TaxTMI 
TaxTMI 
2026 (3) TMI 1089
X X X X Extracts X X X X
X X X X Extracts X X X X
.....2016 is denied. The benefit of Sl.No.302 of Notification No.50/2017.Cus dated 30.06.2017 for BCD in respect of BE No.4275098 dated 29.07.2019 and BE No.6147126 dated 19.12.2019 is denied and IGST under Schedule II-132 is chargeable. The said goods under all the three bills of entry are reclassified under CTH 4911 99 90; b. the demand of duty amount of Rs. 15,40,46,243/- (Rupees Fifteen Crores Forty Lakhs Forty Six Thousand Two Hundred and Forty Three only) from M/s.Bharat Electronics Limited, Jalahalli Post, Bengaluru - 560 013, being the differential Customs duty (inclusive of BCD, SWS and IGST) in respect of the Bills of Entry in (i) above is confirmed under the provision of Section 28 (4) of the Customs Act, 1962; c. the demand of applicable interest involved on the differential Customs Duties as mentioned at (ii) above, is confirmed under the provisions of Section 28AA of the Customs Act, 1962; d. I impose penalty of Rs.15,40,46,243/- (Rupees Fifteen Crores Forty Lakhs Forty Six Thousand Two Hundred and Forty Three only) on M/s Bharat Electronics Limited, Jalahalli Post, Bengaluru - 560 013 under Section 114A of the Customs Act, 1962. However, in cas....
X X X X Extracts X X X X
X X X X Extracts X X X X
....10% IGST @5% Total Duty (Rs.) 1 SYSTEM ENGINEER REPORT MANAGEM ENT WC, A391111, 80005979 2 1 53,86,667 37,51,81,357 50/2017 -Sl. 302 5% 1,87,59,068 18,75,907 1,97,90,81 7 4,40,081 2 SYSTEM ENGINEER REPORT MANAGEM ENT MF, A391111, 80005079 2 10 53,86,667 37,51,81,357 50/2017 -Sl. 302 5% 1,87,59,068 18,75,907 1,97,90,81 7 4,40,081 75,03,62,714 3,75,18,136 37,51,814 3,95,81,6 33 8,08,51,583 (iii) Under BE No.6147126 dated 19/12/2019 DUTY PAID (In Rs.) SI No. Item Descript ion Qt y (In Nos) Unit Price (In USD) Ass. Value (In Rs.) Notfn. No. & Date BCD Rate BCD SW Cess @10% IGST @5% Total Duty (Rs.) 1 Management Activities Report. A391111, 4100076 804 1 47,43,4 44 34,34,25,3 46 50/201 7 -Sl. 302 5 % 1,71,71, 267 17,17,1 27 1,81,1 5,687 3,70,04, 081 2.2. In the BOE dated 04.08.2016, the appellant declared classification of the imported technical documents and handbooks etc. under Customs Tariff Head (CTH) 49070030 and claimed exemption under Sl.No.268 of Notification No.12/....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... The learned Senior Advocate has submitted that SBT is an all-weather, lightly armoured, self-propelled, radar guided weapon system. Upgrade Schilka project involves improving the existing tank by installing air conditioning, power steering, improving radar functioning and various other parameters. LRSAM missile systems are installed in Navy ships as defense equipment which consists of MFSTAR and Weapon Control System which are used to intercept various aerial targets. The appellant was nominated by the Ministry of Defence as the lead integrator who would supply LRSAM and MFSTAR systems to Mazagon Dock Shipbuilders Limited for installation on the ships. 3.3. Further explaining the documents imported in brief, he has submitted that against first BOE dated 04.04.2016, they had imported user handbook relating to upgradation of the SBT which was first made in the year 1970. The imports were made in terms of Purchase Order dated 16.06.2011 which includes various other items relating to SBT such as antenna system, radar processor etc. The said manual provides details on the operation of the system, technical manual in various parts containing description of the system, related drawing....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Ltd. Vs. CC(Airport & Air Cargo), Chennai [2018(363) ELT 277 (Tri. Chennai)]. 3.5. Further, he has submitted that the imported goods being technical material integral for the purpose of understanding the functioning and execution of the main equipment, the same has to be re-classified along with the main equipment. It is submitted that the benefit of exemption Notification No.19/2019Cus dated 06.07.2019 being extended to the imports of the main equipment I.e. LRSAM and MFSTAR in terms of the order dated 15.11.2021, the same benefit ought to be extended to the imports made against BOEs dated 29.072.109 and 19.12.2019. 