TMI Blog2003 (10) TMI 372X X X X Extracts X X X X X X X X Extracts X X X X ..... of the machine as stated but a fully assembled machine. After conducting investigation, notice was issued to the importer, Harish Kotlia, its President, the Rajnish Varma, its General Manager proposing confiscation of the goods under Clauses (d) and (m) of Section 111 of the Act, demanding duty on five such machines imported earlier and permitted to be cleared without payment of duty, penalty on the importer under Sections 112 and 114 of the Act. The Commissioner passed orders in October, 2001 confiscating the goods but permitting them to be redeemed on payment of fine, imposing penalties on the company and its two employees, demanding duty on past clearances and demanding interest. 2. Each of these appealed the order of the Commissioner. A bench of this Tribunal at Delhi which heard these appeals passed orders in March 2002 disposing of these appeals. The Tribunal noted that the point in issue was whether the imported goods were complete machines or components to be assembled by the importer into a complete machine which was to be exported. It said that the question was one of fact which could be verified on physical examination by the adjudicating authority as to whether the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e catalogue, the machine is described as Anaesthetic machine. However, it is also fitted with ventilator and breathing system forming the complete detachable unit. This is the unit which is separately packed and is not found attached with the machine. As per the catalogue and has been seen practically ventilator and breathing unit can be striped in seconds and is easy to clean, it is made of plastic. All the electrical and pneumatic connections to the compact breathing system such as fresh gas supply, driving gas, anaesthetic gas scavenging, sample gas return flow, flow sensor and pressure sensor are routed via a single interface. This means that the breathing system can be connected in one single operation, just insert it and it is ready for operation. The report of the officers goes on to say In our opinion the machine is complete, anaesthetic works station with ventilator and breathing system. By any stretch of imagination the goods cannot be considered as components of Artificial Lung Ventilator with Integrated Anaesthesia Unit. The parts which are not found attached with the machine and packed separately, are detachable and can be attached any time before making the machin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appliance for the first time and it can scarcely be equated with manufacturing activity. He says, It is difficult to resist the impression that the activity listed by the importer in the flow chart which are more or less in the Vaidya s report are mentioned in great detail mainly with a view to project that many tests/activities are required to be done. He says that points 11 to 16 relate to assembling of patient breathing system, vaporisation module, table unit, drawer assembly and various tubings. He goes on to say that the process involving connecting the power cord, switching on the system and switching off the system (refer to in points 18 to 22) cannot be considered to be manufacturing. He relies on the fact that many of the processes said to be shown to be manufacturing processes figure in the catalogue of the machine particularly in the instructions for their care. The catalogue indicates that for purposes of maintenance disinfection etc. all the parts mentioned above are required to be dismantled and then reassembled after disinfecting/cleaning/sterilizing etc. If these processes are to be regarded as manufacturing processes, it would lead to the absurd conclusion th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et up. If these processes, whether singularly or collectively are to be regarded as manufacturing processes or even as processes incidental or ancillary thereto, it would lead to the absurd conclusion that every time, the maintenance activities are conducted, the machine would have to be regarded as having undergone a manufacturing process. We do not find anything absurd in the claim that the assembly of parts or components into one machine can be considered to be manufacture. It is evident from the terminology that the Commissioner uses that he has applied the test of manufacture contained in Section 2(f) of the Central Excises Act, 1944. Even applying the test that has been evolved to determine whether there is a manufacture in terms of that section, it will be difficult to say that assembling of components of a machine into a complete machine is not manufacture. Manufacture is in fact defined in paragraph 3.31 of the relevant Import Policy to mean to make, produce, fabricate, assemble, process, or bring into existence, by hand or by machine, a new product having a distinctive name, character or use and shall include processes, such as refrigeration, repacking, polishing, label ..... X X X X Extracts X X X X X X X X Extracts X X X X
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