TaxTMI 
TaxTMI 
2018 (9) TMI 1151
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Assembly" and the "Transmission Sub-assembly/Gear Box" were in a pre-assembled form, the appellant was not eligible to avail the concessional rates provided in the said Notifications. 2. Accordingly, a Show Cause Notice dt. 26.08.2013 was issued to the appellants inter alia demanding differential customs duty in respect of CKD kits for motor cars imported during the period 24.03.2011 to 11.04.2013 and imports of motor cars in a form other than CKD for the period 01.03.2011 to 23.03.2011. The Show Cause Notice inter alia proposed demand of differential duty amounting to Rs. 757,61,37,381/- with interest thereon and imposition of penalties under Sections 112(a) and 114A of the Customs Act, 1962. 3. In adjudication, the adjudicating authority vide the impugned Order dt. 13.02.2015, inter alia concluded as follows : (a) The subject 'engine assembly' and 'transmission assembly' in its imported form constitutes a complete and functional pre-assembled engine. (b) The term 'sub-assembly' used in the phrase 'transmission sub-assembly' is a misnomer by the importer (appellant) to suppress the fact that the imported item actually constitutes a complete automatic trans....
X X X X Extracts X X X X
X X X X Extracts X X X X
....I to the Application. Vide Order dated 28.10.2005, In Re: Bayerische Motoren Werke Aktiengesellschaft, 2006 (193) ELT 138 (AAR), the question framed for consideration was as follows : "Whether the import of car parts, listed at Annexure III would be considered as import of completely knocked down ("CKD") unit, eligible to the concessional rate of customs duty of 15% being covered by Entry 344 of CTH No.8703 (1) of Notification No.21/2002-Cus., dated March 1,2002 as amended by Notification No.11/2005-Cus., dated 1.3.2005?" After considering the Report provided by the ARAI on the referred issues, the Authority for Advance Rulings ("AAR") was pleased to hold as follows : 44. [ ] From the perusal of these reports, the position that emerges is that parts listed in Annexure-III to the application represent the CKD Unit and with the assembly of seats, which will be procured locally, the parts would constitute a complete car. There are some parts, which could be taken as component form while there are other parts which could be termed as SKD form. It is true that there are no definitions of the terms "CKD" and "SKD" in the Customs Act or Rules framed the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... appellant addressed letter dt.5.7.2010 seeking confirmation that the benefit of the lower rate of BCD would be equally applicable to the X1 and X3 Series. The Department responded vide letter dt. 23.7.2010 confirming that the benefit of the Customs Exemption Notification can be extended to the X1 and X3 Series, subject to first check examination. vii) Thereafter, Harley-Davidson Motor Company, made an application before the AAR seeking to claim CKD benefits even if the engine and gearbox were mated / inter-connected in a single unit, in a motor cycle (here, it must be noted that the language of the exemption entries and the amendments thereto have always been identical for motor cars and motor cycles). The AAR vide its Ruling [In Re: H-D Motor Company India Pvt. Ltd., 2011 (270) ELT 432 (AAR)] ("H-D AAR") ruled that the CKD benefits are available even to an engine and gearbox which were mated / inter-connected together in a motor cycle. The Government raised serious objection to H-D's position qua a mated engine-transmission being eligible for the CKD rate. The objections of the Government were overruled by the AAR and the benefit of the CKD was extended even to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e to import all critical components including a pre-assembled engine, gearbox, transmission mechanism as a CKD so long as these are not installed on the chassis or body assembly. 3. If only the three critical components namely engine, gearbox and transmission mechanism are imported as standalone subassemblies and not interconnected to each other, the same should qualify for clearance as parts. xii) The CBEC clarified as follows vide Instruction F.No.354/38/2011-TUR, dated 11.3.2011 : 4. In view of the above, it is to inform you that while point nos.1 and 3 of the interpretation of the new definition, as mentioned in your letter dated 4th March, 2011 are correct, the interpretation at point no.2 is not correct. xiii) In view of the above, it was categorically stated that the understanding set out at point no.3 was accurate, viz. that standalone sub-assemblies would qualify for clearance as parts (i.e. under the main clause of the CKD definition - "components, parts or sub-assemblies for assembling a complete vehicle"). It is further submitted that point no.3 could not conceivably refer to non-CKD imports, as such imports were separately dealt with....