TaxTMI 
TaxTMI 
2001 (8) TMI 1086
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....a) Declared end-use of the items imported; (b) The Chartered Engineer's Certificate; (c) The importer's affidavit (d) Technical opinion of the professor of IIT Madras (Dr. N.N Nair, HOD); and (e) Recommendatory letter of Director of Industries, Andhra Pradesh. The CEGAT had observed that these documents opine that the items imported are not complete toys but merely patterns from which toys could be made after R & D leading to emergence of moulds and the Commissioner had not given any grounds for rejecting the evidence. Therefore, the case required remand for recording a detailed finding and issue of speaking order. 2. The Commissioner gave an opportunity of hearing to the importer and considered the importer appellant's following pleas :- (a) They are engaged in the manufacture of children's play equipments and systems and is a small scale unit registered with the Directorate of Industries, Andhra Pradesh. (b) They had imported patterns, moulds and components for setting up a new industrial unit from M/s. Automatic Toys....
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....t up at Hyderabad, Chennai, Bangalore, Coimbatore, Erode and Vijayawada. They further submitted that they continue to be in the business of manufacture of dyes out of moulds prepared from the original imported dyes/prototype which are still available at their factory in a dismantled condition. Hence, they pressed for accepting their assessment and grant of benefit of concession under Heading 98.01. 3. The Commissioner after due consideration rejected their plea by giving a detailed findings as follows :- "I have carefully gone through the records of the case and the submissions made in the appeal. The issue to be decided here is whether the goods imported by the appellant are eligible for classification under Heading 98.01 of the Customs Tariff and the benefit of assessment as Project Imports. The goods imported against the two bills of entry covered by the order of the lower authority are the following items : 1. Mould for Baby Bumper Car - 1 No. 2. Components for Bumper Car : (a) Oval Bumping Rubber tyres and tubes - 13 nos. (b)  ....
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....roject, (3) power project, (4) mining project, (5) project for the exploration for oil or other minerals, and (6) such other projects as the Central Government may, having regard to the economic development of the country notify in the Official Gazette in this behalf; and spare parts, other raw materials (including semi-finished material) or consumable stores not exceeding 10% of the value of the goods specified above provided that such spare parts, raw materials or consumable stores are essential for the maintenance of the plant or project mentioned in 1 to 6 above." The goods under import should, therefore, be conforming to the above description. The goods under import which are in the nature of toys/parts of toys clearly cannot be treated as machinery, instruments, apparatus and appliances, control gear and transmission equipment, or as components or raw materials for the manufacture of the above items. The appellant's contention as seen from the order of the Commissioner (Appeals) dated 17-1-91 is that the goods under import are in the nature of auxiliary equipment. "Auxiliary equipment" has not been defined either in the Tariff or the Project Import Regulations, 1986 and is....
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....or the classification of goods which is to be determined in accordance with the description in Chapter headings and with reference to chapter and section notes. Thus for classification under Customs Tariff Heading 98.01 the goods must conform to the description in the Tariff Heading 98.01 and also be goods which are imported in accordance with the Project Import Regulations, 1986. It would therefore, be highly misleading to aver that Heading 98.01 is an end-use based classification. End-use, no doubt, is one of the criteria i.e. the goods are to be used for the project. But all goods used for the project cannot qualify for classification under Heading 98.01. They must necessarily conform to the description in the Heading (98.01), and the importer must follow the procedure laid down in the Regulations, 1986. Following the directions of the High Court, as required under the Regulations, the importer had, in fact, registered the project in the Custom House prior to the clearance of goods. However, I find no grounds to accede to the plea that the finished toys are patterns and conform to the description in the heading as they qualify as capital Apparatus/equipment for development pu....
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....ere used for the goods categorized as "Capital Goods". The Head of the Department, Department of Fibre Reinforced Plastic, IIT Chennai had clearly certified that the items could be used for producing moulds with the use of glass fibre and resin moulds which were again used to produce required play equipments. He contended that the Chartered Engineer also certified the use of items as Prototype and not for sale in the market and it had no marketability as they were in the nature of prototype. He also contended that the imported items are not complete unit they were not used as play equipments nor they could be sold in the market. They made use of these prototypes to make the moulds and produced the full play equipments by using moulds made by the appellants in their factory which were made with the help of prototypes imported. The Chartered Engineer's certificate clearly shows that parts imported are only prototypes which were used by the appellants to make the moulds. He, therefore, points out that Commissioner (Appeals) order discarding these evidences and also their use as "Capital Goods" for Project Imports was not justified. They cannot be classified under Heading 95.03 which c....
