TaxTMI 
TaxTMI 
1992 (4) TMI 123
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....unit. In accordance with the 100% E.O.U. Scheme, entire plant at Randia was declared as a Warehousing Station by the Government of India by issuing an appropriate Notification under Section 9 of the Customs Act. The entire factory premises of the Company was licensed as a private bonded Warehouse in accordance with the relevant provisions of the Customs Act, 1962 and/or the 100% E.O.U. Scheme. The imports made by the respondents, i.e., capital goods components/spares etc. during the period from October 1981 - Dec. 1983 at the Ports at Vishakhapatnam and Calcutta were duly assessed by the Customs Authorities by allowing the exemption under the said Notification No. 13/81-Cus. Subsequently, it was alleged by the Department that these spares brought and warehoused at the Port bonded Warehouse at charge Chrome Plant Randia are not eligible to avail exemption under Notification No. 13/81-Cus., dated 9-2-1981. It was pointed out by the department that prior to 19-3-1984, when Notification No. 86/84-Cus., dated 19-3-1984 was issued amending Notification No. 13/81-Cus., dated 9-2-1981 only capital goods raw materials and components were eligible to get exemption under Notification No. 13/8....
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....thout such dozer shovels production will not be possible in the Plant, as such, import of such Shovels will be covered by Notification No. 13/81-Cus. With these observations, the matter was remanded to the original authority with a direction to re-examine the whole issue in greater depth and if necessary, in consultation with the higher authorities. Aggrieved by the said impugned orders, the Department has come before us by way of these two appeals. 6. Shri S.K. Roy, learned S.D.R. for the Revenue justified the action of the Department in raising the demand. He said that 'Spares' were not included in the Notification No. 13/81-Cus. but they were included by amended Notification No. 86/84 dated 19-3-1984. The spares were imported by the respondents prior to 19-3-1984 and they were not eligible for exemption. There was a mistake on the part of the Department in allowing the exemption at the time of importation and subsequently demand was raised as there was a short levy at the time of importation. He said that the demand is not barred by time since the goods were under bond. As regards importation of spares of Dozer Shovels in Appeal No. C/2117/89, he submitted that during the mat....
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....y at Calcutta and Vishakhapatnam in accordance with 100% E.O.U. Scheme. Bills of entry for warehousing were duly assessed and the goods were allowed to be removed to the Warehouse and entire Plant at Randia was declared as a Warehousing station under 100% E.O.U. Scheme. In respect of warehoused goods under Section 68 of Customs Act, the duty becomes leviable only if the bill of entry for home consumption is filed and is assessed if the goods are intended to be cleared for home consumption. So long as the goods continued to remain in the warehouse, there is no question of any duty being levied or demanded in respect of such goods. (iv) Next he contended that even on merits the exemption under Notification No. 13/81-Cus. is clearly available in respect of the goods in question. He said that in the instant case none of the goods in question were removed from the Warehouse as entire Plant was a Warehouse and in respect of the Warehouse goods duty is payable only at the time of home consumption and at the rates in force at the time of actual removal from the Warehouse. Further, it was submitted that under 100% E.O.U. Scheme it was specifically provided that the import of capital good....
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....but play a very important part in process of manufacture. This dozer shovel cannot be treated at par with other material handling equipments such as fork lift Trucks, Lifts, Escalators, Conveyors etc. That is why both in the Customs Tariff as well as in the Central Excise Tariff a distinction has been maintained by classifying these two items under different head. For instance, in the Customs Tariff 1986-87 material handling equipments were classified under Heading Nos. 84.27,84.28 etc. and on the other hand shovels were classified under Heading No. 84.29. Similarly in the Excise Tariff 1986-87 they were classified under different heads as different products. To a query from the Bench whether there has been distinction between manufacture and production, he said that this issue was considered by the Supreme Court in the case of Collector v. Rajan Chemical Works, reported in 1991 (55) E.L.T. 444 but without going into that issue, this point can be considered in favour of the party taking into the fact that this machinery was used directly in connection with the production and, as such, spares imported for the said production machinery are entitled to the exemption granted under the ....