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Supreme Court in the case of State of Madras Vs K.M. Rajagopalan - AIR 1955 SC 817. (iii) Taking resort to the 'mischief rule of interpretation' it is clear that the purpose of the two March, 2011 amendments are only to overcome the position in law set out in the AAR Ruling in the Harley Davidson case, the amendments notifications should, therefore, be read and interpreted in light of the same. Therefore, the finding in the impugned order, that the argument that the said amendment dated 24.03.2011 was also to overcome the effect of the Advance Ruling in the case of M/s.H-D Motor Co. Pvt. Ltd. is without any iota of documentary evidence, is without any sustainable basis in fact or in law and is contrary to well settled principles of statutory interpretation. (iv) The term 'and' has been specifically inserted in the Exemption Notification as a 'conjunctive' and full effect should be given to the same whilst the 1st March, 2011 amendment used the expression "(a) a kit containing a pre-assembled engine or gearbox or transmission mechanism" the 24th March, 2011 amendment specifically uses the words "engine, gearbox and transmission mechanism not in a preassembled con....
X X X X Extracts X X X X
X X X X Extracts X X X X
....) and clause (b) as where the imports of engine, gearbox and transmission assembly when taken together are not in preassembled condition the applicable duty rate would be 10% (basic customs duty) under clause (a) and when in pre-assembled condition would attract 30%, and, therefore this is the correct interpretation to be adopted. (viii) Therefore, in terms of the well settled rules of statutory interpretation, the proper and correct construction of Exemption Notifications is that : a. Imports of engine sub-assembly or transmission sub-assembly which are not mated / assembled together will qualify as CKD imports entitled for the concessional rate of BCD at 10%. b. Imports of engine and transmission assembly mated / assembled together as a single assembly, but which is not mounted on a chassis or a body assembly, will qualify as CKD imports but be subject to a higher rate of BCD at 30%. c. Imports of mated engine and transmission assembly which is mounted on a chassis or a body assembly or a CBU will be taxed at the highest rate of BCD at 60%. (ix) Imports made by the appellant are not of engine or transmission in pre-assembled form for i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt on the report of Shri Ramesh Babu. The expert has issued the report remised on incomplete facts and without fully understanding or analysing the assembly operations undertaken by the appellant without even visiting the Chennai plant of the appellant and without physically observing the assembly operations undertaken at the said plant on the imported 'engine' and 'transmission' sub assemblies. Dr. N. Ramesh Babu, has not been offered for cross examination despite many requests by the appellant. It is well settled law that when cross examination of the expert is not afforded, then no reliance can be placed on such expert report. (xiii) Submissions on Extended period of limitation (a) Invocation of the "extended period of limitation" in the OIO is erroneous and unsustainable inasmuch as there is no wilful or deliberate non disclosure of correct information by the appellant. The appellant has always kept the Department in the know-how of the legal position followed by them. The Department has also during the relevant period physically inspected various consignments of imports declared to be in CKD form and approved of the availment of the Exemption Notification by ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ty under section 114A of the Act on goods which have already been cleared. In terms of Section 114A of the Act, penalty is attracted only when short levy is caused by reason of collusion or wilful misstatement or suppression of facts and that in the present case, none of these circumstances exist as has already been set out herein above. It is submitted that the appellant has not violated any provision of the Act or the Rules there under as alleged or at all to warrant the levy of penalty. (b) Furthermore, as the issue involved is only one of interpretation of the provisions of the exemption notification, it is well settled law that no penalty can be imposed in such a case. (c) As the duty demand on the appellant is itself not sustainable in light of the submissions set out hereinabove, there can be no question of