TaxTMI 
TaxTMI 
2018 (11) TMI 370
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....ulticat 3 8134925 10.01.2017 Barge Fidelia 4 8141458 10.01.2017 Crawler Crane Further, in the month of February 2017, they imported "Old and Used Pipelines, Pontoons etc." declaring the same to be integral part of the dredgers already imported by them in January 2017, the details are as under:- Sr. No. BE No. & Date Declared description of the goods Declared CTH 1 8465433/ 07.02.2017 Old & used Pontoons, Integral Parts of Dredger "AI Mirfa, Kattouf and Embarka-5" 89011090 2 8465442/ 07.02.2017 Old & Used various types of Pipe Lines, Elbow, Fittings & Equipments, Integral parts of Dredger "AI Mirfa, Kattouf and Embarka-5" 89051000 The appellant declared the goods of both the above bills of entry under CTH 89011010 and 89051000 respectively. In the bills of entry, they claimed exemption Notification No. 12/2012-Cus dated 17.03.2012. After detailed investigation, a show cause notice was issued wherein it was alleged that the appellant imported and cleared "complete dredgers, pipelines, pontoons and other equipment and accessories" vide bills of entry No. 8142628 and 8145408 both dated 10.01.2017. Thereafter, they have imported "Old and used Pontoons and Pipelines....
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....nting to Rs. 8,68,74,159/- (Rupees Eight Crore Sixty Eight Lakh Seventy Four Thousand One, Hundred Fifty Nine only) under Section 28(4) of the Customs Act, 1962 along with appropriate interest in terms of section 28AA of the Act and order for recovery of the same from M/s. National Marine and infrastructure India Pvt. Limited, 404, 4th Floor, Centre Point, Andheri Kurla, JB Nagar, Andheri East, Mumbai-400059. (iv) I order to appropriate the duty of Rs. 8,68,74,159/- (Rupees Eight Crore Sixty Eight Lakh Seventy Four Thousand One Hundred Fifty Nine only) And interest Rs. 18,85,051/- (Rupees Eighteen Lakh Eighty five Thousand Fifty One only) already paid by M/s. National Marine and Infrastructure India Pvt. Limited, Mumbai against the said amount of duty and interest as confirmed at Sr. No.(iii) above, by vacating the protest. (v) I order to confiscate the impugned goods found to be wrongly classified and cleared under CTH 89011090 and 89051000 vide Bills of Entry Nos. 8465433 and 8465442, both dated 07.02.2017 valued at Rs. 29,50,78,835/- (Rupees Twenty Nine Crore Fifty Lakh Seventy Eight Thousand Eight Hundred Thirty Five only), under Section 111(m) of the Customs Act, 1962. Howe....
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....ds are not covered under any exclusive clause of the said note. He referred to British Standard, Part V in respect of CSD Dredgers and according to which a cutting suction dredgers is desired in four parts i.e. (i) Main Platform, (ii) Pipeline, (iii) Anchors and (iv) Cutter Heads. According to this standard, cutting suction is essential part of the complete cutter suction dredger. He submits that the pipelines, pontoons and equipment imported along with dredgers and additional same goods imported subsequently, are of the same nature and to put together for carrying out the contract. Therefore, there is no difference between the pipelines, pontoons, equipments imported along with dredgers and a part was imported subsequently but for the same Works Contract. He submits that Adjudicating Authority has heavily relied upon the statement of Technical Superintendent recorded under Section 108 of the Customs Act, who merely stated that dredgers imported in the first consignment are complete dredgers and the dredging work commenced on 15.01.2017 and 05.02.2017 even before arrival of second consignment. He submits that even though with the first consignment, the dredging work was commenced b....
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....e dredgers, is totally incorrect, in view of the fact that any consignment is dissembled into parts for the purpose of import then separate invoicing is done as per international shipping documents requirement and is done accordingly. He submits that pipes, elbows, fittings and pontoons imported in the second consignment clearly mentioned that the same constitute integral equipments of three dredgers already imported. Therefore, there should not be any doubt that the second consignment consisting of pipes, pontoons were essential part and parcel of the first consignment. He submits that the Adjudicating Authority has failed to refer the contract and the connected drawings and designs to carry out the project and requirement of dredgers which are only complete when they dump the dredging waste at the designated area. He submits that at the time of filing of bill of entry No. 8465433 dated 07.02.2017, the appellant have declared the goods under CTH 89011090 as old and used pontoons, integral parts of dredger Al-Mirfa, Kattouf and Embarka-5 as per packing list. Similarly, while filing the bill of entry No. 8465442 dated 07.02.2017, they have declared the goods under CTH 89051000 as ol....
