TaxTMI 
TaxTMI 
2023 (11) TMI 1087
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....the appellant had imported various parts from M/s Welltec Machinery Ltd., China. The appellant and the overseas supplier are related persons in terms of Rule 2(2) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 and accordingly, the appellant got itself registered with the Special Valuation Branch (SVB), New Custom House, Mumbai for the purpose of valuation of the imported equipment/parts. The appellant had also claimed that it had domestically procured certain parts and equipment for manufacture of the complete PIMM and that it had discharged the Central Excise duty liability on manufacture of such goods. 1.2 In the matter of import of all kinds of plastic processing or injection moulding machines, an investigation was conducted by the Designated Authority (DA) in the Department of Commerce. In the preliminary findings, vide Notification No. 14/12/2008-DGAD, dated 10.02.2009, the DA had concluded that the subject goods had entered the Indian market from the subject country at the prices less than the normal value in the domestic market of the exporting country; that the dumping margins of the subject goods imported from the subject country wer....
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....ing the imported goods as parts, components and spare parts with the intention of evading ADD amounting to Rs.19,68,98,069/-. It has further been observed by the department that the appellant had planned the evasion meticulously in collusion with other directors of the importing firm and representative of the related foreign supplier to suppress the actual description of the goods, by mis-declaring them as parts and components to import all essential assemblies/sub-assemblies of PIMM manufactured by the related foreign supplier in CKD/SKD condition to evade payment of ADD. On the basis of investigation, the department had proposed for rejection of classification of imported parts of PIMM under CTI 8477 9000 /7318 1100 and classified the same under CTI 8477 1000 for the purpose of confirming the demand of ADD under Section 28(4) of the Customs Act, 1962. For this purpose, the department had applied the provisions of Rule 2(a) of the General Rules for the Interpretation (GIR) to the First Schedule to Import Tariff to hold that items imported should be classified as complete PIMM. Further, the department had also entertained the belief that the appellants herein, are expos....
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....the said rule has the application only to assembly operations and will not apply in a case, where extensive manufacturing activities are involved. Hence, he submitted that the components imported by the appellants cannot be classified as finished goods imported in un-assembled condition. In this context, he had relied upon the judgement of the Hon'ble Supreme Court, in the case of Chief Commissioner Vs. ACER India - 2004 (172) E.L.T. 289 (S.C.) and Shriram Vinyl & Chemicals Industries Vs. Commissioner of Customs - 2001 (129) E.L.T. 278 (S.C.); Order of the Tribunal in the case of LG Electronics India P Ltd., Vs. Commissioner of Customs- 2022(8) TMI 873 - CESTAT Allahabad, Ellora Time Ltd. Vs. Commissioner of Customs, Kandla - 2005 (188) E.L.T. (491) (Tri.). 2.2 Learned Advocate also submitted that even if, Rule 2(a) ibid is applicable for proceedings under Section 9A of the Customs Tariff Act, 1975, but the notification dated 23.03.2010 shall not be applicable inasmuch as import of PIMM in CKD/SKD condition was not a stipulated condition therein for levy of ADD. To support such stand, learned Advocate has relied upon the order passed by the Tribunal in the case of Anch....
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.... (283) E.L.T. 226 (Tri.), to state and submit that opinion of an expert in the field of trade, who deals in subject goods, should not be ignored and should be given due importance. 2.4 As regards the certificate of Chartered Engineer M/s Sai Siddhi Associates, relied upon by the Revenue for confirmation of the adjudged demands, learned Advocate submitted that the said certificate cannot at all be relied upon and that, if the said certificate is considered, then it goes in appellants' favour, inasmuch as it has been specifically confirmed therein that 'assemblies presently imported contribute to approximately 25% to 30% of the respective complete unit' i.e., PIMM. 3. Shri Ashwin Kumar, learned Authorised Representative (AR) appearing for the Revenue submitted that the adjudged demands confirmed in the impugned order are in conformity with the statutory provisions. In this context, he submitted that the appellants had imported complete PIMM by mis-declaring the same as parts, spare parts, components, sub-assemblies and assemblies of complete machine, with the malafide intention to evade payment of ADD, levied under Sl. No.12 of the table appended to notification N....