payment of any interest by the appellant under section 28AB of the Act. (d) It is well settled law that provisions relating to confiscation will only stand when misdeclaration is proved and if there is no case of misdeclaration, confiscation cannot be made. (e) It is well settled law that penalty can be levied in terms of Section 112 (a) of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pretation since both gearbox and transmission mechanism cannot be mated with an engine. (v) As may be seem from the letter dt. 18.02.2011, SIAM's suggestion for incorporating a certain definition of 'CKD kit' was not accepted as it was not in line with Government's policy. This is evident from TRU letter dated 11.03.2011 - Para 3, reiterated by the Circular dt. 24.03.2011. The AAR decision in Harley Davidson case was rendered on 24.07.2010 and SIAM was requested to give their suggestion on 06.12.2010. Thus, changes made w.e.f. 01.03.2011 was not on account of rejection of application for review filed by department in HD case. (vi) If appellant's interpretation of notification is to be adopted it would mean that mere fastening by four bolts to hold together the pre-assembled engine and pre-assembled gearbox or pre-assembled transmission should result in 20% rate difference. (vii) The ordinary meaning of the expression 'not pre-assembled' means 'not already assembled' if adopted would clearly show that the goods imported would qualify to be regarded as a preassembled engine or transmission. (viii) Ld. Special Counsel relied upon the ratio of the ca....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... argument that the imported goods are not operational is not relevant to the present case. The expression used in the Notification merely refers to the physical condition of the goods in question. Nowhere there is any mention of the operational aspect in the subject Notifications. (xii) The expression 'complete and functional' was used in the SCN and O-I-O since the engine and transmission under import were complete and no parts integral to the engine and transmission were absent. They were functional on account of the same. The operational aspect was never alluded to in the SCN or O-I-O. (xiii) On a scrutiny of the copy of Annexure III submitted to the AR Authority by the importer, it was observed that among the parts listed therein were parts of description 'ASSY ENGINE N46 E90 B20 OL LHD A' (under heading : Engine, Compressor and Generator) and 'LU AUTO TRANSM 6HP 19 CODE MB N46 OL'(under heading : Gearbox/Transmission Wiring Harness). The importer has declared the disputed engine part of the CKD kit as engine assembly and not as a sub-assembly of an engine. Further, under the heading 'Engine, Compressor and Generator' appearing in the annexure parts of descrip....
X X X X Extracts X X X X
X X X X Extracts X X X X
....% BCD and the introduction of amendment vide Notification No. 21/2011-Cus. dt. 24.03.2011, BMW did not seek any further clarification either from SIAM or from CBEC or from Chennai Customs as admitted by Ms. PayalTuli in her voluntary statement given on 06.05.2013. On the other hand, they started projecting their imported engines and gearboxes as being in the form of sub-assemblies. (b) BMW have not been able to demonstrate or describe as to how the imported part declared by them as "transmission sub-assembly" in the "Detailed Packing List" is different from a "gearbox" and they have also not been able to describe or demonstrate as to how the said transmission sub-assembly would constitute a sub-assembly of the gearbox. (c) Hence, the submission made by BMW India in their letter dt. 30.03.2011 that they imported their engines and gearboxes in sub-assembly form appears to be a clear misdeclaration aimed at misleading the Customs Authority. (d) BMW have also never declared in any of their Bills of Entry or import documents, the description/nomenclature/the level of assembly or disassembly of the imported parts, viz., engines and gearboxes and establishes sup....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lly correct and cannot be faulted. (b) The adjudicating authority has also correctly held that the experts nowhere address the technical literature uploaded by BMW and manufacturers of transmission mechanism, the assembly process, constituent parts and the testing of the subject goods carried out prior to export, based on which the manufacturers themselves are describing and marketing the products as fully assembled 'automatic transmission' and 'engine'. (xix) Point raised in appeal : No reliance can be placed on the report of Dr. Ramesh Babu. (a) With regard to the contention of appellant that reliance cannot be placed on the report of Dr. Ramesh Babu, the said expert had inspected the representative samples of imported goods declared by BMW as "ASSY Engine"/"ZB Engine" and "Transmission sub-assembly"/"ASSY Auto Gearbox" and was of the opinion that the above representative samples of engines were "pre-assembled engines which could be readily integrated to build the motor car" and that the samples described as "transmission sub-assembly" and "ASSY Auto Gearbox" respectively were "automatic transmission units, which were otherwise known as automatic gearbo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... ? 