TMI Blog2013 (3) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs dated 6-12-2010 relied upon by the customs in this case, without authority of law. - In favor of assessee. - W.P. (C) Nos. 4541 & 4351 of 2012 - - - Dated:- 8-8-2012 - S. Ravindra Bhat and R.V. Easwar, JJ. Shri Pradeep Jain and P.K. Mittal, Advocates, for the Petitioner. Shri B.V. Niren, CGSC with Prasouk Jain Piyush Kaushik, Advocates and Neeraj Chaudhari, CGSC, for the Respondent. [Order per : S. Ravindra Bhat, J. (Open Court)]. - Admit. 2. With consent of counsel for the parties matter was heard finally. 3. Counsel for the respondent seeks leave to place on record the counter affidavit. Leave granted. Counter affidavit is taken on record. 4. The writ petitioners are aggrieved by the action of the respondent-Customs authorities in determining the goods imported by them as classifiable under CTH 8506 10 00 as complete battery cell and subjecting them to full duty including the payment of applicable anti-dumping duty, along with interest. The brief facts of the petition in W.P. (C) 4541/2012 are that the petitioner manufactures dry battery cells and had imported the following articles :- Empty Zinc Tube (classifying under sub-headi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en to the customs authorities by application of rules to include such articles. 7. Counsel for the Customs contends in this case that the petitioners are importing nothing less than dry cell batteries. It is emphasized that each of the articles which has been imported is covered by the notification dated 13-4-2007 as an assembly of those would make a whole dry cell battery. Counsel further submitted that the process involved in putting together the raw material imported by the petitioners, is minimal and what in effect they seek to achieve is the import of dry cell itself. 8. The Customs relies upon Rule 2(a) of the General Rules for the Interpretation of the First Schedule of Customs Tariff Act, 1975 which lists out general rules for the interpretation of the Schedule. It is stated that in terms the insistence upon payment of anti-dumping duty is warranted having regard to the said Rule which reads as follows : 2. (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation of Injury) Rules, 1995, the Central Government, after considering the aforesaid final findings of the designated authority, read with the amendment dated the 29th March, 2007, hereby imposes on the subject goods, the description of which is specified in column (3) of the Table below, falling under heading of the First Schedule to the said Customs Tariff Act as specified in the corresponding entry in column (2), the specification of which is specified in column (4) of the said Table, originating in the countries as specified in the corresponding entry in column (5), exported from the country as specified in the corresponding entry in column (6), and produced by the producers as specified in the corresponding entry in column (7), exported by the exporters as specified in the corresponding entry in column (8), imported into India, an anti-dumping duty which shall be equal to difference between the amount mentioned in the corresponding entry in column (9) in the currency as specified in the corresponding entry in column (11) and as per unit of measurement as specified in the corresponding entry in column (10), of the said Table, and the landed value of such imported goods in lik ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the components of the copiers and the balance of 38 per cent was to be manufactured by them indigenously. According to the import policy this percentage of 62 per cent was to be reduced in the subsequent years. The import policy was not meant for such entrepreneurs who instead of importing 62 per cent of the components, imported 100 per cent of the components of a fully finished and complete goods manufactured by a foreign country. It is an admitted position that fully finished plain paper copiers were a prohibited item for import and thus the device adopted by the company in the present case was a complete fraud on the import policy itself. Apart from the above circumstances in our view the Tribunal was not right in setting aside the finding of the adjudicating authority and in taking the view that one has to look into the respective licence and not to the fact that if all the consignments covered by all the bills of entry assembled together, there will be a full and complete machinery. 13. In Phoenix International Ltd. (supra), the mode adopted by the importer, to escape higher levy of customs duty on import of shoes, was to pass off the independently imported compone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses payment of higher duty. If Rule 2(a) has to be understood in the light of those observations and furthermore in its own terms, what it really suggests that if an incomplete or unfinished article has the characteristic of a complete article that would be treated as such. In this case, the customs authorities no doubt rely upon para 13 of the order of the designated authority; the same reads as follows :- 13. As per claims of the Association, a number of producers in the unorganized sector also produce the subject goods and the individual size of these producers is too small. Production of these produces in unorganized sector was estimated by the domestic industry in the region of 5% of the production in the organized sector. The Authority notes that none of the producers in the unorganized sector have responded to the Authority and no published information is available with regard to production by these entities. It is also not known whether these entities undertake complete production activities, or are producing the product from semi-finished stage. Investigations at the premises of the domestic industry has shown that production of pre-mix powder is the basic manufacturing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by depressed pricing of goods i.e. dry cell batteries imported from China. Those goods were whole dry cells. The designated authority advisedly did not enter into any investigation as to the components and the likelihood of injury by importation of such components from China. Had such an exercise been undertaken and recommendations made to the concerned authority, the notification would have followed the same route. This Court is also alive to the fact that previous notifications which have extended anti-dumping duty to components and constituents had explicitly said so. (Refer Customs Notification No. 65/2003, dated 4-4-2003 and Notification No. 132/2009-Cus., dated 8-12-2009). Had the authorities intended that dry cell battery components of the kind imported by the petitioners in this case ought to be subjected to anti-dumping duty, (which is discriminatory in nature) that intention would have been expressed in the notification. Its absence renders the clarification made by the Central Board of Excise and Customs dated 6-12-2010 relied upon by the customs in this case, without authority of law. The petitions therefore have to succeed; the respondents are directed to process the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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