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....s no more in existence, the appeal filed by him should abate in terms of Rule 22 of the CESTAT (Procedure) Rules, 1982. Accordingly, the appeal filed by him abated. 6.1 The Directorate General of Anti-Dumping and Allied Duties, in the Ministry of Commerce & Industry, Government of India had initiated anti-dumping investigation, concerning import of 'Plastic processing machinery', originating from China PR. The said proceedings were initiated pursuant to the application filed by M/s L&T Demag Plastic Machinery Ltd., Chennai. In the Notification dated 08.07.2008, issued from file F. No. 14/12/2008-DGAD, the authorities had initiated investigation proceedings, concerning the products i.e., "all kinds of plastic processing or injection moulding machines, also known as injection presses, having clamping force not less than 40 tonnes, used for processing or moulding of plastic materials". On primary round of investigation into the matter, the Designated Authority had submitted its preliminary findings by Notification No.14/12/2008-DGAD dated 10.02.2009, with the conclusion that (a) the subject goods had entered the Indian market from the subject country at prices less than their normal ....
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....ported and locally procured parts and components and that on such manufacturing activity, they had discharged appropriate Central Excise duty liability. The details of the imported/indigenously procured goods, as submitted by the appellants in the tabular form, are extracted herein below: S. No. Imported part description S. No. Local part description I001 Mould platen, tie bar with lock nuts and toggle links L001 Base frame I002 Lubrication hose and Fittings L002 Programmable Logic Controller (PLC) I003 Mould adjustment motor and chain L003 Hydraulic valves I004 Screw & barrel set L004 Hose pipe I005 Heater band L005 Linear transducer I006 Servo systems L006 Hydro motor I007 Hydraulic safety valve back pressure adjustment valve L007 Seamless pipe I008 Electric cabinet with all Wirings L008 Hydraulic fittings I009 Controller cabinet L009 Aluminum checker sheet I010 Limit switches and proximity switches L010 Paint materials I011 Guard cover and safety Doors L011 Electrical panel & parts I012 Hydraulic manifold L012 Machine oil & grease I013 Pressure transducer L013 Allen bolts & hardwar....
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....Ms) being manufactured in their premises. We also visited a nearby factory where it was in use and witnessed its operations. JH Welltech imports certain parts like clamping unit, injection unit, servo drive, etc. They also domestically procure vital parts like machine base frame, PLC, hydraulic valves etc. In our opinion, it is not possible to conclude that the imported goods per se would constitute complete PIMM since without domestically procured parts and components, the imported goods cannot form a machine by any stretch of imagination. A detailed report is enclosed as Annexure-I to justify our opinion." (emphasis supplied) Further, Shri K.P.Karunakaran, in his technical opinion (supra) had also discussed about design, manufacture of PIMM and also its important sub-systems such as base frame, clamping unit, heating system, hydraulic system, PLC system etc., in forming the part of or participation in the manufacture of final product i.e., PIMM. Upon detailed study of the function of various machines, the said Professor in his opinion dated 02.08.2016, had concluded as follows: "In our view, the significance of the domestically procured parts & the activities undert....
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.... certificate dated 25.01.2016 issued by the Chartered Accountants (supra), the factual position is amply clear that the appellant had imported certain components of the PIMM from outside the country and indigenously procured some of the vital components for manufacture of the resultant final product i.e., PIMM. Further, the annexure to the certificate issued by the Chartered Accountant, as above, had also reflected that the indigenously procured components, both in terms of value and quantity wise, were also commensurate with the quantity reflected in the certificate furnished by M/s Sai Siddhi Associates, Chartered Engineers engaged by the Revenue. However, on perusal of the impugned order, we find that though the above referred certificates were produced by the appellants before the adjudicating authority, but the same were completely brushed aside and no findings were recorded therein, countering the expert opinion furnished by the authorities in the field. In this context, we find support from the judgement relied upon by the learned Advocate for the appellants in the case of Konkan Synthetic Fibre (supra), wherein the Hon'ble Supreme Court had held that the opinion of the expe....