11.1 The concessional rate of duty for motor cars and motor vehicles imported as Completely Knocked Down (CKD) unit came into being w.e.f. 1.3.2003 vide Notification No.26/2003-Cus. by which such imports benefited from a lower Basic Customs Duty of 25%. This concessional rate was further reduced to 20% vide Notification No.18/2004-Cus. dt. 12.1.2004 and to 15% vide Notification No.11/2005-Cus. dt. 1.3.2005, however none of these notifications provided any Explanation or definition of what constituted a CKD unit. 11.2 It is in this scenario that the appellants approached the Advance Ruling Authority. The question that was raised by the appellant for Advance Ruling was as under : "Whether the import of car parts, listed at Annexure III, would be considered as import of completely knocked down ('CKD") unit, eligible to the concessional rate of customs duty of 15% being covered by Entry 344 of CTH No. 8703 (1) of Notification No. 21/2002-Cus., dated March 1, 2002 as amended by Notification No. 11/2005-Cus., dated 1-3-2005?" 11.3 In their Ruling dt. 28.10.2005, as reported in 2006 (193) ELT 138 (AAR), the majority ruling of the Three-Member Authority ruled that the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....completely knocked down (CKD) unit. What they say is that some parts of the car are in SKD form, thereby meaning, they can be further knocked down into components. This, in our view, may not be a relevant factor because it is clear from the report that Annexure-III represents completely knocked down unit of motor cars. If that be so, the contention of the Commissioner that Sl. No. 344 (2) prescribing 60% duty would apply, cannot be accepted; the applicable rate of duty would be 15%. We hasten to make it clear that the motor cars if imported in any form other than completely knocked down (CKD) unit, the rate of duty applicable would be 60%." 11.4 It is interesting to note that in the said AAR Ruling, the Authority have found that "there are some parts in the total list which could be taken as component form while there are other parts which could be termed as SKD form". The Authority has also noted the usage of words "by and large" in the report of the Automotive Research Association of India, Pune (ARAI) and noted that "inasmuch as without seats the vehicle could not be treated as complete, the words "by and large" have been used. 11.5 However, in the said AAR Ruling....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the form of components, parts and sub assemblies proposed to be imported by the applicant would constitute import of motorcycle in CKD form and as such" would be eligible for concessional ratio of BCD as provided in Notification No.21/2002-Cus. as amended. The Authority, vide a ruling dt. 27.7.2010, reported in 2011 (270) ELT 432 (A.A.R), held that if the engine and transmission assemblies are designed to be housed in a single housing, and are so assembled, the engine and transmission assembly is generally referred to as "Engine Assembly" only and merits to be treated as a component for the purposes of CKD units. The authority noted that in the list of components and parts and sub-assemblies in Annexure III of the application filed by BMW related to the earlier ruling, the engine assembly and the transmission assembly have been indicated as two separate assemblies. The authority ruled that motor cycles imported by H-D will be eligible for concessional rate of import duty if they are imported in the form of identifiable basic sub-assemblies or components as per the illustrative list of components, parts and sub assemblies. The authority also ruled that benefit of exemption woul....