TaxTMI 
TaxTMI 
2025 (6) TMI 1284
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....ounsel for appellants, is the crux of objection to the findings herein and which we shall attend to, by the by, after dwelling briefly on the background. 2. The story really goes further back and in it, Shri Moti Bhatia, first of the appellants and partner in M/s Moti International and M/s Komal International, is alleged to be a key figure. The firms were in the business of manufacturing of, and trading in imported, electronic goods and electric appliances and, for themselves, imported, branded and unbranded, parts and panels from manufacturers across the world including many well-known in the market which, since 2002, was stocked in their warehouse at Bhiwandi, Maharashtra and transferred to their factory at Bicholim, Goa to be used in production of television sets that were sold under the name and style of 'CROWN' or cleared unbranded. After closure of production in August 2015, the appellants imported 'LED panels'- 924 nos. for 32" and 40" sets, 542 nos. for 40" and 50" sets, components of LED television sets and one 75" LED television for which three bills of entry no. 3947389/18.01.2016, no. 3947391/18.01.2016 and 3947393/ 18.01.2016, classifying the goods for assessment at....
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....ot exactly in the lower segments of the market and consumers, discerning as they are, would not, in all likelihood, purchase electronic goods from 'grey market' with hardly any assurances and warranties unless the costs were abysmally low as even to forgo consumer finance. Unless, authorized dealers were, themselves, on it which, not unnaturally, should have been cause of concern to these manufacturers and we perceive not a whiff of that either. That, in any case, was amateur meandering through ordinary consumer behaviour and brand building theories; we shall not be found lagging in conceding that others are better versed in, and knowledgeable of, such weighty matters as marketing and intelligence. 4. We may, however, enunciate that, for us, concern here is about the finding under challenge, the show cause notice that led to the finding and the facts, circumstances, documents and deposition that framed the boundaries of the notice - the established facts, as it were - on which known law - comprising statutory obligations on importers and stipulations on acceptability of facts - is to be applied. The notice [ DRI/MZU/NS/Enq-09/ 2016 dated 6th November 2018 ] issued to M/s Moti In....
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....hat which prompted the adjudicating authority to charge differential duty and to impose penalties. It was further contended that the evidence available could not be denied from being deployed in the same manner and fashion as it would have been supportive in proceedings against the imports that were proceeded against. He insisted on referring to the evidence considered by the Settlement Commission and which, according to him, was unalloyedly applicable to the present matter too. In response to query from the bench on the peculiarity of joint and several responsibility for the duty and penalties, he was unable to provide legal basis for that outcome. 7. It may not be mystifying to the protagonists but, to us, men of uncomplicated existence, there is something discordant about a scheme of exemptions, which, admittedly, acknowledges 'LED panels' as independently assessable article on import, is held as withholding the privilege therefrom if imported with other articles necessary to make that exempted article functional. We can appreciate concession being afforded to parts because of potential for deployment in activities that contribute more to national income than mere trading in ....
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....ned exemption not thought fit by the Central Government, the author of its being and not ignorant of the deeming for the purpose of classification, for not making intent of including 'deemed article' clear in furtherance of certainty in taxation. For it must certainly be conceded that the alternative, of recourse to rule 2 of General Rules for Interpretation of the Import Tariff appended to the Customs Tariff Act, 1975 is, by the breadth of the limited deployment of expressions, susceptible to individual determination and an exemption that is contingent on such individual determination is discriminatory in application. 10. We may, at this point, pause to reflect on the Schedule to the Tariff and the General Rules for Interpretation of the Tariff appended to Customs Tariff Act, 1975 and observe that its genesis and deployment is not just for charging the duty from the authority in section 12 of Customs Act, 1962. It is a child of the Harmonized Commodity Description and Coding System [ Harmonized System of Nomenclature ( HSN ) ] conceived and gestated by the World Customs Organization (WCO) as standard 'menu', so to speak, in which on the right portion, each Member-State gets to ....
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....ue of the first notice, is on record. Respect for a process of immunization afforded by legislative enactment is demonstrated in breach by taking up the same evidence to be tested in adjudication or appeal by authorities to which the Settlement Commission is not subordinate. We have sufficient respect for the law to desist from even venturing to evaluate evidence that was before the Settlement Commission. We are no less aware of the legal obligation to subject statements to the test of section 138B of Customs Act, 1962 and to entail acceptance of electronic origin documents and information to the certification under section 138C of Customs Act, 1962. Both are visibly absent here. They, too, must be discarded from these proceedings for either or both reasons set out above. Either way, the evidence relied upon by the adjudicating authority has no saving grace from law. 13. Rule 2 of General Rules for Interpretation of the Tariff appended to Customs Tariff Act, 1975 is not an absolute rule, of its own, but is an extension of rule 1 which places emphasis on the description as the test for placement and at each of three levels of enumeration. Thus, there is no bar on merit classifica....
