TMI Blog1989 (1) TMI 264X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of Central Excises and Salt Act, 1944. It was the case of the department that on the secret information that the appellants illegally imported 5000 pcs. of complete Vedio Cassettes in the name of M/s. Bharat Laxmi Trading Co. Ltd., Calcutta and M/s East Asia Skin Corpn., Calcutta in the guise of assembling of the component parts and also that they imported full Video Cassettes including jackets, catalogues, tapes fitted with spools, screws and leaflets which are required to make complete video cassettes, the office-cum-factory of the appellants was searched on 24-11-1984 resulting in recovery of 600 pcs. of Video Magnetic tapes valued at Rs. 60,000/-. The said goods as well as some incriminating documents which were found during the search were seized. Besides notices (detention orders) under Section 110 of the Customs Act, 1962 were also issued covering 5 cases of Video Cassettes without tapes lying at the godown of M/s Bengal Bond, Calcutta; 3 cases Video Cassettes tapes and 1 case of Video Magnetic tapes lying at the godown of M/s Kilburn Co., Calcutta and one case of Video Magnetic tapes and 300 pcs. of Video cassettes without tapes lying at the factory of the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c papers, 5000 stickers, 5000 pcs. catalogues marked AKAI Video Cassettes VE 18 made in Japan (i.e. a hub, 5 screws, 2 steel guides, one plastic jacket, one catalogue, one sticker, with one Video Cassette without tape) under importation through M/s East Asia Skin Corpn. under line Nos. 73 75 and case Nos. 1 to 10 ex. M.V. Oriental Crown, Imp. Rot. No. 349/84. Accordingly they imported 5000 pcs. Video Magnetic tapes through M/s Bharat Laxmi Trading Co. Ltd., under Line Nos. 72 74 and case Nos. 11 to 14 ex. M.V. Oriental Crown, Imp. Rot. No. 349/84. All the components parts including the screws, catalogue and all other accessories required for making complete Video Cassettes without any indigenous parts whatsoever were imported by M/s Micro Electronics. The declared weights of 5 cases of Video Cassette without tape were 140 kgs. Gross and 100 kgs nett., whereas the ascertained weight of 1 case was 110 kgs. Nett only. Accordingly, the ascertained weight of 10 cases of Video Cassettes without tape is 1100 kgs. Against the declared weight of 200 kgs. M/s Micro Electronics in connivance with the alleged importers M/s. Bharat Laxmi Trading Co. Ltd. And M/s. East Asia Skin Corpn. impor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the importation of the 4 consignments out of which 2 consignments were cleared for home consumption under Section 47 of the Customs Act. Likewise in respect of the third consignment the Bill of Entry was assessed on October 19,1984 and the goods covering the said Bill of Entry were thereafter removed to the Bengal Bonded Warehouse, Calcutta. On these established facts Shri V. Shridharan submitted that once the goods were so cleared under Section 47 of the Customs Act there was no scope for issuing a show cause notice. As such a step would amount to revision of the order passed under Section 47 which can only be done under Section 130 of the Customs Act. To buttress his arguments he cited the leading case of Jain Shudh Vanaspati Ltd. v. Union of India, 1982 E.L.T. 43 (Del.) wherein it was held that the order passed under Section 47 of the Customs Act attains finality and once the goods are cleared by the Customs Authorities after physical verification and check-up under Section 47 of the Customs Act, issuing of show cause notices for confiscating or imposing the penalty amounts to reviewing of the Order under Section 47 of the Customs Act. However, the Delhi High Court itself has c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for confiscation. In Assistant Collector, Customs v. U.I. Minerals Ltd., supra it was held that clearance under Section 51 of the Customs Act cannot exonerate the exporter from penal proceedings under Section 114 of the Customs Act. In Euresian Equipments Chemicals v. Collector of Customs, supra it was held that an order by the proper officer permitting clearance and loading of the goods under Section 51 of the Customs Act does not ex-clude the applicability of Sections 113 114 of the Customs Act as the export goods incur the liability to confiscation under Section 113 of the said Act. 7. We have considered the arguments. In the instant case a show cause notice was issued to the appellants inter-alia alleging that the appellants were guilty of mis-declaration, mis-representation of facts and also for defrauding the Government and ultimately these charges were found established by the Adjudicating Authority vide his impugned order. Thus applying the exception carved out by the Hon ble Delhi High Court in the case of Jain Shudh Vanaspati Ltd. v. Union of India, supra we hold that no exception can be taken for issuing the show cause notice for confiscating and imposing the pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted under the 4 different consignments were spares and, therefore, were validly imported in terms of para 186(9) of the Import Export Policy April, 1983-March, 1984 and all these 4 consignments should have viewed separately and as they were spares they could not be said to constitute as complete video cassettes as done by the Adjudicating Authority and drew our attention to the findings recorded by the Adjudicating Authority in para 17 which runs thus - (17) Goods imported under the four consignments are nothing but complete video cassettes in S.K.D. condition and hence the same are not spare parts as defined in Chapter-2 under Serial No. 1 of the Import Policy, and hence the assessment under the aforesaid goods under serial No. 186(9) of the Policy was erroneous. Thus the 2nd shipment was seized alongwith other goods wrongly classified and/or cleared by M/s Micro Electronics or others. 