AI Drafter 
TaxTMI 
TaxTMI 
2019 (11) TMI 129
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....xchange rate of Rs. 47.1 per US$, the assessable value is determined at Rs. 1,43,39,925/- for the purpose of section 14 of the Customs Act, 1962. (b) The classification of all the components imported under the BE No 643559 dated 24.06.03 taken together is determined under Customs Tariff Item 85438999. (c) The provisional assessment made in respect of BE No 643559 dated 24.06.03 is finalized under Section 18 of the Customs Act, on the basis of revised assessable value and classification as ordered above. Consequently demand for differential duty amounting to Rs. 39,64,911/- is confirmed. (d) The goods imported under BE No 643559 dated 24.06.03, which were seized and released on the basis of Provisional release bond is confiscated under section 111(m) of the Customs Act, 1962. Since the goods are already released to the party they are ordered to pay an amount of Rs. 10,00,000/- redemption fine in terms of the bond executed by them. (e) I impose a penalty of Rs. 9,91,228/- on M/s IMCL, under section 112(a) of the Customs Act. (f) I impose a penalty of Rs. 9,91,228/- on M/s IMCL, under section 114AA of the Customs Act. (g) I impose a penalty of Rs. 2,00,000/- on Shri ....
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....tent of US$ 100019 on account of service charges, US$ 12000 on account of freight and insurance charges and US$ 45275 on account of differential price for software. After adding the above to the declared CIF value and 1% towards landing and handling charges the assessable value appeared to be around US$ 365249 equivalent to Rs. 1,72,03,243/-leviable to duty under CTH 85438999 at rate BCD 25% + CVD 16% + SAD 4%, and thus total duty payable was assessed at Rs. 87,39,248/- and differential duty to be paid was worked out to be Rs. 54,19,477/- 2.5 The goods were on request of Appellants assessed provisionally on execution of P D Bond for Rs. 1,72,03,242/- supported by Bank Guarantee of Rs. 86,01,625/-. The goods were released provisionally on filing post bill of entry manually on payment of differential duty of Rs. 54,19,475/-. 2.6 After completion of investigations a Show Cause Notice dated 09.11.2009 was issued to the appellants by Commissioner Customs (Import) Air Cargo Complex. 2.7 The show cause notice has been adjudicated by the Commissioner as per the impugned order. Aggrieved by the order appellants have filed this appeal. 3.1 We have heard Shri D B Shroff, Advocate ....
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....d. It is admitted by the impugned order and show cause notice that it is equipment in the local cable TV office that originates and communicates cable TV services and cable modem services through CAS. • The goods imported in the consignment cannot alone fulfil the objective as specified by CAS, i.e. of giving customers all possible viewing opportunities, and they had imported certain items from elsewhere; • There suppliers namely Tandberg are leading manufacturers of Headend equipments and this term is loosely used like office equipment. Items imported are headend equipments. • Even if the imported consignment gets the essential character of headend by application of Section Note 4 and Rule 2(a) of Rules of interpretation, still it cannot be classified under Heading 85438999. • The impugned order has proposed to make additions to the declared value as follows: • Imported software US$ 45,275; on the basis of LOI dated 26.04.2003 and unsigned purchase order dated 29.04.2003 ignoring the subsequent revised offer dated 25.04.2003 as per which the value of software was shown as US$ 7,796. • Services US$ 199,01....
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....uld be distributed proportionately amongst all the items shipped. • The conclusion in the impugned order that two components of system integration in the services purchase order were required to be added to the assessable value, as these services were performed abroad, is based on pure assumptions. Tandbergs officials stayed in India for 15 days and carried out the detailed design and layout of the appellants Headend premises and carried out product management services whilst setting up the equipment in the head end. The testing and factory acceptance test had to be carried out in India. It is only when all the equipments are put together then only the same can be tested. Thus the findings that the charges towards these two services need to beaded to the assessable value is contrary to show cause and is without any substance or evidence. The finding in impugned order para 25.2.1 is manifestly incorrect. A perusal of Revised offer and also the signed purchase order shows that there has been reduction in quantities as also increase in the prices of some items and not just the service charges. • Both show cause notice and impugned order record that origi....