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.... No. 84.66 (Now 98.01) was to promote industrialization and the heading must be construed liberally. 5. Countering the contention of the appellants, ld. DR very forcibly submitted that the contentions of the appellants cannot be accepted as what has been received was in the nature of 'Toys'. Even, if they are not complete ones, by applying the Interpretation Rule (2) (a), then they have to be treated as 'parts of toys' and they have acquired essential characteristics and they are goods in the nature of final products. What is required to be included in Heading 98.01 are items which go to manufacture of the plant or assist in the manufacture of the plant. The plant should produce goods. The very goods which are required for moulds which are nothing but final goods. These cannot be treated as assisting in the manufacture of final product. It is his contention that the Commissioner has given a detailed finding and the same is required to be upheld. On a specific query from the Bench as to how they would distinguish the Larger Bench judgment rendered by the Tribunal in the case of Toyo Engineering India Ltd. [2000 (122) E.L.T. 315]. Ld. DR points out that in the Larger Bench ca....
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....ed speaking order which shall contain reasoned findings on all issues agitated before him. The appeal is allowed by way of remand." It necessitated for the Tribunal to remand the matter to reconsider the above documents with the reason that the order of the ld. Commissioner was a non-speaking order and the ld. Commissioner has not given any reasons as to why the documents and the evidence on record should not be accepted. 8. In the remand proceedings, the ld. Commissioner as extracted from the finding portion of the impugned order has not disputed the facts (i) that the project has been registered with the Customs department on the basis of directions given by the Hon'ble High Court (ii) that the appellants had produced the above documents in the form of certificate issued by the Chartered Engineer, technical opinion of Professor of IIT, Madras; importer's affidavit; recommendory letter of Director of Industries, Andhra Pradesh and about specific import licence obtained from the licencing authorities classifying the goods as "capital goods". 9. In terms of the above findings, and also the directions given by the Tribunal, it was incumbent on the ld. Commissioner ....
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....al auxiliary items for getting moulds to make the finished toys. Only on this premise, she has rejected the plea. We are constrained to observe that the ld. Commissioner in fact has not gone in depth to consider the issue and has not given finding on the various pleas raised by the appellants that these 'patterns' are nothing but "auxiliary equipment" and that they are not in a marketable stage and cannot be sold in the market. From the items, the moulds are manufactured and from the moulds the required equipment is manufactured for the purpose of sale. This issue has not been dealt with but a mere finding has been recorded that "end-use" cannot be the criteria for classification. The only way to establish that the imported items referred to as "patterns" by the importer to constitute as "auxiliary equipment" as per the CETH 98.01 is to examine the evidence placed on record. It is seen that in the subsequent paragraph, the ld. Commissioner herself stated that end-use is one of the criteria for goods to be classified. The ld. Commissioner has blown hot and cold in holding at one place that for the purpose of classification end-use is not the criteria and in the next line, she record....
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....rtificate is true and correct to the best of his knowledge and belief. M/s. Chartered Engineer (India) have also issued a certificate to the said Engineer certifying him as a Chartered Engineer registered in their institute. The Director of Industries, Govt. of Andhra Pradesh has issued a letter to the Collector of Customs, Madras recommending the importer for considering the imported goods at concessional rates of customs duty and items noted in the bill of entry to be treated as "Project Imports". The Bill of Entry also described the item as "Children's Play Equipment, Components, Prototype and Mould as per Proforma". There is no allegation that appellants have mis-used these items and sold it in the market and that they have not prepared moulds and not manufactured final products. The question that remains for consideration is as to whether the items comes within the ambit of the definition of 'auxiliary equipment' or within the term 'capital goods' as defined in 'project imports' and extracted in the main portion of the order. We agree with the appellants' contention that there is no contra opinion obtained by the department either in the form of clarification from the Director....
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....sses necessary for manufacture of fertiliser. Once the fertiliser plant is covered by the industrial plants specified in Heading 98.01 of C.T.A., all the auxiliary equipments which are required for the initial setting up of the unit can be imported under the Project Import Scheme. Auxiliary means giving additional help; supplemental or subsidiary; an item not directly a part of a specific component or system but required for its functional operation (Words and Phrases of Excise and Customs by S.B. Sarkar). According to the World Book Dictionary, 'auxiliary' means, "a person or thing that helps; aid; syn; accessory". We also observe that even the Tribunal in PSEB case, after refering to the definition of the word 'auxiliary' in Concise Oxford Dictionary observed that equipment which is directly used in the setting up of the project would be an auxiliary equipment. The Tribunal, in that case, did not treat the vehicle as an auxiliary equipment as it was to be used for transport of the transformer to the project site and restricted the term to those equipments which have direct use in the setting up of the project. The Larger Bench of the Tribunal in National Aluminium Co's case have ....