10. Stretching the contention further he cited the case of Union of India v. Tarachand Gupta Bros., 1983 E.L.T. 1456(SC) = AIR 1971 SC 1558 wherein it was held that the mere fact that the goods imported were so complete that when put together would make them motor cycles and scooters i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of component parts in convenient lots which, by clubbing would give a complete article in SKD or CKD condition. This is what happens under a screw driver technology where a local manufacturer does not add any indigeneous parts whatsoever. But we cannot understand import of complete articles in CKD/SKD condition for servicing, replacement/repair market. For replacement and repairs, the particular part or parts which go bad have only to be substituted by new spares. There is no question of substituting the complete article by a new one. That would not be a case of repairs and a complete article imported cannot be called spare part . Thus, while the analogy of Tara Chand s case, supra may be applicable to cases of import of parts or component parts by actual users/manufacturer, the same analogy would not appear to hold good for import licence for Spares . For the same reasons the case of Collector of Customs v. Mitsuny Electronic Works, supra is also not apt to the present case. After rejecting the said contention we now proceed to examine as to whether the imported goods were spares and, therefore, permissible under paragraph 186(9) of the said policy. 13. From the impugned ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order. 15. We have considered the arguments. The import of spares of the items falling under certain Heading Nos. of Schedule I to the Imports (Control) Order, 1955 was permissible at the relevant time in terms of para 186(9) of the aforesaid Policy subject to the restrictions that items appearing in the Appendices 3,6,8,15 and 30 shall not be allowed. The said para reads as follows :- (9) Additional Licences will also be valid for import of spares of the items falling under following Heading Nos. of Schedule I to the Imports (Control) Order, 1955 :- 84.12 84.51 85.18 84.15 84.52 85.19 84.22 85.53 85.20 84.24 84.54 85.23 84.25 85.06 85.24 84.32 85.07 87.01 84.33 85.08 87.02 84.35 85.09 87.03 84.41 85.12 Chapter 90 84.47 85.15 Chapter 91 Chapter 92 The import of these spares shall be subjected to the condition that (i) the c.i.f. value of the spares imported shall in all not exceed Rs. two lakhs per Export House, within the value of the Additional Lic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and stickers Shri V. Sridharan contended that the same are always supplied by the foreign suppliers along with plastic cases without any extra charge. He also submitted that the screws are also covered under the description video cassette (c-o) without tape and parts thereof. To support his contention he relied upon the clarification given by the Chief Controller of Imports Exports in his letter dated 17th Dec., 1982 containing clarification of itemwise Import Policy for 1982-83. He further submitted that stickers/steel guide rollers/catalogues are also supplied free by the Foreign Suppliers and there was no question of any separate import thereof. Likewise he also submitted that plastic jackets are supplied without any extra charge with the video cassettes without tape (c-o). We have considered the submissions. As regards screws the Adjudicating Authority had held that the same could not be imported in terms of para 186(9) of the said Policy because screws will attract Sl. No. 509 which speaks of Mild steel wood screws/machine screws . Likewise jackets imported along with empty video cassettes fall under the category of packing materials under Chapter 17 Sl. No. 138(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the correct assessable value." 21. Attacking the aforesaid demand of duty Shri V. Sridharan submitted that the Adjudicating Authority erred in holding that the value of the complete video cassettes has to be taken as Rs. 75/- per piece. Because, there was no import of complete video cassettes in the instant case and there was or could be no question of the value of the imported goods being determined on the basis of the value of complete video cassettes. Further in any event nothing whatsoever has been stated in the impugned order as to how and on what basis the said value of Rs. 75/- per piece has been sought to be taken and adopted by him and therefore the valuation made by the Adjudicating Authority is only arbitrary and illegal. During the pendency of the appeal the appellants moved an application to produce certain invoices (listed at Sl. Nos. 41, 43, 44, 49, 50, 51 and 52 of the paper book) evidencing purchase of video cassettes without tapes to indicate the prices at which video cassettes without tapes were being sold in the course of international trade and sought out permission to produce the same by way of additional evidence. In the application for seeking permission ..... X X X X Extracts X X X X X X X X Extracts X X X X
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