AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (1) TMI 1706
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....genize their business of PIMM by undertaking indigenous/local manufacture of such machines out of imported, locally purchased and manufactured components/parts of such machines. In October, 2008, the appellants started the activity of manufacturing of PIMM at Thane. The said factory premises consists of 20,000 sq. ft. area with investment of about Rs. 2 crores. The machines installed in the factory are - (a) Computer numerically controlled metal cutting, metal grinding machines (b) lathes, drilling machines, (c) material handling equipment and cranes, (d) EDM machine for sparking of steels, (e) air compressor, (f) oil cleaning equipment & (g) DG sets. 3. As initially the appellants were importing the complete PIMM from China but by the introduction of Notification No. 39/2010-Cus., dated 23-3-2010 Anti-Dumping Duty (ADD for short) on plastic processing injection moulding machines originating in or exported from China was imposed, therefore, the Re....
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....Plaza Lamps and Tubes Ltd. v. CCE - 2007 (209) E.L.T. 182 (Del.), Permalite Electricals P. Ltd. - 2004 (168) E.L.T. 164, Delta Electronics P. Ltd. v. CC - 2012 (283) E.L.T. 68, CC v. Ratan Melting & Wire Industries - 2008 (231) E.L.T. 22 = 2008 (12) S.T.R. 416 (S.C.), Anchor Daewoo Inds. Ltd. v. CC - 2007 (214) E.L.T. 230, Board's Circular No. 528/53/2007-Cus. (TRU), dated 25-10-2007 and Board's Circular No. 43/2010-Cus., dated 6-12-2010. In alternate, he submitted that even if it is presumed that the machines are imported in CKD/SKD condition, then also the Notification imposing ADD is not applicable to the appellants as the Notifications imposing ADD clearly states that "complete component or parts thereof in SKD condition". In this case, ADD is leviable only on complete machines i.e. plastic processing or injection moulding machines, not part thereof or machines imported in SKD/CKD condition. Therefore, as per the decision in the case of Anchor Daewoo Inds. Ltd. supra, the provisions of the Notifications are not applicable to the facts of this case. He also relied on the decision in the case of CC v. Sony India Ltd. - 2008 (231) E.L.T. 385. Therefore, he prayed that the impugned....
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....sential characteristics of a complete machine. Therefore, the appellants are liable to pay ADD as per Notification No. 39/2010-Cus., dated 23-3-2010. Revenue has also relied on the statement of Shri Devdas Birendra Kumar Roychowdhury, CEO Technology of the appellants and in his statement he has stated that the appellants are importing substantial and essential parts of machines and assembling sub-assemblies in the machines with the help of employed technical know-how and by adding few locally procured/manufactured parts. We find that in his statement he has also stated that they add Taiwanese controller and locally procured barrel heaters, valves, hoses, etc., in assembling the machines. Although, the components/parts imported by the appellants are substantial parts of PIMM but without the indigenously procured parts such as barrel heaters, valves, barrel heaters, hoses, etc., and electrical panels imported from Taiwan and assembling the same altogether, PIMM is not functional. The issue whether Rule 2(a) of the General Rules for Interpretation of the First Schedule of the Customs Tariff Act, 1975, is applicable to the facts of the case is to be examined in view of the various judi....
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....heading in the Schedule as that of a CFL if the incomplete CFL has acquired the essential character of a CFL, the article would be falling under Chapter 85. But this will not be enough to bring it within the sweep of the notification unless the article is a Compact Fluorescent Lamp (with or without choke) as is commonly understood in the related trade or market. The article proposed to be imported by the applicant is evidently not CFL though may be classifiable under Chapter 85 of the First Schedule to the Customs Tariff Act. The notification in question nowhere stipulates that the expression "Compact Fluorescent Lamps falling under Chapter 85" (without or with choke) would include incomplete CFLs falling under Chapter 85 if they have acquired the essential character of the complete CFLs (without or with choke) to attract the imposition of anti-dumping duty. As has been observed by the Hon'ble Supreme Court : "The intention of the legislature in a taxation statute is to be gathered from the language of the provisions particularly where the language is plain and unambiguous. In a taxing Act it is not possible to assume any intention or governing purpose of the statute more than what....