3.6. Learned Senior advocate has further submitted that the main equipment imported by the appellant are for defence related purposes; therefore, in terms of Notification No.19/2019Cus dated 06.07.2019 wherein exemption from payment of BCD and IGST in respect of imports of equipments for LRSAM and MFSTAR is admissible; therefore, no duty shall be liable to be paid on the technical documents imported by the appellant. Further, they have referred to the Notification No.02/2025Customs dated 16.01.2025, which amends Notification No.19/2019 by substituting Sl.No.21 i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the judgment of this Tribunal in the case of Hindustan Aeronautics Limited Vs. The Principal Commissioner of Customs, Bangalore [2024-VIL-1600-CESTAT-BLR-CU]. Also in support of their submission, they have referred to the following judgments:- i. Roto Inks (P) Ltd. Collector of Customs [1990(47) ELT 398 (Tri.)] ii. Lakshmi Cement Vs. Collector of Customs, new Delhi [1996(84) ELT 271 (Tri.)] iii. CC (General), New Delhi Vs. Gujarat Perstorp Electronics Ltd. [2005(186) ELT 532 (SC)] 3.9. It is further submitted that invocation of extended period of limitation is unwarranted in case of imports under BOE dated 04.08.2016. The Senior Advocate has submitted that the appellant being a public sector undertaking under the Ministry of Defence and the imports were made against filing proper BOE without any misdeclaration of the description of the goods imported as per the invoices, technical write up etc. The appellant has declared its classification under CTH 49019900 as "printed books, brochures, leaflets and similar printed matter" as per their bona fide belief; hence, the demand confirmed invoking extended period of limitation by the learned Commissioner cann....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e power distribution, audio and video controls, indicators, radar, navigation, etc. The manual contains block diagrams of the cabling and also details of the power distribution. d. Maintenance: provides for the maintenance details of each equipment including Schilka's fire control subsystem. The maintenance for the Fire Control subsystem would be done mainly under two categories preventive maintenance and corrective maintenance. ii. BE No.4275098 dated 29.07.2019-For LRSAM and MFSTAR project. a. The documents imported under this BoE were all related to the weapon control system (WCS) fort the LRSAM along with MFSTAR. The main purpose of these documents is to summarize the management and system engineering activities for the WCS. b. A few of the documents that were a part of this report included the details of the meeting conducted, ship survey, details regarding the lab facilities, risk management, etc. Additionally, the report also includes details of the IDS activities, details of the internal simulators, RFI analysis, plans detailing about quality assurance and also details of various other meetings and activities held. c. With re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cs Limited relating to testing and upgradation of the Jaguar aircrafts also subjected to strict confidentiality agreement and not for general public, arrived at the conclusion that the said imported technical write-ups, documents, manuals etc. are classifiable under CTH 4901. Analysing the principles laid down in the judgments of Hon'ble Supreme Court in the cases of CC, New Delhi Vs. Parasrampuria Synthetics Ltd. (supra); Givo Ltd. Vs. CC, New Delhi (supra); CC (General), New Delhi Vs. Gujarat Perstorp Electronics Ltd. (supra) and of the Tribunal in the case of Quest Life Sciences P. Ltd. Vs. CC, Chennai [2015(325) ELT 759 (Tri. Chennai)]. This Tribunal observed as follows:- 8. The principal issue for determination in the present case is: whether the imported good viz. technical documents are classifiable under CTH 49019900/49011010 and the appellant are entitled to benefit of Notification No.50/2017-Cus. dated 30.06.2017(Sl. No.302). 9. The details of technical documents mentioned in the respective Purchase Orders/ Bill of Entry are as follows:- ELBIT documents Milestone-1: System Requirement Review documents for Helmet Mounted Display....
