic refill would not be covered by the same. The learned DR further urged that Sl. No. 665 in Appendix 3 Part A r....
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....of the show cause notice for the purpose of convenience is extracted hereunder : "The import of Ball Point Pen in SKD condition falls under Appendix-2, Part-B, vide Sl. No. 173. But the importers have sought clearance as components as if the goods are falling under Appendix-3, Part-A against production of REP licences. The licences produced are not valid for import of item falling under Appendix-2B. Therefore, it appears that the importers have attempted to clear Ball Point Pens without producing a valid Import Licence, as the goods are falling under Appendix-2, Part-B, Sl. No. 173." In the entire impugned order no finding against the appellant has been given on the ground that the goods were in SKD condition coming within the mischief of Sl. No. 173 of Appendix 2, Part B, in regard to which alone there was a specific charge against the appellant in the show cause notice as would be evident from the extract given above. Be that as it may, assuming for the purpose of argument that the Department would be entitled to proceed against the appellant even otherwise, let me find out as to whether the goods imported can be brought within the mischief of Sl. No. 172 Appendix 2, Part B, f....
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....ire goods arrived on the same day and by the same flight on 30th January, 1987 and the goods covered by the Bills of Entry had been supplied by the same supplier viz., M/s. Paralax Industrial Corp. Hongkong, and the goods were in SKD/CKD condition. It is in that context the Supreme Court held that the licence produced was valid only for certain components and was not valid "for fully assembled copiers". The ratio of the Supreme Court in Tarachand Gupta 's case, in my view, would apply to the facts of the present case and it should be noted that Tarachand Gupta's case has also been decided by a Bench of two Judges of the Supreme Court as the case of Sharp Business Machines referred to in the impugned order. The Supreme Court in Tarachand Gupta's case had to construe the scope of Entry 295 and 294. Entry 294 dealt with import of motor cycles and scooters in CKD condition and Entry 295 dealt with articles for use as parts and accessories of motor cycles and scooters. The Supreme Court repelled the contention of the Department that by importing parts of motor cycles and scooters in CKD condition the importer had contravened Entry 295 and also the argument that the importer had done ind....
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....ccessories. 25. That being so, if an importer has imported parts and accessories, his import would be of the articles covered by entry 295. The Collector could not say, if they were so covered by entry 295, that, when lumped together, they would constitute other articles, namely motor cycles and scooters in C.K.D. condition. Such a process, if adopted by the Collector, would mean that he was inserting in entry 295 a restriction which was not there. That obviously he had no power to do. Such a restriction would mean that though under a licence in respect of goods covered by entry 295 an importer could import parts and accessories of all kinds and types, he shall not import all of them but only some, so that when put together they would not make them motor cycles and scooters in C.K.D. condition." I should like to note that the ratio of the Supreme Court ruling in Tarachand Gupta's case is by a Bench of two Ld. Judges and has been only distinguished by the Supreme Court in Sharp Business Machines case by a Bench of the two Judges. The ratio of the West Regional Bench of the Tribunal in Susha Electronics Industries case also deals with similar aspects and the ruling also would gover....
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.... To a specific query in this regard, the Ld. DR was not able to satisfactorily offer any explanation. In view of the ratio of the Supreme Court .in Tarachand Gupta's case and also the view taken by the West Regional Bench of the Tribunal in the case of Susha Electronics Industries, I do not find any force in the contention of the Ld. DR that the entirety of the product has to be looked into and individual sense cannot be looked into. As rightly contended by Shri Vijayaraghavan, the Ld. Consultant, the Department cannot for the purpose of duty assessment under the Customs Act treat parts separately and for the purpose of judging the validity try to correlate the various parts imported at different points of time by two Bills of Entry and to give a finding that all the parts and components should make for a full Ball Point pen. If the contention of the DR were to be accepted, it may lead to an anomalous position of the Department not being in a position to assess the goods as and when imported and Bill of Entry filed and to wait to find out as to whether the imports of other component parts have already taken place or likely to take place at a future date and dovetail all together fo....