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.... cover incomplete machine which is imported in CKD/SKD condition. It is also noted that whenever the DGAD has felt it is appropriate to impose ADD on the article as well as CKD/SKD parts of the article it has issued relevant notifications which clearly state the applicability of the notification imposing ADD on the article as well as CKD/SKD parts of the article. Examples of such notifications are Notfn. Nos. 55/2009, 139/2002, 132/2009 and 125/2010. In the present case, Notification No. 39/2010, dated 23-3-2010 issued for imposing ADD only on injection moulding machines from 40T to 1000T from China and there is no mention of ADD on SKD/CKD parts of the same, therefore, the notification cannot be held to be applicable to import of incomplete machine or CKD/SKD parts of the same. 11. We further find that in the impugned order the ld. Commissioner relied on the C.B.E. & C. Circular No. 43/2010. The circular has been issued on 6-2-2010 which states that anti-dumping duty is to be levied on any article in CKD/SKD condition either in together or in part shipments. The circular cannot override and prevail over the decisions of the High Court and the Tribunal, as laid down by the ....
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....ere importing complete PIMM and by the issuance of the Notification imposing ADD on the complete PIMM, the appellants have with intent to evade ADD on this PIMM has procured substantial parts from China and they have only assembled in their factory. In this case, we find that the appellants have set up a factory and in that factory they have installed certain machineries for assembling, cutting and manufacturing certain parts from indigenously procured inputs and certain parts which the appellants are importing from Taiwan and some essential parts they import from China for assembling a complete PIMM. We also note that the appellants are registered with the Central Excise Department and all the assembled machines are being cleared by them on payment of Central Excise duty. In these circumstances, we have no hesitation to hold that the appellants are not having any intention to evade payment of ADD. Therefore, we hold that as the appellants have imported substantial parts of PIMM and certain parts imported from Taiwan and certain parts procured indigenously and all the parts were assembled in their factory to manufacture a complete PIMM, the provisions of Rule 2(a) ibid are not appl....
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....ines/consignments as recorded, in Table IV of the show cause notice and in the order-in-original are reproduced hereunder : Sr. No. B/E No. & Date Invoice No./Date Declared Description/Qty. Goods found on examination Date of examination Date of seizure Assess-able value as per B/E Seizure value i ii iii iv v vi vii viii ix 1 907417 20-10-2010 TE-IN 100916P9 22-9-2010 Machine Parts : Injection casting weldments - 1 set Injection Units/8 sets. Each set bearing markings as - (i) TRX650, 9046 (ii) TRX650, 9086 (iii) TRX650, 9087 (iv) TRX230V, 5A329 (v) TRX230V, 5A328 (iv) 2-11-2010 12-11-2010 2141604 27300000 2 907514 20-10-2010 TE-IN 100916P8 22-9-2010 Machine Parts : Door Panel, covers, screw barrel & accessories - 1 set TRX230V, 5A320 (vii) TRX188V, 3A477 (viii) TRX188V, 3A476 Clamping units/8 sets. Each set bearing markings as above. 3 sets of base Units 921120 3 920735 27-10-2010 TE-IN 100916P3 22-9-2010 Machine Parts : Drilled & Welded steel plate for machine frame - 1 set (de....
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....bsp; 10 906621 19-10-2010 HTCHEN 1009100-1 29-9-2010 Machine Parts : Welded Steel Plate for Machine Frame - 2PAC 4 Nos. of Base units of PMM (Sr. Nos. found on three machines X02500100107, X02500100108, X02500100109) mounted 11-11-2010 2-12-2010 759924 9200000 11 940114 9-11-2010 HTCHEN 1009100-3 29-9-2010 Machine Parts : Injection Casting Weldments - 4 Nos. Machine Parts : with heat exchanger, oil/fuel tank, electric appliance safety device, control panel with switches (ready to fix connectors, circuit breakers, fans, cables, adaptors), Centralised Lubrication set (ltr capacity flow 0.25 ltr min), Solenoid Valves, 759924 Screw Barrel - 4 Nos. Machine Parts : Door Panel and Cylinder, 4 Sets Air Filters, Hydraulic Flow blocks - REXROTH, Hydraulic Transmission Control Valves - CRG-03-05-20 Mfg. No. JE 060 50 013 HRS 12 965128 22-11-2010 HTCHEN 1009100-2 29-9-2010 Machine Parts : Bed Platen, Clamp Cylinder, RAM - 4 PAC 4 Nos. of Injection units - RE....