X X X X Extracts X X X X
X X X X Extracts X X X X
....riff item Description of goods Standard rate Integrated Goods and Service s Tax Condition No. (1) (2) (3) (4) (5) (6) 30 1. Any Chapter Commercial catalogues in book form Nil - - 30 2. 490110 10, 490191 00 or 490199 00 Printed books (including covers for printed books) and printed manuals, in bound form or in loose-leaf form with binder, executed on paper or any other material including transparencies Nil - - 11. The Revenue denied the benefit of the said notification alleging that the goods imported by the appellant do not fall under the scope of CTH 49019900/49011010 but classifiable under CTH 49119990, which is not included under Sl.No.302 of the said Notification. Therefore, it is essential to determine the appropriate classification of the imported technical documents. 12. The competing entries viz. 4901 & 4911 read as follows:- Chapter heading 4901 Tariff item Description Unit Rate of duty Preferential areas (1) (2) (3) (4) 4901 PRINTED BOOKS, BROCHURES, LEAFLETS AND SIMILAR PRINTED MATTER, WHETHER OR NOT IN SINGLE SHEETS whether or not folde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....10 as also "plan", 'drawing' and 'designs' as covered under Serial No. 15 of the concerned notification. Thereafter, their Lordships observed as follow:- 6. Let us first analyse as to the true grammatical meaning of the words included in Sl. No. 15 to wit : "plan, drawings and design", "Plan" in common acceptation means 'a drawing or diagram made by projections on horizontal plane'. The Law Lexicon attributes it to be a design or a sketch and is a draft or form of representation and its synonyms are sketch and design. Corpus Juris Secundum (Vol. 70) attributes a meaning in the similar vein as 'a draft or form or representation of a horizontal section of anything, as of machinery; a map ..... a scheme; a project; also a method of action, procedure, or arrangement. 7. The word 'drawing' in common acceptation however, mean and include 'art of representing by line, delineation without colour or with single colour' and Corpus Juris Secundum defines it as meaning a representation on a plane surface, by means of lines and shades. 8. The third expression viz., 'design' in popular parlance is used as a synonym with plan and includes a sketch. Some times i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aple Fibre. Even without adverting to the general trade parlance of the word 'book' and its known features, a plain look at the book itself denotes it to be a Installation and Planning Manual. The documents though loosely kept in a binder is known as Zimmer Documentation as regards the Fisher-Rosemount Systems. It is a technology transfer agreement which stands documented in a folder. The heading itself record "Installing CHIP Products and Application Software". The heading itself thus, indicative of not being a work of art by an author - it is a record of scientific progress achieved and this particular achievement is being transferred by way of Transfer of Technology Agreement between the two parties and thus, cannot but be termed to be a "technical know-how in the shape of a drawings, designs, charts, plans and other literature" - these items have been ascribed to be a part of the plant for the purposes of Depreciation Allowance in terms of Sections 32 and 43(3) of the Income-tax Act. Merely by reason of the factum of certain writings on various sheets of papers one cannot ascribe the documentation to be a 'book'. The word 'book' has not been defined in the Act but the 'book' in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....avail the benefit of Notification Nos. 107/93-Cus. and 38/94-Cus.?" 16. After analysing the Chapter Notes and HSN Notes of Chapter Heading 49.01 and 49.11, the relevant exemption Notifications, the three Judge Bench of the Hon'ble Apex Court proceeded to examine the two Bench judgment in the case of CC, New Delhi Vs. Parasrampuria Synthetics Ltd. (supra) and observed as follows:- 31. No doubt this Court in an appeal against the order passed by the Larger Bench reversed the decision of CEGAT. The question, however, is whether the order passed by a two Judge Bench in Parasrampuria Synthetics Ltd. lays down correct law on the point. Analysing the judgments of various courts and also the dictionary meaning of 'book', their Lordships observed as:- 50. In our opinion, the Counsel is right in submitting that when the expression 'book' is not defined in the Act, natural and ordinary meaning of the said expression must be kept in view. According to him, nowhere it is provided that all the nine characteristics or ingredients as highlighted by the learned Attorney General in Parasrampuria Synthetics Ltd. and referred to by this Court in paragraph 10 must be....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Synthetics Ltd. in the light of the observations made by us in this judgment and decide the issue raised in the instant case. Further, laying down the guidelines in arriving at the correct classification of the goods between Chapter 4901 and 4911, their Lordships observed as follows:- 54. The matter could be looked at from another angle also. As noted earlier, HSN has dealt with the point and as per Explanatory Note, it would fall under Chapter Heading 49.01. If it is so, it would not be covered by sub-heading 4911.99. 55. In this connection, we may refer to a three-Judge Bench decision of this Court in Collector of Central Excise, Shillong v. Wood Craft Products Ltd. - 1995 (77) E.L.T. 23 (S.C.) = (1995) 3 SCC 454. The Court, in that case, considered the question whether 'plywood' was classifiable under subheading 4408.90 or sub-heading 4410.90? HSN Explanatory Notes was considered by this Court and it was observed; "We are of the view that the Tribunal as well as the High Court fell into the error of overlooking the fact that the structure of the Central Excise Tariff is based on the internationally accepted nomenclature found in the HSN and, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ant statutory provisions of the Act and the Rules as also on the basis of decided cases on the point. As CEGAT has disposed of all the appeals merely on the basis of Larger Bench decision in Parasrampuria Synthetics Ltd. and has not considered rival contentions on merits nor recorded findings thereon, it would be appropriate and in the fitness of things to remit the matters to CEGAT, now to Customs, Excise and Service Tax Appellate Tribunal (CESTAT) to decide them on all points in accordance with law in the light of observations made in this judgment. 