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....n, this argument is completely illogical and again that is not the import of the language of the Rule. If the argument of the Ld. ASG has to be accepted, then we would have to concentrate only on the later part of the Rule, ignoring the first part of the Rule and such dissection, in our opinion, is not possible. The sine qua non for the application of this Rule is that any imported article, which is "as presented", must have the essential character of the complete or finished article." This condition cannot be ignored and we cannot allow the reading only of the second part beginning with words "It was also to be taken to new reference..........." for application of the Rule. The Rule must apply as a whole. Ld. ASG was not able to point out as to how the first condition can be satisfied in the present case. A mere PCB or a CRT, in our opinion, under any circumstances, cannot be held to have essential character of the CTV. It is only when this first condition is satisfied that the remaining clause would have to be read and thereby, the words "that article" used in the later part would have to pass the test of the opening words of the clause "as presented, the incomplete or unfinished....
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....f CRT and PCB from the office of the DGFT, that too, as per direction given in the communication dated 31-8-94 issued by the Ministry of Industries granting permission for establishment of the company for manufacture of CTV. It is also clear from the above communication that the Govt. of India was fully aware of the proposal of the assessee to import the required components for manufacture of CTV and to gradually increase the use of components locally purchased from India. It is not the case of the Revenue that import of the consignment covered by any of the 94 Bs/E is in contravention of law if the goods comprised therein are to be treated as parts of components. Assessments were also being made under the relevant heading or sub-heading in respect of each component as and when Bs/E were presented during the relevant period. It is in the background of the factual position, as above, we are to consider whether by applying Rule 2(a) of the Interpretative Rules the components imported are to be treated as CTV presented unassembled. 17. In the light of the authoritative pronouncement of the Apex Court, it is beyond challenge that HSN Explanatory Notes to Rule 2(a) has to be ap....
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.... was held that it was an import of individual parts and not Fax Machine in unassembled form as fax machines are not such type of machines which for convenience are required to be transported in an unassembled state. This decision was affirmed by the Supreme Court in 2001 (133) ELT A91. In SAB Electronics Ltd. - 2001 (132) ELT 161 (T) = 2001 (44) RLT in 137 and Phoenix International Ltd. - 2001 (138) ELT 484 also Tribunal has taken recourse to HSN's Explanatory Notes to Rule 2(a) in order to arrive at a conclusion whether the parts imported are unassembled form of final and complete article. In the present case the complete or finished article is CTV. It cannot be for a moment contended that CTV has to be presented unassembled for the convenience of packing, handling and transporting. 19. It is also explained in HSN Notes that, for the purpose of Rule 2(a), 'articles presented unassembled or disassembled' means articles the components of which are to be assembled either by means of simple fixing devices (screws, nuts, bolts etc.) or by riveting or welding, for example, provided only simple assembly operations are involved. xxxxx 26. We will now examine the....
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....gh Court of Calcutta Customs authorities sought to assess the components of colour TV imported by the assessee as complete TV set in SKD condition. The components were imported under different consignments. The High Court took the view that each consignment has to be separately assessed. It was further observed that even if one importer brings different items which are admittedly spare parts and components the Revenue authorities cannot take the plea that if those are assembled together there would be complete TV set. Ghanshyam Chejra is yet another decision of the Calcutta High Court where a similar view was taken. 29. Learned Member Technical has sought to distinguish Polar Appliances v. CCE - 2001 (127) ELT 448(T) = 2001 (43) RLT 32 for the reason that in Polar Appliances the import was from different foreign suppliers whereas in the present case it was from a single supplier. According to the appellant herein the foreign suppliers are from different countries and Sony International (S) Ltd. is acting only as a consolidating agent for procuring these components and shipping the same from Singapore for convenience. As mentioned earlier the shipping document would go to s....
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.... decision of the Calcutta High Court for the reason that in that case the import was by three Export Houses. We find that the very same High Court has taken a view in Trident Television Private Ltd. v. CC, 1990 (45) ELT 24 that even if the imports are made by one importer the Revenue authorities cannot club together different consignments of components to arrive at a conclusion that they would make complete TV sets. 30. In Vishal Electronics Pvt. Ltd. a decision of this Tribunal an elaborate discussion is there on this issue. In the above case the assessee had imported under 5 consignments, components and sub-assemblies of CCT Video Camera. One consignment under REP licence and others under OGL. The Revenue took the view that when these imported goods are put together it formed complete sets of video camera in CKD condition the import of which is restricted as per the terms of Import Policy and required specific licence which the assessee did not possess. The Tribunal took the view that each B/E must be considered with reference to either the licence in case where specific licence is necessary and in other cases the particular tariff item relating to goods which could be i....