2000 (3) TMI 239 - AT - Customs

Summary

Issues Involved:
1. Classification of imported centrifugal gas compressors and propylene gas compressor packages under the Customs Tariff.
2. Applicability of Open General Licence (OGL) for importation under the Import Trade Control (ITC) Policy.
3. Confiscation of goods under Sections 111(d) and 111(m) of the Customs Act, 1962.
4. Registration of goods under Project Imports.

Issue-wise Detailed Analysis:

1. Classification of Imported Goods:
The primary issue involved the classification of centrifugal gas compressors and propylene gas compressor packages imported by RPL. The importers classified the goods under sub-heading 8414.59, claiming benefits under Notification No. 59/87-Cus. However, Customs officers reclassified the goods under sub-heading 8414.30, arguing that the compressors used refrigerant gas for cooling, thus falling under refrigeration and air-conditioning compressors. The Collector of Customs upheld the Customs' classification under 8414.30, leading to a significant differential duty demand.

2. Applicability of OGL:
RPL claimed the goods merited import under OGL as capital goods under entry 20(2) of Appendix 1 Part B of the ITC Policy. Customs officers contested this, citing specific nomenclature under entry 515 of Appendix 3, Part A, which covered "compressors of refrigeration and air-conditioning all types." The Collector held that both classifications could cover the goods but accepted the importers' plea that the goods were capital goods, thus falling under OGL. This decision negated the charges of confiscation under Sections 111(d) and 111(m).

3. Confiscation under Sections 111(d) and 111(m):
The show cause notices issued demanded differential duty and sought confiscation under Sections 111(d) and 111(m) of the Customs Act, 1962, alleging misdeclaration of the goods. The Collector's decision that the goods were capital goods and permissible under OGL led to the failure of confiscation charges. This conclusion was upheld by the Tribunal, agreeing that the goods were integral components in the manufacturing process, thus qualifying as capital goods.

4. Registration under Project Imports:
Subsequent to the show cause notice, RPL sought to register the goods under Project Imports. The Collector observed that this issue was not part of the show cause notice but examined it due to its consequential nature. He directed provisional registration under Heading 98.01, subject to final DGTD decision. The Tribunal found that the Collector exceeded his jurisdiction by addressing issues beyond the show cause notice, specifically the registration under Project Imports.

Conclusion:
The Tribunal upheld the Collector's decision regarding the classification under ITC and the applicability of OGL, thereby negating the confiscation charges. However, it set aside the Collector's orders related to the registration under Project Imports, as these were beyond the scope of the show cause notice. The appeal was decided in these terms, maintaining the classification and OGL applicability while invalidating the Project Imports registration directive.