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....ssories tool kits along with the machine is an indication of import of PIMM in SKD condition. Admittedly these sub-assemblies were found to be complex machines and the same were packed in a manner to avoid any scratch or damage, and the appellants representatives identified the tool kits with correct terminology/description mentioned in column v. On perusal of column iv of the above table, the description of various items declared in the Bills of Entry did not correspond to the goods found on physical examination, which goes to show that the appellant did not give the correct and complete description in the Bills of Entry. Further the contention of the appellant is that the electrical and hydraulic units which were the essential parts of the PIMM were not imported. However, on perusal of column v of the above table, it can be seen that the base units with inbuilt hydraulic oil tanks and fitted with electronic heat exchangers, hydraulic parts, electronic cables/wires and other items such as doors panels, covers, screw barrels, glass panes were found on physical examination. Further it can also be seen that injection units and clamping units (declared as injection, weldments/clamping....
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....f goods. 16.1.3 Mrs. Sudha R. Chavan, Import-Export Officer of the appellants in her statement recorded under Section 108 of the Customs Act, 1962 on 22-10-2010 admitted that the appellants were importing complete PIMMs and parts prior to imposition of anti-dumping duty in May, 2009. The appellants started invoicing and importing PIMM in disassembled condition only after imposition of anti-dumping duty in May, 2009. Shri Anit Asthana used to negotiate the import of goods, Shri Gopal Agarwal was placing purchase orders with the overseas supplier and Customs House Agent M/s. N.D. Shipping Agency was attending to the clearance of imported goods from Nhava Sheva port. She also admitted that Shri Gopal Agarwal was sending her copies of confirmed purchase order by e-mail and she was receiving copies of original invoices, packing lists, bills of lading, etc., from the supplier through e-mail prior to shipment of goods and she was amending the original invoices, packing lists, bills of lading, etc., as per the directions of Shri Anit Asthana appellant No. 2 and these amended portions were shown in red colour (so as to make it noticeable to supplier). The amendments in invoice, pack....
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....; Subject : E mailing 230x1, 188tx1, 650tx1baseP1.doc, 230x1, 188tx1,......etc. From : Mrs. Sudha To : Tederic with a copy to Anit Asthana The email read as - "pls find attached herewith amended draft bill of lading for ur reference. Pls chk and confirm to us the bill of lading for the same. Base's 3 containers vessel sailing on 25-9-2010." (C) The third e-mail dated 23-9-2010; Subject : Fw E mailing 230x1, 188tx1, 650tx1baseP1.doc, 230x1, 188tx1...etc. From : Mrs. Sudha To : Tederic The mail reads as - "pls find amendments and remarks in red color." 17.2 This e-mail establishes the receipt of original import documents from the supplier and re-sending of those documents to the supplier after due amendments as mentioned in her statements. Further the said em....
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.... them. Further Shri Roychoudhary, CEO (Technical) of the appellants admitted in his statement that the base unit, hydraulic and electric components and tools, accessories were also imported by the appellants from China and only a few locally procured parts were used in the manufacture/assembly of PIMM at their factory. 19. So far as the aspect of valuation is concerned, I find that the appellant No. 2 has admitted in his statement that value in case of 4 consignments at the load port was USD 117000 whereas they have declared the value at USD 92000. This is coupled with the fact that they were paying charges for disassembling the machines before exporting to India. 20. I find that the persons whose statements recorded have not retracted or disowned the statements given under Sec. 108 of the Customs Act, 1962. The evidences on physical examination, documentary evidences and statements recorded under Section 108 of CA, 62 reveal that the machines were imported in SKD condition. Further I find that the appellants were also aware that ADD had been introduced on PIMM, thereby they manipulated the invoices, packing lists and other documents, thus, they created a device/sub....
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....bsp; In the facts and circumstances of the case whether the Member (Technical) is correct holding that the appellants have imported PIMM in SKD condition or Member (Judicial) is correct holding that the appellants have imported substantial parts of PIMM but without indigenously procured parts and electrical panels imported from Taiwan, the PIMM is neither complete nor functional? (b) Whether the provisions of Rule 2(a) of the General Rules for Interpretation of the First Schedule of the [Customs] Tariff Act, 1975 is applicable to the facts of this for invoking the Notification No. 39/2010-Cus., dated 23-3-2010 for levying anti-dumping duty? (c) Whether the C.B.E. & C. Circular No. 43/2010-Cus., dated 6-12-2010 is applicable to the imports made by the appellants prior to 6-12-2010 or not? (d) Whether the decision of this Tribunal in the cases of Philips India Ltd. (supra), Plaza Lamps and Tubes Ltd. (supra), Permalite Electricals Pvt. Ltd. (supra), Delta Electronics P. Ltd. (supra), Anchor Daewoo Inds Ltd. (supra) and Sony India Ltd. (supra) are applicable to the facts of this case as ....