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r a semi-finished vehicle, but does not include any of the following : (i) Inter-connected sub-assemblies of two or more of the following : (i)Engine, (ii) Gear Box, (iii) Transmission shaft, (iv) Axles, (v) Suspensions, (vi) Steering system, (vii) Glasses, (viii) Seats, (ix) Instrument cluster, (x) Wiring Harness (ii) A chassis/Body assembly of a vehicle on which any of the above components or sub-assemblies is installed." The definition of CKD, as finally approved by the law makers, inserted by Notification 21/2011 dt. 01.03.2011 in respect of motor cars and motor vehicles, read as under : "Explanation. - For the purposes of this exemption, "Completely Knocked Down" unit means a unit having all the necessary components, parts or subassemblies for assembling a complete vehicle but does not include, - (a) A kit containing a pre-assembled engine or gearbox or transmission mechanism; or (b) A chassis or body assembly of a vehicle on which any of the component or sub-assembly viz., engine or gearbox or transmission mechanism is installed;" Evidently, the actual definition of CKD as brought about vide Notification 21/2011 dt. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Knocked Down (CKD) kit containing all the necessary components, parts or subassemblies, for assembling a complete vehicle, with, - (a) Engine, gearbox and transmission mechanism not in a pre-assembled condition; (b) Engine or gear box or transmission mechanism in pre-assembled form but not mounted on a chassis or a body assembly (2) In any other form 10% 30% 60% The clarifications in respect of these changes made in the definition of CKD were conveyed by the TRU, CBEC, vide letter dt. 25th March, 2011 as under : "9. As you are aware, a definition of Completely Knocked Down Unit had been prescribed in the Budget. However, considering the representations by the industry, the custom duty rate on vehicles imported in the form of completely knocked down kits having all the necessary components, parts and sub-assembly including the pre-assembled engine, gearbox and transmission mechanism of Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 87.02) including motor cycles is being reduced from 60% to30%. Such imports of vehicles in completely built form or in any other form including in a form where any of the t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ub entry 344 (1) (b) are only "engine" or "gearbox" or "transmission mechanism". From a plain reading of this sub entry, it is also clear that it will not cover engine mated to a gear box or transmission. Hence if the goods as imported for an engine mated to a gearbox or transmission, they will go out of the scope of entry 344 (1) (b) and will necessarily fall within the residual entry namely 344 (2) "in any other form" and suffer BCD @ 60%. Hence, in our view, therefore not only will entry 344 (1) (b) not include automobile kit imported with engine or gearbox or transmission in preassembled form and mounted on a chassis / body assembly but also will not include such sub-assembly engine and / or gearbox and / or transmission mechanism if they are imported mated to each other. 19. It is also pertinent to note that if the imported automobile CKD kit has the engine or gearbox or transmission in preassembled condition, the entire kit will not get the benefit 10% BCD under entry 344 (1) (a) but will have to suffer 30% BCD under entry 344 (1) (b). 20. The Ld. Advocate has been at pains to emphasise that various representations were made by SIAM, Volkswagen, etc., to the Ministry af....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ue more than US $ 40,000 or with engine capacity more than 3000 cc for petrol-run vehicles and 10% 30% [100%] more than 2500 cc for dieselrun vehicles, or with both] (b) other than (a) above 60% It is thus seen that definition of CKD kit has continued to remain unchanged except that for the words "engine or gearbox or transmission mechanism not in a preassembled condition" meriting rate of 10% BCD, the Notification 12/2012 had the words "engine, gearbox and transmission mechanism not in a preassembled condition", also with the same concessional BCD rate of 10%. 22. Having understood the scope and canvas of the relevant notifications, we proceed to apply this knowledge to the actual impugned imports. 23. From the samples of the Bill of Entry and related documents filed by appellants in page 32 onwards of compilation of documents Vol-I, we find that in a sample Bill of Entry No.7949107 dt.14.09.2012, the imported goods were declared as "BMW cars in CKD". In the Bill of Entry the imported goods are declared as falling within the Customs Tariff Heading 87039090 and claiming benefit of Notification No.12....