TMI Blog1987 (2) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... Nat . Benefit of the Notification was extended to the Finishing Press because the product manufactured by it was considered to be a Nut (without threading). 2. Aggrieved, the appellants filed an appeal before the Collector of Customs (Appeals). The Collector rejected the appeal observing as follows:- I have carefully considered the submission of the appellants both written and oral, as well as the records of the case. The dispute in this case is regarding applicability or otherwise of the benefit of Notification No. 40 Cus dated 1.3.78 to the goods imported. The appellants have pleaded that they had imported two machines - one blanking press and one finishing press - both of which are essentially required in the manufacture of nuts for installation in their own factory as multi-station nut making machines. They have further explained that these two machines, between themselves work seven stages from raw material stage to the finishing blank stage automatically in their nut making unit while the blanking press works the first five stages, the finishing press works the final two stages. But contrary to their expectation the blanking press-was not allowed the benefit of Notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chine which was split up into two parts, namely B.P. and Finishing Press. He explained that the BP produces blanks (for nuts), in five stages, which are semi-processed nuts, and the Finishing Press processes these in two stages, i.e., the blanks are produced which are finished and completed in all respects except threading. He argued that these two machines are fully integrated and are, for all purposes, only one machine intended to produce nut blanks. The seven steps of processing/manufacture are performed by the two machines together. 4. The learned Counsel further argued that a nut-blank comes into existence after sizing, which is a process done by the BP. 5. Shri B.B. Gujral further argued that Notification No. 40/78-Cus. gave partial exemption to automatic multi-station bolt or nut making machine (Serial No. 12 of the Table) . He invited our attention to the import Policy for April 81 - March 82 and, particularly, to Appendix-2 (List of capital goods allowed under OGL Serial No. 41), where OGL was extended to automatic multi-station bolt/nut making machine . Shri Gujral argued that the Customs having extended the facility of OGL to the goods, there was an explicit accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted, Shri Gujral placed reliance on a judgment in the matter of K. Mohan And Company, Bombay v. Collector of Customs, Madras , reported in 1984 (15) E.L.T. 430 , In support of his further argument, that technical evidence like Manufacturer s Certificate, should be accepted and due regard paid to that, Shri Gujral cited 1984 E.C.R. 1086 and 1986 (6) E.C.R. 334 . 8. Shri J. Gopinath, the learned S.D.R., submitted that the facts of the matter are not in dispute and also agreed that in the Bill of Entry, there was only one item mentioned. He pointed out that the goods were classified under H. 84.45/48 of the CTA, and there is no dispute regarding the classification. The dispute is only regarding applicability of Notification No. 40/78-Cus.to the present goods. 9. Shri Gopinath submitted that, for purposes of this Notification the imported goods should be automatic; they should be multi-station; and they should be nut making machines. He emphasised that according to the Notification, the imported goods should be a machine , that is to say, a single machine. Explaining the terms used in the Notification, Shri Gopinath submitted that the word automatic would mean without human ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Hemraj Gordhandas v. H.H. Dave, Assistant Collector of Central Excise Customs, Surat and Others. (ii) 1981 E.L.T. 128(Bom.) M/s. Jenson And Nicholson (India) Ltd. v. Union of India and Others. (iii) 1983 E.L.T. 345(Mad.) M/s. Indian Organic Chemicals Ltd. v. Union of India and Others. (iv) 1983 E.L.T. 345(Mad.) Witco Match Works, Kalugumalai And Another v. Union of India and Others. 14. Referring to the order of the Tribunal in the case of M/s. Zunesh India Enterprises (supra), Shri Gopinath submitted that, in that appeal, the question was whether the imported goods could be considered as a nut-making machine when threading was not done. The Tribunal held, in view of the evidence produced, that even if there was no threading, the imported machine could be called a nut making machine . Therefore, according to him, the ratio of the judgment is not applicable to the facts of the present case. Referring to the Government of India decision cited by the learned Counsel for the appellants, Shri Gopinath submitted that this decision can have only a persuasive value and is not binding on the Tribunal. 15. Shri Gujral, the learned Counsel, in his rejoinder, argued t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere were two machines, namely, Blanking Press and Finishing Press . There are five processes undertaken in the Blanking Press, i.e. (a) flattening, (b) indenting, (c) cutoff, (d) chamfering, and (e) planishing, and two processes in the Finishing Press, namely, (a) calibrating, and (b) piercing. It is also admitted that at the end of the seventh process, nut blank, which is ready for threading, comes into existence. [The learned Counsel for the appellants argued that a nut blank comes into existence after sizing by the Blanking Press; we shall be dealing with this argument elsewhere.] The threading of this blank is done by another machine with which are not concerned as it is not the case of the Revenue that the absence of threading is a reason in favour of the Revenue. It is also admitted that both the machines have been ordered by a single order, dispatched under a single consignment and invoiced accordingly. 18. The question before us is whether the imported goods are entitled to the exemption of the Notification in view of these facts. We have considered the argument of the learned Counsel for the appellants that the Customs have considered the imported goods as automatic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the machine before us). The concessional assessment under Notification No. 40/78 (the same notification as is before us) was denied on the ground that the machine imported was not a nut making machine but only a nut forming machine . It was argued before the Tribunal that, technologically, a machine which could perform all the functions including threading did not exist. The Bench thereafter held that the machine imported was a multi-station not making machine even though threading was not done by this machine. This order does not show that the importation was in two parts as is the case here. The issues before the Bench were different. The ratio of the Tribunal s judgment does not, therefore, apply to the present appeal. 22. The Tribunal s order No. 868 869/84-B dated 30.11.84 (supra) was also perused by us. The question before the Bench was whether the imported, machines, referred to in the appeal, were designed for all operations indicated in Notification No. 49/78-Cus. The Tribunal, agreeing with the Appellate Collector, held that to decide the classification, what is important is to see whether the essential functions referred to in Serial No. 9 of the Notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not as if the Exemption Notification referred to a machine which does not exist. 25. We note, with approval, Shri Gopinath s argument that the three qualifications, for an imported machine to qualify for the Notification, are that - (1) it should be automatic; (2) it should be multi-station; and that (3) it should be a nut-making machine. The language of the notification clearly shows that what is imported should be a machine . We do not agree that we should equate the two imported machines, to a machine or to machinery . 26. During the course of hearing, it came out that when the Blanking Press finishes the five processes, the nuts are manually moved to the Finishing Press for the final two operations. The machine, by requirement of the notification, should be automatic. The fact that manual interference has to be there between the final product of the Blanking Press and the first stage of the Finishing Press, shows that the operations, are not fully automatic. The learned Counsel s argument, that it is the process that should be automatic and not the movement, is not acceptable because in a fully-automatic machine, raw-material is inserted at one end and the finished p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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