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....eason, the Accessories (Condition) Rules, 1963 cannot become inapplicable. 2.2 Ld. Counsel further submits that it is not a case that dredger and pontoons, pipes and equipments imported together were only sufficient to carryout the dredging activity. The dredger Kattouf began on 25.01.2017 and dredger Al Mirfa began dredging on 06.02.2017. The pipelines and pontoons imported with dredgers were used to start the work but for completion second consignment was imported and the goods were imported with dredger or imported in second consignment were together used for the same dredging activity. Therefore, the provisions of Accessories (Condition) Rules, 1963 stands complied with. He submits that the Adjudicating Authority has wrongly contended that the clearance of impugned goods were made under risk management system purely based on self-assessment and self declaration is absolutely incorrect for the reason that jurisdictional Customs officer, Pipavav Port has in respect of both the bills of entry dated 07.02.2017 have examined the goods and verified the same to fall under CTH 8901 and 8905 respectively, in terms of Mandatory Compliance requirement in the examination order, after due ....
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....(AR) appearing on behalf of the Revenue reiterated the findings of the impugned order. He submits that in the present case, it is not disputed that pontoons, pipes and other parts in question were not presented together with the dredgers for assessment. The said goods were imported separately therefore, it is excluded from Chapter 89 and the same are correctly classifiable under respective headings. He referred to Accessories (Condition) Rules, 1963 and submits that the claim of the appellant that the goods are accessories parts of dredger, is not acceptable for the reason that as per the said Rules, accessories parts should be supplied along with that article and no separate charge is made for such supplies, their price being included in the price of the article. For this reason also, the goods in question cannot be treated as accessories and spare parts. In support of his submission, he placed reliance on the following judgments:- (a) Siemens Limited vs. CC, New Delhi - 1998 (89) ELT 684 (Tri.) (b) Lakshmi Machine Works Limited vs. CC, Chennai - 2006 (206) ELT 560 (Tri. Chennai) (c) CCE, Guntur vs. Dharti Dredging & Infrastructure Limited - 2010 (249) ELT 54 (Tri. Bang.) (d) ....
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....econd schedule but floating pipes, pontoons specially designed and components of CSD dredgers are not covered under any exclusion clause. We observed that as submitted by the ld. Counsel, the dredgers does not mean the bare dredger but it consists of four part i.e. (a) Main Platform, (b) Pipelines (c) Anchors (d) Cutter Heads. As per the British Standard BS-6349, the dredger consist of all the above four parts which include pipelines and pontoon also. If the parts such as pontoons, pipelines and other parts are excluded then the dredger will not be complete and the object for the use of the dredger cannot be achieved. From the facts of the case, even though the same parts were imported along with three dredgers but the remaining parts which were imported subsequently which are subject matter of this case were used for the same work in the same manner. In this position, some parts of same goods cannot be treated differently. 5.1 We have gone through the General Rules of Interpretation and the relevant Rule 2(a) is reproduced below:- "GRI 2. (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as....
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....sories, though they are in unassembled or dis-assembled form but taking entire material together, has only essential character of the complete or finished item. Therefore, irrespective of whether the dredgers imported with some parts and remaining parts imported subsequently, it cannot be interpreted that the subsequent import of parts and accessories are different and cannot be classified along with dredgers and parts imported initially. With reference to Rule 2(a), this Tribunal has dealt with a case of Rule 2(a) of General Rules of Interpretation of the Customs Tariff Act 1975, wherein the goods were separately imported at different Ports and at different point of time and even then the Tribunal has held that all the consignments shall be classified as finished article. The case of the appellant is on a much better footing that the goods were imported by the same appellant, only with a gap of one month but for the same project and for the use of entire consignment together. Therefore, by drawing inference from Tribunal judgment in the case of Samay Electronics Pvt. Limited vs. CC (Import), Mumbai - 2015 (328) ELT 238 (Tri. Mumbai), the goods imported in two different consignment....
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....essential character of the complete or finished by application of Rule 2(a) of the General Interpretative Rules. Aggrieved by this decision, M/s. Hindustan Motors filed civil appeal before the Hon'ble Apex Court and the Hon'ble Apex Court dismissed the said appeal which is reported at -2005 (181) ELT A130 (SC). In this case also the entire set of diesel/ petrol engine were imported in SKD/CKD form at different dates ranging from February 1999 to July 2000 therefore, even though the goods were imported at different time but for the purpose of classification of the goods, treated as presented together and classification was decided accordingly. In the present case also, there is no dispute that the parts and accessories which were imported along with dredgers are classifiable under the head of Dredger i.e. 8905. Therefore, the subsequent import under two bills of entry, which is the subject matter of this case also to be classified under CTH 8905 in terms of Rule 2(a) of General Interpretative Rules, in view of the above judgment. However, if the contention of the Revenue is accepted then only due to the different time of import of the complete set of equipment, the classific....
