AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
1998 (11) TMI 250
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....to which items listed at Appendix 3, Part A can be imported. They also claimed classification of the same components under Heading 8450.90 as components of washing machine. After 100% examination of the said four consignments, the Assistant Commissioner, SIB issued show cause notice to the appellants alleging that the items imported could constitute essential character of washing machine and can be assessed as such in terms of Rule 2(a) of rules of interpretation of the Customs Tariff Schedule. Invoking the same rule, it was stated that an article which is incomplete or semi-finished has the essential character of complete or finished article and it has to be assessed as complete article for the purpose of classification of the goods under Customs Tariff. It was also found that the goods were packed in single carton even though the components were found invoiced separately. In the packing condition, the goods were found arranged and fixed in such a way that it appeared as a washing machine. It was stated that as import of consumer goods in SKD condition is restricted under the import policy, the same could not be imported. On investigation and inspection of the appellants' factory ....
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.... plus 50% SED. It was alleged that a small screw driver was sufficient for assembly of those parts to make the washing machine. Import of such consumer goods viz. washing machine in SKD condition is restricted under the import policy AM 90-93 vide Appendix 2 Part B, Sl. No. 173. The import licence produced by the appellants was valid for the import of items falling under Appendix 3, Part A of AM 90-93 and the same licences were not valid for import of item under Appendix 2, Part B. It was alleged that the goods imported under description washing drum/drying drum were not individual parts as reflected in the invoice but they were assembled together with other parts like impeller, plastic pulley and housing. Therefore, the import under the description washing drum were not mere washing drum, and hence it fell outside scope of entry under Sl. No. 580 of Appendix 3 Part A of AM 1988-91 policy. It was stated that the import of consumer goods under SKD condition is restricted. The importer had attempted to clear the washing machines in SKD condition by declaring the same as components of washing machine. The importers were indirectly importing washing machine in SKD condition which were ....
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....ent of appropriate customs duty. Hence they were called upon to explain as to why the goods should not be confiscated under Section 111(d) and 111(m) of the Customs Act, 1962 and also penalty imposed under Section 112(a) of the Customs Act, 1962. 7. In their reply, the importers submitted that they were a small scale industrial unit and they were doing the manufacturing activity of assembling domestic washing machines. Para 58(1) of the Import Policy for AM 90-93 lays down that requirements of raw materials, components etc. can be met by importing such raw materials and components inter alia under Open licence (OGL). Similarly para 58(4) of import policy lays down that import of raw materials, components and consumables is also permissible under the import- Export Policy. The appellants stated that actual user can meet the requirement of the raw materials, components by availing different licensing provisions simultaneously. 8. The appellants denied the items being incomplete washing machine. They stated that washing drum/drying drum is a one piece moulded component and that the same is never manufactured and marketed as two separate drums. The appellants disputed the i....
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....ot be simply discarded. The department had produced such evidence for value in respect of washing drum/dyring drum and impeller, which he considered sufficient for deciding the value. He has noted that the importers did not produce any other evidence contrary to the evidence produced by the department. The value as per the evidence is Rs. 370/- per set for the above said three items. In respect of plastic pulley, and housing parts, the value appraised by the Department is Rs. 80/- per set which in his opinion was reasonable. He noted that the importer did not produce any other evidence to show that such parts were being imported at a lower price. Therefore, he fixed the value at Rs. 450/- per set for washing drum/drum assembly consisting of impeller, pulley and housing under Rule 8 of Valuation Rules. He has noted that the value so fixed for washing drum/drying drum assembly under import is consistent with the principles and general provisions of Valuation Rules, 1988 Section 14(1) of the Customs Act, 1962. He refrained from imposing any penalty on the importer under Section 111(m) and Section 112 of the Customs Act, 1962 on account of the enhancement of value. 11. Regarding ....
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.... contends that the judgment of the Hon'ble Supreme Court rendered in the case of Sharp Machines as reported in 1990 (49) E.L.T. 640 is distinguishable and the same has been said so in the case of Vishal Electronics reported in 1998 (102) E.L.T. 188. He contends that the definition of components includes sub-assemblies and therefore the importer being actual user industrial he is entitled to import this item in terms of Sl. No. 1 at Appendix 6. He further contends that washing drum and drying drum are one piece components as it had been welded together and it is not comparable to the goods imported by Vijay Appliances. He contends that in the present case, the importation is from Dubai while the import in the case of Vijay Appliances was from Singapore. He contends that the items are not comparable as the goods did not arise from the same place. He submitted that since the two importations are from two different countries they are not comparable goods for the purpose of classification. He further submitted that Rule 2(a) of the General Rules for Interpretation of Customs Tariff cannot apply in the present case for interpreting the import policy. He relied upon the judgment in the ca....
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....n and (3) the aspect pertaining to violation of the provisions of Import and Export Policy and the validity of the import under OGL as claimed by the appellants. As can be seen from the facts of the case itself, the appellants have declared the goods as components of washing machine and claimed classification under Heading 8450.90 of the Customs Tariff, while the authorities have proceeded to classify the goods, as complete washing machine under Chapter Heading 8450.19 of the CTA as washing machine by applying the provisions of Rule 2(a) of the General Rules for Interpretation of Customs Tariff under SKD/CKD condition. On consideration of the grounds urged by the appellants we notice that there is no dispute about the item being in SKD/CKD condition and the packing on examination also clearly indicated that the goods attained the characteristics of a fully finished machine. Therefore, invocation of Rule 2(a) of the General Rules for Interpretation of the Customs Tariff for the purpose of classification of the items adopted by the department is totally justified. Rule 2(a) of the General Rules for Interpretation of Customs Tariff clearly states that "any reference in a heading to an....
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.... Plastic front panel: 15.00 DHS Washing drying drum : 56.00 DHS Drainage hose pipe : 4.00 DHS Outlet pipe : 3.00 DHS Plastic cover rinser : 1.00 DHS Plastic topo covers : 4.00 DHS Plastic lid cover : 3.00 DHS Plastic base : 16.00 DHS On/Off switch : 2.00 DHS Knobs : 1.00 DHS Push button : 1.00 DHS The above parts were found in SKD condition and hence these parts cannot be considered as mere `parts' but they have been taken as complete machine in view of the fact that items had acquired essential character of finished or complete article. Therefore, we uphold the order pertaining to classification of the goods. In this regard we also rely upon the judgment in the case of Sipani Automobiles v. C.C.E., reported in [1997 (72) ECR 948 = 1996 (16) RLT 646] wherein cars imported in SKD/CKD condition were made out to be cars on applicability of Rule 2(a) of the General Rules for Interpretation of Customs Tariff Schedule. The Tribunal had looked into all the relevant judgments cited before it viz. Tarachand Gupta & Bros. as well as Sharp Machines Pvt. Ltd. etc. referred to us before. 17. As regards the Vishal Electronics Pvt. Ltd. case (supra) referred to by the....