TaxTMI 
TaxTMI 
2014 (1) TMI 1706
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....indigenous/local manufacture of such machines out of imported, locally purchased and manufactured components/parts of such machines. In October, 2008, the appellants started the activity of manufacturing of PIMM at Thane. The said factory premises consists of 20,000 sq. ft. area with investment of about Rs. 2 crores. The machines installed in the factory are - (a) Computer numerically controlled metal cutting, metal grinding machines (b) lathes, drilling machines, (c) material handling equipment and cranes, (d) EDM machine for sparking of steels, (e) air compressor, (f) oil cleaning equipment & (g) DG sets. 3. As initially the appellants were importing the complete PIMM from China but by the introduction of Notification No. 39/2010-Cus., dated 23-3-2010 Anti-Dumping Duty (ADD for short) on plastic processing injection moulding machines originating in or exported from China was imposed, therefore, the Revenue was of the view that the as the appellants are importing PIMM from China initially and to ....
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....2004 (168) E.L.T. 164, Delta Electronics P. Ltd. v. CC - 2012 (283) E.L.T. 68, CC v. Ratan Melting & Wire Industries - 2008 (231) E.L.T. 22 = 2008 (12) S.T.R. 416 (S.C.), Anchor Daewoo Inds. Ltd. v. CC - 2007 (214) E.L.T. 230, Board's Circular No. 528/53/2007-Cus. (TRU), dated 25-10-2007 and Board's Circular No. 43/2010-Cus., dated 6-12-2010. In alternate, he submitted that even if it is presumed that the machines are imported in CKD/SKD condition, then also the Notification imposing ADD is not applicable to the appellants as the Notifications imposing ADD clearly states that "complete component or parts thereof in SKD condition". In this case, ADD is leviable only on complete machines i.e. plastic processing or injection moulding machines, not part thereof or machines imported in SKD/CKD condition. Therefore, as per the decision in the case of Anchor Daewoo Inds. Ltd. supra, the provisions of the Notifications are not applicable to the facts of this case. He also relied on the decision in the case of CC v. Sony India Ltd. - 2008 (231) E.L.T. 385. Therefore, he prayed that the impugned order is to be set aside and the appeals be allowed. 5. On the other hand, Shri Amand Shah,....
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....23-3-2010. Revenue has also relied on the statement of Shri Devdas Birendra Kumar Roychowdhury, CEO Technology of the appellants and in his statement he has stated that the appellants are importing substantial and essential parts of machines and assembling sub-assemblies in the machines with the help of employed technical know-how and by adding few locally procured/manufactured parts. We find that in his statement he has also stated that they add Taiwanese controller and locally procured barrel heaters, valves, hoses, etc., in assembling the machines. Although, the components/parts imported by the appellants are substantial parts of PIMM but without the indigenously procured parts such as barrel heaters, valves, barrel heaters, hoses, etc., and electrical panels imported from Taiwan and assembling the same altogether, PIMM is not functional. The issue whether Rule 2(a) of the General Rules for Interpretation of the First Schedule of the Customs Tariff Act, 1975, is applicable to the facts of the case is to be examined in view of the various judicial pronouncements of this Tribunal as well as of superior courts. In the case of Philips India Ltd. (supra) this Tribunal has observed th....
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....hapter 85. But this will not be enough to bring it within the sweep of the notification unless the article is a Compact Fluorescent Lamp (with or without choke) as is commonly understood in the related trade or market. The article proposed to be imported by the applicant is evidently not CFL though may be classifiable under Chapter 85 of the First Schedule to the Customs Tariff Act. The notification in question nowhere stipulates that the expression "Compact Fluorescent Lamps falling under Chapter 85" (without or with choke) would include incomplete CFLs falling under Chapter 85 if they have acquired the essential character of the complete CFLs (without or with choke) to attract the imposition of anti-dumping duty. As has been observed by the Hon'ble Supreme Court : "The intention of the legislature in a taxation statute is to be gathered from the language of the provisions particularly where the language is plain and unambiguous. In a taxing Act it is not possible to assume any intention or governing purpose of the statute more than what is stated in the plain language. It is not the economic results sought to be obtained by making the provision which is relevant in interpreting a....