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ulative sense requiring the fulfilment of all the conditions that it joins together. However, even in such a connection, it is, by force of contents, read as "or" (Ishwar Singh Bindra v. State of Uttar Pradesh - AIR 1968 SC 1450 / (1969) (1) SCR 219; Mohd. Abubakar Siddique v. Mustafa Shahidul Islam (2000) 2 SCC 62. The word "or" is normally disjunctive and the word "and" is normally conjunctive. But at times, the word is read "vice versa" to give effect to manifest the intention of the legislature as disclosed from the context. [Cable Corporation of India Vs Commission of Labour (2008) 7 SCC 680]. In our view, the word "and" in the above sentence necessarily have to be read in the disjunctive sense, as "or", since otherwise it would lead to a absurd interpretation. The intention of the law makers is clear which is manifested by clarification letter of the Tax Research Unit dt.25.03.2011 where in para-9 it has been explicitly clarified as under : "the imports in the form of CKD kits where all the parts and components including engine, gearbox and transmission assembly are present in completely knocked down condition will attract 10% BCD" [EMPHASIS ADDED] Hence any attem....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lying any other part and supplying the single product under the nomenclature "Automatic Transmission"; that all the other so-called "Add-on Parts" are merely required for integrating the gearbox/engine assembly with the car body and mounting the same on the chassis/body of the car. We find ourselves in agreement with these conclusions. 30. There is also no caveat in the concerned Notification that noninclusion of such "Add-on parts" would have the effect of treating the otherwise pre-assembled engine/transmission mechanism/gearbox as "not" pre-assembled. 31. The adjudicating authority has also exhaustively alluded to the parts physically contained in the said assemblies in their imported form as per the technical literature of the manufacturerssuppliers, the technical literature uploaded by the manufacturers at their websites, the technical details of their documents including bill of material and test certificates of M/s. ZF, Germany, the Detailed Packing List, test certificates, list of parts assembled at Chennai plant, etc., to arrive at such a conclusion. Similar analysis and conclusions have been made in respect of "engine assembly". 32. So also, in para 12.8 of the i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....components that go into the assembling of an automatic gearbox. Hence it appears to reason that the imported "transmission sub-assembly / assembly auto gearbox / automatic transmission" are gear box / transmission which are already preassembled at the time of import. 34. Reference is also made to letters of appellants dt. 22.03.2013 and 04.04.2013 wherein it has been clarified that they do not assemble internal components of engine and automatic gearbox at the Chennai plant. 35. "List of add-on parts" contains parts like flange nuts, clip nuts, hex nuts, spacer bolts, head screws, self-tapping screws, packing washers etc. which are locally assembled on to the imported engine and transmission sub-assemblies merely provides linkage for these mechanism with the rest of the car parts and are useful only for completing the integration. It is therefore evident that these "addon parts" are not of the genre that are required to complete "preassembly" of the engine / transmission / gear box mechanisms imported. 36. In para 26 (xii), the adjudicating authority has analysed the nature of the imported "transmission sub-assemblies" in more than five pages of the impugned order. The dis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....automatic transmission / gear box supplied by M/s.ZF, Germany have undergone standard testing procedures before they are supplied to M/s.BMW AG Germany, a fact which has been admitted by BMW India. It has also been admitted by appellants that the imported transmission sub assembly is not tested in any manner at the Chennai plant before the car assembling process. The adjudicating authority has correctly concluded that a critical part like gearbox cannot be assembled onto the car without first undergoing all mandatory tests and checks which clearly indicates that the product so tested and marketed as an "Automatic Transmission" by the manufacturer-supplier is a complete and functional automatic transmission and does not constitute any subassembly thereof. 39. So also, the imported engine assemblies already incorporated parts and components like crankshaft, cylinder heads , crank cases, cylinder head covers, flywheels, pistons, exhaust and inlet valves etc. Such critical parts and components are not separately imported. Secondly, even in their import documents appellants have described the said mechanism as "Assy. Engine". The parts of description "Assy. Engine" imported in the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eir visits to the Chennai plant of BMW India. On the other hand, Dr. N.Ramesh Babu, whose report has been relied upon by the Department, has inspected the imported goods at the stage of import itself. 