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.... clearly identifiable as such. Such parts and accessories are classified in the appropriate headings elsewhere in the Nomenclature, for example: From the above Chapter note in HSN, it can be seen that the goods imported by the appellant i.e. pontoons, pipes and other accessories are not excluded, therefore, the said goods being integral part of Dredger merit classification as Dredger under CTH 8905. This also clearly shows that the goods in question i.e. pipes, pontoons and other accessories are nothing but part and parcel of Dredger and are correctly classifiable as dredger under 8905. 7.1 The Revenue heavily relied on the General Note III under Section XVII of HSN which are reproduced below:- (III) PARTS AND ACCESSORIES It should be noted that Chapter 89 makes no provision for parts (other than hulls) or accessories of ships, boats or floating structures. Such parts and accessories, even if identifiable as being for ships, etc., are therefore classified in other Chapters in their respective headings. The other Chapters of this Section each provide for the classification of parts and accessories of the vehicles, aircraft or equipment concerned. It should however be noted that....
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....redging of a Coal Handling Berth. For this purpose, the appellant firm imported an old and used Cutter Suction Dredger in operational condition together with its equipment and other functional items. The appellants filed six different bills of entry in respect of different types of items imported along with the main body of the Dredger. These items can be broadly categorized as Dredger; Pipes c/w flanges; Rings & Nuts and Bolts; Anchors; Pontoons; Delivery valves, Spuds, Cutter Heads, Truck Tyres for use as Fenders; various Spare Parts and Consumable Stores. 2. The various items in respect of which different bills of entries were filed by the appellant company are as under :- Vessel Particulars Port of Supplier B/E No. and dated Brief description of the goods 1. M.V. Ostara Singapore 1/96-97 dt. 3-4-86 1(one) OH dredger Anchor handling pontoon type (Coby) 2. Do Line No. 2 Do 2/96-97 dt. 3-4-96 One Survey Boot (Hassan) 1. Pipes, bends, waterbox, bolts, 2. nuts etc. 3. Condock IV Rot. No. 60/96 Papendreckt 26/96 dt. 26-4-96 One Cutter Suction Dredger (Germini) 1. Various paints. 2. 4. Condock IV Rot. No. 60/96 Do 23/96 dt. 26-4-96 Floating Pipe Line 1.Bend in....
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....d Hopper Dredger moves to the designated area of discharging dredged materials without the assistance of any pipelines. In such type of Hopper Dredgers, neither the Suction Pipe nor the Discharge Pipe may be essential. In the case of Cutter Suction Dredger, the procedure for carrying out the dredging work is different. The Cutter-Head is fitted with the Dredger with a Suction Pipe beneath it. The said Cutter cuts the earth, rock etc. under the water when the dredged material accumulates. As these dredged material has to be taken from the Dredger for the continuous uninterrupted dredging work, Suction Pipe sucks the dredged material. The Suction Pipes are connected with the discharge pipe with the aid of flanges/belts, nuts and bolts etc. The discharge pipes then throw these dredged material at the designated area which may be at a distant place. It is this function of the Cutter Suction Dredger which involves the dredging as well as the discharging, which makes the Pipelines an essential part of the Dredger inasmuch as without these Pipelines the Dredger of the type in question will not be able to work properly. Para 4.4.1 of the British Standard Specification is being reproduced b....
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....Dredgers and therefore, they are entitled to the exemption Notification No. 133/87-Cus., dated 19-3-87. As we have held Pipelines as a part of the Dredger enjoying exemption under Notification No. 133/87, the appellants' further claim of exemption under Notification No. 106/92 dated 1-3-92, in the alternative, does not require any consideration. The appeal is thus allowed." From the above decision of the Tribunal, which was upheld by the Hon'ble Supreme Court, reported as Commissioner of Customs vs. Boskalis Dredging India Pvt. Limited - 2002 (139) ELT A313 (SC), it can be seen that the goods were absolutely identical and the Dredger was classified under CTH 8905 whereas the other parts of the Dredger which were imported at different dates proposed to be classified as parts and accessories. Further, the Tribunal has categorically held that all the goods including pipelines and parts of dredger to be classified under Chapter heading 8905.00 as Dredger and accordingly they are entitled to exemption Notification No. 133/87-Cus dated 19.03.1987. The aforesaid decision was further relied upon by the Tribunal in the case Dredging Corporation of India Limited vs. CC, Calcutta - 2002 ....