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....hanical base. As regards the sales contract recovered, this also not relevant, since the physical examination of the goods which actually arrived did not reveal import of essential sub-assemblies, such as, electrical unit and controller unit. 22.6 The facts of the present case do not fall within the mischief of Rule 2(a) of the General Rules of Interpretation of the Schedule to the Customs Tariff. Reliance is placed on the decision of the Hon'ble Apex Court in the case of Sony India Ltd. (supra) wherein it was held that Rule 2(a) would be applicable only and only if all the consignments which are intended to make a final product have been presented at the same time for customs clearance. In any event Rule 2(a) of Interpretative Rules cannot apply to anti-dumping notification and reliance is placed on the decision of this Tribunal in the cases of Phoenix International Ltd., Philips India Ltd., Plaza Lamps and Tubes Ltd., Delta Electronics and Anchor Daewoo Industries Ltd. (cited supra). It is also contended that wherever anti-dumping duty is sought to be levied on goods in CKD or SKD condition, the concerned notification has provided for the same expressly. It is further arg....
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....lamping unit, which uses the mould with force. Accordingly, it is urged that the impugned order proposing to impose anti-dumping duty on the goods imported by the appellant is sustainable in law and has to be upheld accordingly. 24. I have carefully considered the submissions made by both the sides. 24.1 Section 9A of the Customs Tariff Act, 1975 relating to anti-dumping duty (ADD in short) on dumped articles reads as follows : "Where any article is exported by an exporter or producer from any country or territory (hereinafter in this section referred to as the exporting country or territory) to India at less than its normal value, then, upon the importation of such article into India, the Central Government may, by notification in the Official Gazette, impose an anti-dumping duty not exceeding the margin of dumping in relation to such article." 24.2 In the case before me the relevant notification imposing ADD is Notification No. 39/2010-Cus., dated 23-3-2010. As per the said notification, the designated authority, the Directorate General of anti-dumping, vide Notification No. 14/12/2008-DGAD, dated 10-2-2009 published its preliminary findings in th....
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....he corresponding Tariff Item specified in the ADD notification. In other words, the goods have to be classified under the Customs Tariff first before levying ADD. The General Rules of Interpretation of the Schedule of the Import Tariff says "classification of goods in this Schedule shall be governed by the following principles". In the present case, Rule 2(a) is relevant and the said Rule reads as follows : "Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), presented un-assembled or disassembled". 24.4 From the above Rule, it is evident that for the purpose of classification an incomplete or unfinished article, if, as presented, it has the essential character of a complete or finished article, it would be covered by the heading pertaining to the complete or finished article. The second part of the Rule makes ....
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....ential character of the complete machine. It is further on record that Shri Ankit Asthana had admitted to paying extra charges to the extent of 3 to 5% (approx.) for the purposes of dismantling the PIMM into PIMM sub-assemblies. The examination of the seized goods conducted in the presence of Shri Sandeep Waman Naik and Shri Devdas Birendra Kumar Roychoudhury also confirmed that the goods imported in the twelve containers revealed that 12 sets of injection units, 12 sets of clamping units and matching number of other units like hydraulic system, base units, electronic parts, etc., which formed essential and substantial character of 12 PIMMs of specific Chinese models had been imported. In view of the above factual position, which is not in dispute, the contention of the appellant that the goods under importation as presented is not liable to anti-dumping duty is not acceptable and has to be rejected outright. Even if the imported were incomplete or unfinished, so long as they had the essential character of the complete machine, anti-dumping duty would be leviable on the said goods, in terms of the notification issued under Section 9A. 24.6 As regards the argument that Rule ....
