TaxTMI 
TaxTMI 
2023 (11) TMI 1087
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....urpose of manufacture/assembly of the PIMM, 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 subje....
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....ition by willfully mis-declaring and misclassifying 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 ....
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....ad with Rule 1 of GIR. Thus, he submitted that the provisions of Rule 2(a) of GIR shall not be applicable for determination of the ADD liability on the subject goods. He further submitted that 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 impor....
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.... BPL Pharmaceuticals Ltd. Vs. Commissioner of Customs 1995 (77) E.L.T. 485 (S.C.) and the order of this Tribunal passed in the case of Diamond Cements Ltd, Vs. Commissioner of Central Excise - 2012 (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 ....
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....davad Municipal Corporation, certifying that Sanjay Kumar Mithabhai Sutariya died on 25.02.2023 and the case was registered vide Sl. No.190 in the record of the Corporation. Since, the deceased appellant is 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 pr....
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....hout any further value addition thereto), then the same are liable for payment of anti-dumping duty. The appellants herein, had claimed that they had manufactured the PIMM (an excisable commodity), out of the imported 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 ....
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....ay in 1994. I am presently an Institute Chair Professor in the Department of Mechanical Engineering. My areas of interest are CNC Technology, Manufacturing Automation, 3D Printing, Computer Graphics and Innovating Product Development. Application of 3D printing to produce injection molds with conformal cooling channels is one of my specializations. I visited JH Welltech Machines (India) Pvt. Ltd., Ahmedabad, along with a research scholar on March 23, 2016 (Wednesday). We studied the Plastic Injection Molding Machines (PIMMs) 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....
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....machine." 8.4. Furthermore, the financial aspects of the appellants' company were also verified by M/s Avtar & Bhavesh, Chartered Accountants, who vide certificate dated 25.01.2016 had provided the details of cost of machine manufactured by using both domestic/imported parts. The certificate together with the cost sheet (both value and quantity wise) attached thereto, are extracted herein below: 9. On careful reading of the contents in the certificates dated 09.11.2012, 10.05.2016 and 02.08.2016 (referred supra) issued by the Chartered Engineers and the 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....
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....rescent lamps (CFL) and not on parts thereof. The relevant paragraphs in the said order are extracted herein below: "8. We find that the issue of whether the parts of CFL would in itself be liable for imposition of anti-dumping duty was a issue between two ministries of Govt. of India. The Office Memorandum No. 162/2006-DGAD, dated 1-5-06 as issued by DGAD is as under: "No. 162/2006-DGAD Government of India Ministry of Commerce and Industry Department of Commerce Directorate General of Anti Dumping and Allied Duties Room N. 260-A, Udyog Bhawan, New Delhi Dated 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 c....
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....ed Authority under the Ministry of Commerce & Industry and not on any other product. In the present case, since the product in question under investigation was confined to 'plastic processing or injection molding machines', the action on the part of the Customs department to consider some other product to fall within the ambit and scope of the product under investigation cannot hold good, having lack of authority conferred under the statute. Therefore, in our considered view, ADD shall not be levied on the goods imported by the appellants on this ground also. 12.1 The provisions for levy of Customs duties are contained in Section 12 of the Customs Act, 1962. It has been mandated that duties of customs shall be levied at the rates as specified under the Customs 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 furnishe....
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....te 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 unassembled or disassembled." Reading of Rule 2(a) of GIR makes the position clear that the said rule does not enact a special rule for classification, but only recognizes the existing practice in trading of goods in CKD/SKD condition. For example, a ceiling fan is sold in CKD condition only. Similarly, ready-toassemble or do-it-yourself, furniture items or bi-cycle are sold in CKD condition. In those cases, when the goods are imported as CKD kit, then they are classified as fan or furniture or bi-cycle 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 t....
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....a). The process involved for completion of the manufactured goods since, have taken place post importation of the goods in question, in our considered view, the provisions of Rule 2(a) of GIR shall not be applicable for change in classification of the imported goods and to bring such goods under the purview of Rule 9A ibid, for the purpose of levy of ADD thereon. 13. In support of the findings that appellants had imported the complete PIMM, the impugned order has mainly relied upon the e-mail correspondences and skype conversations made between the appellants and the representatives of the overseas supplier/entities. We have gone through such relied upon documents and found that the subject matter of discussions therein was principally confined to the area of development of manufacturing facility of the product in India etc. Further, 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 a....
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....WELLTEC MACHINES (INDIA) PVT. LTD. having registered office at B/3, Mayurpankh Apartments, B/h. Daxini Society, Maninagar, Ahmedabad - 380 008 and factory at Road No. 10, Plot No. 410, Kathwada G.I.D.C., Kathwada, Ahmedabad-382 430 is a closely held company registered with ROC vide CIN: U29100GJ2010PTC063100 and is engaged in manufacturing of injection molding machines. Details of cost of machines manufactured along with Gross Margin and Net Margin earned on the sales invoice randomly selected in terms of imported parts used, domestic parts used and labour used and direct expenses to manufacture the machine as well as indirect expenses is attached herewith. The above certificate is issued on the basis of books of accounts and other necessary documents produced before us for our verification and at the request of client. Certificate is issued without assuming any risk and responsibility on our part. PLACE: AHMEDABAD DATE :25.01.2016 ARTERE FOR AVTAR & BHAVESH CHARTERED ACCOUNTANTS TShakky (CA. B.S. THAKKER) PARNTER M.NO. 113020 Document 2 Machine B.E.NO. A Invoice Date Machine No. DATE PROFIT MARGIN STATEMENT ....