TaxTMI 
TaxTMI 
2000 (9) TMI 879
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....as directed to deposit an amount of Rs. 20 crores towards duty within eight weeks from the date of receipt of the said order as a condition precedent for hearing the appeal filed by the petitioner before the CEGAT against the order dated 30th January, 1999 passed by the Commissioner of Customs, ICD, New Delhi imposing a duty in the sum of Rs. 42,89,75,196/- and a penalty of Rs. 30,19,92,183/- on the petitioner. 2. Briefly, the facts are that the petitioners are engaged in the manufacturer of colour television (CTV) sets under the 'SONY' brand name in their factory at Dharuhera in the State of Haryana. According to the petitioners, at the relevant time they imported various components for the manufacture of colour TVs. On arrival of ....
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....20 crores as a condition precedent for hearing the appeal. 4. In the impugned order the Tribunal has noted the various issues involved in the case. The Tribunal has observed in the impugned order that the issues are complex and are to be decided only after detailed hearing. The issues noted by the Tribunal are : (a) Interpretation of Rule 2A of the Interpretative Rules. (b) Binding nature of the HSN Explanatory Notes and the effect of amendment in the Notes. (c) The nature of the circulars issued by the Central Board of Excise and Customs. (d) Whether the show cause notice is hit by time limit. This is with reference to ....
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.... have been said that the components constituted a particular number of colour television sets so as to assess them as CTVs as proposed by the respondent. According to the learned Counsel for the petitioners the import of components depended upon minimum limits fixed by the manufacturer of the concerned component because the component was manufactured specifically for the petitioners and the manufacturer would insist that unless a particular number of components were purchased, he would not supply. The minimum limit would vary from manufacturer to manufacturer. 7. It is interesting to note that the Tribunal has practically not given any reason for requiring the petitioners to make a pre-deposit of Rs. 20 crores. The relevant portion ....
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....otice alleges that the imports of the components are colour television sets in CKD or SKD conditions. It is clear from the facts of the case that this was not a case of imports in SKD or CKD conditions which always presupposes that the goods were first assembled and then disassembled fully or partially for more convenient transport of goods." Further, the Commissioner has observed that this import was also not in "ready to assemble sets". This observation of the Commissioner shows that the case set up by the department has been rejected. In view of this finding of the Commissioner, it will, prima facie, be difficult to accept that the components were complete CTVs. It may be noted here that the Commissioner gave his own different reason to ....
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....ing may be difficult. 11. The petitioners have raised an important legal issue about the force and binding nature of the Circular No. 44/97-Cus., dated 30th September, 1997. The said circular notes that the processes involved in the factory where TV sets manufactured were elaborate and required highly skilled as well as semi-skilled work force and technical know-how of high degree to complete the finished article from the components/parts. It was argued by the learned Counsel for the petitioners that when the process of manufacture was such it could not be said that the components constitute colour TV sets even by pressing in said Rule 2(a) of the Interpretative Rules. Rule 2(a) refers to simple proceedings in assembly of final prod....
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.... is no other provision under the Customs Act under which such circulars could be issued. It would follow that the circular has to be read as having been issued under Section 151A and would, therefore, be binding on the assessing authority. If the circular applies the petitioners are likely to succeed. 13. Another important point for consideration at this stage is that the show cause notice can be held to be within time only if it is held that there was suppression of material facts amounting to fraud on the part of the petitioners. Otherwise the show cause notice itself will have to be held to be beyond time and, therefore, it will have to be quashed. In this behalf the learned Counsel for the petitioners argued that bill of entries....