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....le as well as CKD/SKD parts of the article it has issued relevant notifications which clearly state the applicability of the notification imposing ADD on the article as well as CKD/SKD parts of the article. Examples of such notifications are Notfn. Nos. 55/2009, 139/2002, 132/2009 and 125/2010. In the present case, Notification No. 39/2010, dated 23-3-2010 issued for imposing ADD only on injection moulding machines from 40T to 1000T from China and there is no mention of ADD on SKD/CKD parts of the same, therefore, the notification cannot be held to be applicable to import of incomplete machine or CKD/SKD parts of the same. 11. We further find that in the impugned order the ld. Commissioner relied on the C.B.E. & C. Circular No. 43/2010. The circular has been issued on 6-2-2010 which states that anti-dumping duty is to be levied on any article in CKD/SKD condition either in together or in part shipments. The circular cannot override and prevail over the decisions of the High Court and the Tribunal, as laid down by the Apex Court in the case of CC v. Ratan Melting and Wire Industries. Apart from that, in the present case, all the imports have taken place before 4-9-2010 and the....
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....s procured substantial parts from China and they have only assembled in their factory. In this case, we find that the appellants have set up a factory and in that factory they have installed certain machineries for assembling, cutting and manufacturing certain parts from indigenously procured inputs and certain parts which the appellants are importing from Taiwan and some essential parts they import from China for assembling a complete PIMM. We also note that the appellants are registered with the Central Excise Department and all the assembled machines are being cleared by them on payment of Central Excise duty. In these circumstances, we have no hesitation to hold that the appellants are not having any intention to evade payment of ADD. Therefore, we hold that as the appellants have imported substantial parts of PIMM and certain parts imported from Taiwan and certain parts procured indigenously and all the parts were assembled in their factory to manufacture a complete PIMM, the provisions of Rule 2(a) ibid are not applicable to the facts of the present case in the light of the various judicial pronouncements discussed hereinabove. Therefore, we hold that the appellants are not l....
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....scription/Qty. Goods found on examination Date of examination Date of seizure Assess-able value as per B/E Seizure value i ii iii iv v vi vii viii ix 1 907417 20-10-2010 TE-IN 100916P9 22-9-2010 Machine Parts : Injection casting weldments - 1 set Injection Units/8 sets. Each set bearing markings as - (i) TRX650, 9046 (ii) TRX650, 9086 (iii) TRX650, 9087 (iv) TRX230V, 5A329 (v) TRX230V, 5A328 (iv) 2-11-2010 12-11-2010 2141604 27300000 2 907514 20-10-2010 TE-IN 100916P8 22-9-2010 Machine Parts : Door Panel, covers, screw barrel & accessories - 1 set TRX230V, 5A320 (vii) TRX188V, 3A477 (viii) TRX188V, 3A476 Clamping units/8 sets. Each set bearing markings as above. 3 sets of base Units 921120 3 920735 27-10-2010 TE-IN 100916P3 22-9-2010 Machine Parts : Drilled & Welded steel plate for machine frame - 1 set (declared as welded steel plates) for PMM model No. TRX650 fitted with motors (2 nos.), heat exchanger, platform, loose bolts, screws, cables and 3 1373989 4 920737 27-10-2010 TE-IN 100916P1 22-9-2010 Machine Parts : Welded Steel Pla....