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....iable. That is not the case before us. In the present case, the goods have been imported in one consignment itself and as presented before the Customs, the goods had the essential character of the complete or finished article. Similarly, in the Philips India Ltd. case, the ADD levy was in respect of Compact Florescent Lamps (CFL) with or without choke falling under Chapter 85 of the Customs Tariff. This Tribunal in that case noted that the levy was on CFL with all electronic components. Inasmuch as the goods imported were not complete CFL with all electronic components, it was held that the notification levying anti-dumping duty would not apply. Further the notification imposing ADD on CFL referred to the Chapter under which the product fell and not to the heading or sub-heading. As per the Interpretative Rules - Rule 1, the titles of sections, chapters and sub-chapters are provided for ease of reference only. For legal purposes, classification shall be ascertained according to the terms of the headings and any relative section or chapter notes. Therefore, once the heading or sub-heading of an article is specified for levy of ADD, the full scope of the entry has to be considered fo....
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....e neither to be read as Euclid's theorems nor as provisions of the statute and that too taken out of their context. These observations must be read in the context in which they appear to have been stated. Judgment of Courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgment. They interpret words of statutes; their words are not to be interpreted as statutes". The same view was expressed by the Hon'ble Supreme Court in the case of Alnoori Tobacco Products - 2004 (170) E.L.T. 135 (S.C.) where it observed that, - "13. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper. 14. The following words of Lord Denning in the matter of applying precedents have become locus classicus : "Each case depends on its own facts and a close similarity between one case and another is not enough ....
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....ubterfuge was, therefore, created to show that two independent companies had imported separate parts of the footwear in order to bypass para 156(A) of the EXIM Policy 1992-97. Under the said paragraph, importation of synthetic shoes in SKD condition could only be made against specific import licence. M/s. PIL was aware of the restrictions. It was the only real importer of all the four items. M/s. PIL had funded M/s. PIND with interest free loans running into Rs. 18 crores (approximately). M/s. PIND was the factory of M/s. PIL (See the DEEC certificate). When there is an allegation of subterfuge, the Court has to examine the circumstances surrounding the import to ascertain whether the importer had entered into fictitious arrangement to evade customs duty. The intention behind the act of importation has to be probed. In this case, the most clinching circumstance is that there is manufacture of the finished products, namely, "synthetic shoe" for domestic and export markets. M/s. PIL manufactured export quality synthetic shoes on their own account whereas those sold in the domestic market by M/s. PIND was also manufactured by M/s. PIL for M/s. PIND. Further, in his statement, B. Nagpa....
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....shoes sold in the export market and they also manufactured synthetic shoes which were sold in the domestic market. The shoe uppers constituted an important part of the footwear. That part was imported under the advance licence by M/s. PIL. The same company got the outer soles, insoles and sock liners in the name of M/s. PIND. It is M/s. PIL which ultimately manufactured synthetic shoes. Therefore, the entire manufacturing activity was carried out by M/s. PIL. Therefore, it is clear that the above device of importation of one item by M/s. PIL and three items by M/s. PIND was a subterfuge/fictitious arrangement intended to deceive the Department and fraud on para 156(A) of the EXIM Policy 1992-97. The above circumstances have not at all been considered by the Tribunal. In cases of the present nature, the Tribunal should look at the entire composite picture in order to ascertain the real intention behind the arrangement on which the importer relies. Lastly, the shoe uppers were imported by M/s. PIL whereas soles, insoles and sock liners were imported by M/s. PIND and given to M/s. PIL who along with 28 other items (peripherals), procured domestically, manufactured the finished product....
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.... 2007 (220) E.L.T. 56 (Kar.)]. In the present case, the appellant having resorted to subterfuge by dismantling/disassembling the goods (PIMM) by the supplier before export cannot be allowed to take advantage of such subterfuge for evading/avoiding anti-dumping duty leviable on such goods. 24.12 From the evidence available on record as detailed in the findings of the Hon'ble Member (Technical) in Paras 17.1, 17.2 and 18, it becomes clear that the goods under importation are PIMM falling under Heading No. 8477 10 00 and I concur with his findings in this regard. 25. In the light of the above analysis, I answer the reference made to me as follows : (1) In the facts and circumstances of the case, the appellant has imported PIMM in SKD condition; (2) The provisions of Rule 2(a) of the General Rules of Interpretation is applicable for determination of the classification of the goods under importation for levy of anti-dumping duty under Notification No. 39/2010-Cus., dated 23-3-2010 as the scheme for levy of ADD does not envisage separate principles of classification for levy of various types of customs duti....