17. A plain reading of aforesaid observations of the Hon'ble Supreme Court, it is crystal clear that while deciding the classification of technical materials/literatures, drawings, designs, plans etc. as to whether the same would fall under the Chapter heading 49.01 or under 49.11, due emphasis should be given to HSN notes of relevant sub-headings; and also it should be borne in mind keeping in view the ratio of Three Bench decision in the case of Associated Cement Companies Ltd. Vs. CC [2001(128) ELT 21 (SC)] that the basic heading is 49.01 for printed books, brochures, leaflets and other printed matters, and 49.11 covers "o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng 49.09), and printed forms which require the insertion of certain additional information for completion (heading 49.11). (C) Textual matter in the form of sheets for binding in loose-leaf binders. The heading also covers: (1) Newspapers, journals and periodicals bound otherwise than in paper, and sets of newspapers, journals or periodicals comprising more than one number under a single cover, whether or not containing advertising material. (2) Bound picture books (other than children's picture books of heading 49.03). (3) A collection of printed reproductions of works of art, drawings, etc., with a relative text (for example, a biography of the artist), put up with numbered pages and forming a whole suitable for binding. (4) A pictorial supplement accompanying, and subsidiary to, a bound volume containing the relative text. Other pictorial publications are excluded and generally fall in heading 49.11. Subject to Chapter Note 3, the heading also excludes all publications essentially devoted to advertising (including tourist propaganda) and those which are published by or on behalf of a trader for publicity....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion in manuscript or typescript at the time of use but remain in this heading provided they are essentially printed matter (see Note 12 to Chapter 48). Thus, printed forms (e.g., magazine subscription forms), blank multi-coupon travel (e.g., air, rail and coach) tickets, circular letters, identity documents and cards and other articles printed with messages, notices, etc., requiring only the insertion of particulars (e.g., dates and names) are classified in this heading. Stock, share or bond certificates and similar documents of title and cheque forms, which also require completion and validation are, however, classified in heading 49.07. On the other hand, certain articles of stationery with printing which is merely incidental to their primary use for writing or typing are classified in Chapter 48 (see Note 12 to Chapter 48 and in particular the Explanatory Notes to headings 48.17 and 48.20). The heading includes the following in addition to the more obvious products: (1) Advertising matter (including posters), year books and similar publications devoted essentially to advertising, trade catalogues of all kinds (including book or music publishers' li....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ut-out sheets), playing cards and the like, and other printed games (Chapter 95). (h) Original engravings, prints and lithographs, of heading 97.02, that is, impressions produced directly, black and white or in colour, of one or of several plates wholly executed by hand by the artist irrespective of the process or of the material employed by him, but not including any mechanical photo-mechanical process. 19. A careful reading of the HSN Notes relevant to Chapter 49.01, it could be discerned that Clause (A) explains books and booklets consisting essentially of textual matter of any kind, and printed in any language or characters, including Braile or shorthand. What has included also explained in the said Clause. More particularly, Clause (B) explains brochures, pamphlets and leaflets, whether consisting of several sheets or reading matter fastened together (e.g. stapled), or of unfastened sheets, or even of single sheets. These include publications such as: shorter scientific theses and monographs, instruction notices, etc., issued by Government department or other bodies; the exclusions under it mentions printed cards bearing personal greetings, messages or announ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Act, 1985. 21. In Givo Ltd.'s case(supra), the question before the Tribunal was whether drawings, designs and technical documents classifying under Chapter heading 98.03 imported through courier, as part of the technical collaboration agreement meant for supply of plant and equipment be subjected to duty. In that context, analysing the collaboration agreement, the Tribunal held as follows:- 26. The drawings, designs and technical documents are no doubt goods being integrally connected with the plant and machinery and not classifiable under CTH 49.01. In the present case, those were inevitable necessity of the capital goods to come into existence. Inseparability of each other was their virtue. Therefore, it does not appeal to commonsense to treat the import consignment independent of plant and machinery to be called "book". The Tribunal considering the imported technical documents as part of the Plant of machinery held to be not as books. It has not examined the issue referring to the HSN notes on the competing entries and the principle laid down by the Supreme Court in remanding the case to the Tribunal in Gujarat Perstorp Electronics Ltd. (supra), hence....