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....ted the 1st May, 2006 OFFICE MEMORANDUM Sub. : Parts of CFL imported under HS code 98539.90 being classified under 8539.31 ready to use CFL - regarding. Please refer to your Office Memorandum No. 354/205/2001-TRU (Part I) dated 20th April, 2006, forwarding copy of representation dated 4th April, 2006 of M/s. Khaitan Electricals Ltd., whereby clarification has been sought on the scope of the product CFL imported from China PR and covered under AntiDumping Investigation conducted by the Designated Authority. In this regard, it is clarified that : (a) Anti-dumping duties were recommended/imposed on the following two types of CFLs: (i) Complete, ready to use compact fluorescent lamps wherein choke is integrated within the lamp. (ii) Complete, ready to use compact fluorescent lamps wherein choke is external. (b) Anti-dumping duties were not recommended on parts/components of CFL. (c) "CFL with choke" is complete ready to use compact fluorescent lamps wherein choke is an internal part. (d) CFL without choke as defined in the final findings is complete ready to use compact fluorescent lamps wherein choke would be external part. 2. This issues with the approval....
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....stoms Tariff Act, 1975 (for short, referred to as 'the Act of 1975'). On importation of the disputed goods, the appellants had filed the Bills of Entry classifying the imported goods under different customs tariff items (CTI), as per Chapters 73, 84 and 85 provided under the Act of 1975. The B/Es filed by the appellant were finally assessed by the Customs department at the port of import, accepting the declaration furnished by the appellant. The provisions regarding levy of ADD on the dumped articles are contained in Section 9A of the Act of 1975. Since, levy under Section 9A ibid, is confined only to the dumped articles and is not a general levy in respect of the imported goods as provided under Section 12 ibid, the notifications issued for the purpose of levy of ADD have to be minutely studied. Since, the goods in question imported by the appellants were not the complete PIMM by itself, and not brought under the CKD/SKD condition, the same in our considered opinion, cannot be subjected to levy of ADD and should be outside the scope and purview of section 9A ibid. In other words, the authorities functioning under the Act 1975, have to read the notification(s) in the proper perspec....
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....ycle and not as parts. The articles envisioned under the Rule 2(a) of GIR are (i) incomplete article possessing essential character of the complete or finished article; (ii) unfinished article possessing essential character of the complete or finished article; (iii) complete or finished article, in unassembled condition; and (iv) complete or finished article, in disassembled condition. 12.4 According to the department, the finished goods imported by the appellant were in un-assembled condition. The phrase "presented unassembled/disassembled" has been explained in the HSN Explanatory Notes as under: "(V) The second part of Rule 2(a) provides that complete or finished articles presented unassembled or disassembled are to be classified in the same heading as the assembled article. When goods are so presented, it is usually for reasons such as requirements or convenience of packing, handling or transport. .... (VII) For the purpose of this Rule, `articles presented unassembled or disassembled' means articles the components of which are to be assembled either by means of fixing devices (screws, nuts, bolt, etc.) or by riveting or welding, for example, provided....
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....rther, we find that nowhere in such retrieved documents/records, there is any whisper regarding importation of the complete PIMM machine. Rather, it transpires from such documentation that the appellants had not imported the complete machine and the items imported are only 'in part'. Furthermore, the statements relied upon in the impugned order are also not specific with regard to supply of the complete PIMM machine by the overseas supplier. Thus, we are of the view that blind reliance cannot be placed on such documents to conclude that the appellants had imported the complete machine, in order to fall within the purview of Rule 9A ibid read with the notifications issued by the Government of India in the Ministry of Commerce & Industry and the Ministry of Finance for the purpose of levy of ADD. 14. On the basis of the analysis made herein above, we conclude that the appellants herein had not imported the complete PIMM in order to fall within the purview of the notification(s) referred supra for levy of ADD. In this case, admittedly since the PIMM, complete in all respects was manufactured in India by using the domestically procured goods also, such imported equipment, in our....