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.... Officer or by the Collector within 5 years from the relevant date on the ground of wilful misstatement or suppression of facts. 'Relevant date' as explained in Section 28(3) of the Customs Act is relevant and is reproduced as under :- "28(3). For the purposes of sub-section (1), the expression "relevant date" means:- (a) in a case where duty is not levied, the date on which the proper officer makes an order for the clearance of the goods; (b) in a case where duty is provisionally assessed under Section 18, the date of adjustment of duty after the final assessment thereof; (c) in a case where duty has been erroneously refunded, the date of refund; (d) in any other case, the date of payment of duty. If the date of importation or assessment is taken as relevant date, the demand is barred by time since Show Cause Notice was issued beyond the period of six months and neither it was issued alleging suppression of facts nor issued by the Collector to invoke larger period. It was contended on behalf of the Department that demand is not barred by time since the goods continue to be in bond. Admittedly, the entire factory premises of the Respondent Company was licensed as ....
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....ufacture and functioning of the Dozer Shovel, it cannot be said that it is a mere material handling equipment. It plays an important part in the process of production. Simply because in the course of performing its function in the process of production the said Dozer Shovel also moves the materials, the same cannot be treated as material handling equipments. The handling of the raw materials and other activities of the Dozer Shovel are integrally connected with the process of production. Going by the nature of the Industry and the various processes employed in connection with the production of the finished product, Dozer Shovel is an essential and integral part of the production machinery at the plant. It is neither possible nor feasible to carry on such activities without Dozer Shovel as it was duly certified by the Technical Experts. Further there is a distinction in classifying the Dozer Shovel different from material handling equipments under Tariff entries in the Excise Tariff as well as Customs Tariff which proves the Dozer Shovel is different from mere material handling equipments which strengthens our view. In the view we have taken, we hold that spares of Dozer Shovels are....
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.... dozer shovels imported vide the aforesaid bill of entry No. 214 dated 21-2-1984 would be sustainable. This point I may mention at this stage does not appear to have been dealt with by the learned Judicial Member in his proposed order. For other bills of entry, I agree with the learned Brother that "spares for dozer shovel" are "spares for production machinery" as described by him in para 11 of his judgment inasmuch as having regard to the peculiar process of production in this case, the final product "charged Chrome" would not have come into existence but for the use of the dozer shovel. 15. Nevertheless, the aforesaid finding on the merits in respect of bill of entry No. 214 dated 21-2-1984 is only of academic interest in view of the findings I propose to give in respect of common issues involved in both the matters because any demand of duty would be hit for lack of jurisdiction or on time bar for the reasons set out below : 15.1 One of the points urged by the learned advocate for the respondents is that show cause notices for demands issued by the Superintendent of Central Excise, In-charge of the respondents' factory is clearly beyond jurisdiction inasmuch as the goods u....
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....o elements thereof namely, valuation of the goods and the rate of duty. The original Custom House has applied its mind to the documents submitted by the respondents in respect of both the aspects i.e. valuation and the rate of duty, latter of which is dependent on the classification of goods under the Customs Tariff. If any fresh look is required to be undertaken by way of reassessment in respect of the warehoused goods it can fairly be undertaken only by the concerned Customs House which has made the original assessment. It is not for the other Customs authorities to question the said assessment. In terms of Section 15 of the Customs Act rate of duty is, however, to be charged as is applicable on the date of removal of the goods in the warehouse. It is only this aspect i.e. the rate of duty in terms of Section 15 of the Customs Act, without disturbing the classification or rate of duty of the goods, that the officers having jurisdiction over the warehouse will have the authority to apply. If any other aspect of assessment is to be reopened the proper authority, as has been held in the citations relied by the respondents, would be the original Custom House which made the assessment....
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....y/short-levy has taken place. Question of application of Section 28 for payment of duties not levied, short-levied or erroneously refunded - arises only when an assessment has already taken place resulting in non-levy or short-levy or in refund of duty. Therefore, it is inconsistent for the department to say that there has been a short-levy or non-levy when it urges that no assessment has taken place. Clause (a) of sub-section (3) of Section 28 reads as follows :- "(a) in a case where duty is not levied, the date on which the proper officer makes an order for the clearance of the goods." I am of the considered view that the word 'clearance' without any further qualification as to the nature of clearance whether for home consumption or otherwise has been advisedly used in this clause. The word 'clearance' would cover within its scope clearance of the goods for home consumption as well as removal of the goods for the warehousing. 'Clearance of the goods for home consumption' has been in my view described in another manner in bill of entry form for home consumption by the expression "passed out of customs charge" to be endorsed by the proper officer under Section 47 of the Custo....