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....n-original number 19/2015, dated 29-12-2015. The appellant imported certain goods at air cargo complex, New Delhi and filed Bill of Entry 2660085, dated 26-6-2003. They declared the goods as Multiplexor Satellite Receivers, test and measurement equipment etc. and attached six invoices covering 19 items imported. They indicated individual classification for the various items under Chapter 84/85 of the Customs Tariff. The bill of entry was assessed as per declaration and applicable customs duty was paid. Subsequently, information was received from SIIB Air Cargo Complex Mumbai, that investigations had been commenced against the appellant for import of similar goods at Bombay. Accordingly, Provisional Assessment was been ordered under section 18 of the Customs Act. 2. The investigation undertaken at the Mumbai revealed as follows : m) The importer had placed the order at UK for purchase of equipments - one set for Mumbai and another set for Delhi. Each set of equipment, taken together constituted 'Head End' for cable TV operations'. The 'Head End' was an equipment at a local TV office that originates the cable TV services and cable TV modem services to subscriber though Conditio....
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....ll merit classification under CETH 8525 20 19 as a transmission apparatus and not in 8543 as contended by the department. There is no undervaluation of the imported goods and the department has incorrectly included the amount towards software and post import services by ignoring the revised offer submitted by the foreign supplier and the purchase orders placed by the appellants. They also relied on the following case laws. Multi Screen Media [2015 (322) E.L.T. 421 (S.C.)], SET India Pvt. Ltd. [2003 (152) E.L.T. 190 (Tri-Mum)], and Essar Steel Ltd. [2004 (178) E.L.T. 713 (Tri-Bang.)]. 7. The Learned DR justified the impugned order. In his written note dated 11-9-2017, DR emphasised the following : 1. The goods imported were classified under different headings but were found to be complete equipment (i.e. Head End) classified under 8543 89 99. Out of 19 items indicated in the Bill of Entry, physically only 8 items were presented since several cards were already assembled in the main unit. 2. The investigation lead to the recovery of several incriminating documents, which revealed that the importer had not given proper description in the bill of entry, but the goods imported ....
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....tion Note 4 to section XVI the same will be classifiable under 8543. Section Note 4 to Section XVI is reproduced below : "4. Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function." 11. From the relevant purchase order, we note that different equipments have been ordered which are meant to be interconnected in such a way as to perform a common clearly defined function. This is the function of 'Head End'. Department has taken a view that this function is to be classified under 8543. But this heading is a residual heading only for machines not included elsewhere. The function performed by 'Head End' is that of transmission of TV channels over cable TV. Such a function will be clearly covered by the Heading 8525 which is reproduced below : "Transmission apparatus for radio telephony, radiotelegraphy, radio-broadcasting or television,....
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....ission that is received by such apparatus by line. Obviously, if the transmission apparatus transmits the signal by line, the corresponding reception apparatus will necessarily receive the signal that is transmitted, only by line, we are unable to see the relevance of this point to the classification of the goods under consideration." 13. Similar views have also been held in the case of Commissioner Customs v. Multi Screen Media Pvt. Ltd. (supra). By following the above decisions, we are of the view that the imported goods are rightly classifiable under 8525. The differential duty payable is required to be requantified and for this purpose the case is required to be remanded. 14. Next we consider the question of valuation. During the course of investigation, the department has recovered the purchase order which was placed by the appellant on the supplier. From this, it is evident that the supply included, apart from supply of equipment, also the necessary software which is to be embedded in the equipment before supply of the same. The PO further includes setting up of equipments in India after receipt thereof in this country. The adjudicating authority has included both ....
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.... held by the adjudicating authority. We uphold the addition in the assessable value made in the impugned order. 19. In view of the misdeclaration established in respect of valuation, the imported goods will be liable for confiscation under section 111 of the Customs Act and the appellant will also be liable for penalty. 20. The issue is to be remanded to the adjudicating authority only for the purpose of re-computing the differential duty in the light of the above. He will also decide the penalties leviable under various sections in the light of the differential duty which will arise as above, after hearing the appellants." 4.4 The details of items imported at Mumbai and Delhi are detailed in the table below: Unit and Total FOB Value in US$ Place of Import Delhi Mumbai Bill of Entry No/ Date 260085/ 26.06.03 643559 / 24.06.03 S N o Description Qty Unit Total Qty Unit Total Invoice No/ date 271105515/20.06. 03 271105509/20.06. 03 1 Multiplexer MUX 2C MX 5640 3 ....