41. A grievance has also been brought by appellant that crossexamination sought by them of Dr. Ramesh Babu was not granted. True, refusal to grant cross-examination in such cases would may possibly put to question the admissibility of the evidence given in the said report. Be that as it may, in our view, the technical opinion of the experts appointed by the appellants also cannot be given any relevance since, as discussed above, they have not examined the goods in the condition as they were imported but only at the factory of the appellants. In any case, the goods as imported, and as per packing list has to be critically examined vis-à-vis the conditionalities of the exemption notification, as per the discussion herein above. We have found that the imported goods as per the packing list would not satisfy the condition of "engine, gear box or transmission mechanism not in preassembled condition" and hence by no stretch of imagination would they be able to benefit from the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....D kit" was inserted into the Exemption Notification No.21/2011-Cus. We are therefore of the considered opinion that the goods imported by the appellants will not benefit from the B.C.D rate of 10% but will only be eligible for higher B.C.D. rate since the CKD kits imported contained engine or gearbox or transmission mechanism in preassembled form (but not mounted on chassis or body assembly). Both for the periods 01.03.2011 to 23.03.2011 as also 24.03.2011 to 11.04.2013, the appellants are not entitled to a rate of B.C.D. @ 10% but will necessarily have to discharge B.C.D @ 60% and 30% respectively only. Issue No.I is answered in favour of Revenue. 44. The appellants have also argued on the ground of limitation. Ld. Advocate has drawn our attention to Examination Order of the concerned examining officer dt. 09.02.2013. It is seen that the order for examination includes to examine whether engine, gearbox and transmission mechanism are pre-assembled or not. The examining officer, by a report dt. 07.02.2013, has reported that engine, gearbox and transmission mechanism are not in a pre-assembled condition (PTC). Ld. Advocate has contended that the fact of these examination reports w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that will stare the Customs Authorities in the face and demolish the allegation that appellant has suppressed facts of import of pre-assembled engine and preassembled transmission mechanism or that they have misstated the description of the goods to avail concessional rate of duty. 50. In arriving at these conclusions, we draw sustenance from the ratio laid down by the Hon'ble Apex Court in Pushpam Pharmaceuticals Company Vs CCE Bombay - 1995 (78) ELT 401 (SC). The relevant portion of the judgment is reproduced below : "4. Section 11A empowers the Department to re-open proceedings if the levy has been short-levied or not levied within six months from the relevant date. But the proviso carves out an exception and permits the authority to exercise this power within five years from the relevant date in the circumstances mentioned in the proviso, one of it being suppression of facts. The meaning of the word both in law and even otherwise is well known. In normal understanding it is not different that what is explained in various dictionaries unless of course the context in which it has been used indicates otherwise. A perusal of the proviso indicates that it has been use....
X X X X Extracts X X X X
X X X X Extracts X X X X
....jected." 51. Precisely for these reasons, we have no hesitation in holding that the extended period of limitation cannot be invoked in this case and hence, the differential duty liability can be confirmed and demanded only for the normal period of limitation from the date of issue of the Show Cause Notice. For this limited purpose, the matter would be required to be remanded to the adjudicating authority to work out the duty liability afresh limited to the normal period of limitation. So ordered. Hence Issue No.II is answered in favour of appellant. 52. Coming to the issue of penalties, we find that the adjudicating authority has imposed penalty equal to the duty determined under Section 114A of the Customs Act, 1962. For the very reason that ingredients justifying invocation of extended period not being present in this case, further also taking into account that the issue per se revolves around interpretation of the notification which itself underwent a number of changes, we hold that the penalty under Section 114A of the Customs Act, 1962 is not just and fair and is therefore set aside. So ordered. 53. However, with regard to confiscation of the goods, as there has been ....