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....ntrol panel with switches (ready to fix connectors, circuit breakers, fans, cables, adaptors), Centralised Lubrication set (ltr capacity flow 0.25 ltr min), Solenoid Valves, 759924 Screw Barrel - 4 Nos. Machine Parts : Door Panel and Cylinder, 4 Sets Air Filters, Hydraulic Flow blocks - REXROTH, Hydraulic Transmission Control Valves - CRG-03-05-20 Mfg. No. JE 060 50 013 HRS 12 965128 22-11-2010 HTCHEN 1009100-2 29-9-2010 Machine Parts : Bed Platen, Clamp Cylinder, RAM - 4 PAC 4 Nos. of Injection units - REXROTH, with 4 Nos. of Screw Barrel, door Panel of PMM with assemblies, 3 Nos. of Motors (Suzhon Light Indl. Motor Factory), 4 sets of Hopper, 4 Nos. of Valves, 4 Nos. of Pumps, Hose pipes, heater elements, pipes, piston cylinder, Platon with toggle pins (large casing element) 25-11-2010 2063380 4 sets of Clamping Units with fittings, elements. One of the said four clamping units found with markings 1100SX - Rexroth - Mould thickness Max 780mm Min 250mm. 13 880927 6-10-2010 HTCHEN 1008010-2 3-9-2010....
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....mported. However, on perusal of column v of the above table, it can be seen that the base units with inbuilt hydraulic oil tanks and fitted with electronic heat exchangers, hydraulic parts, electronic cables/wires and other items such as doors panels, covers, screw barrels, glass panes were found on physical examination. Further it can also be seen that injection units and clamping units (declared as injection, weldments/clamping weldments) were found fitted with essential fitments and fixtures like electronic and hydraulic parts in fully finished condition and carefully bagged and hardly having any scope for processing with regard to their functionality. It is also the case of the department that major sub-assemblies were found to be affixed with labels bearing model of Chinese PIMMs viz. TRX650, 230, 188 which is also revealed from column v which gives details of the goods found on examination. Further, photographs of the said sub-assemblies were taken which confirm the aforesaid observations. These photographs were also shown to the appellant No. 2 who in his statement dated 11-4-2011 identified the sub-assemblies as described in column v of the table above. Accordingly, the afo....
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....y e-mail and she was receiving copies of original invoices, packing lists, bills of lading, etc., from the supplier through e-mail prior to shipment of goods and she was amending the original invoices, packing lists, bills of lading, etc., as per the directions of Shri Anit Asthana appellant No. 2 and these amended portions were shown in red colour (so as to make it noticeable to supplier). The amendments in invoice, packing lists and bills of lading were made with regard to description, quantity, weight, value, etc.; that the amended documents were then forwarded to overseas supplier through e-mail. The overseas supplier was sending back new invoices, packing lists and bills of lading, etc., as per the amendments made by her in red colour as directed by Shri Asthana (appellant No. 2) and that such amended invoices, packing lists and bills of lading were sent to the said CHA firm for clearance of goods at Nhava Sheva port. 17.1 The above evidences and statements are further corroborated by the following documentary evidences recovered from the appellants : i. E-mails of Shri Gopal S. Aggarwal : The e-mails of Shri Gopal sent to the suppli....
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....p; The mail reads as - "pls find amendments and remarks in red color." 17.2 This e-mail establishes the receipt of original import documents from the supplier and re-sending of those documents to the supplier after due amendments as mentioned in her statements. Further the said emails of Shri Gopal S. Aggarwal clearly reveals that the appellants placed orders and negotiated for supply of various specific models of PIMM with Tederic, the Chinese supplier, which were later exactly correlated with the specific models of machines manufactured by Tederic. 17.3 So far as the contention of the appellant with regards to the amendments in red colour in the emails that the Chinese are not able to understand English therefore they had to be advised on how to prepare an invoice. It is surprising that the Chinese do not understand English only where such amendments are carried out in the Bill of Lading. iii. Proforma Invoices : DRI had also recovered copies of Proforma Invoices issued by M/s. Tederic Machinery Manufacture (China) Co. Ltd., to the appellant for supply of 8 PIMM of specific models at total price of US $ 3,46,166 which establi....
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....d statements recorded under Section 108 of CA, 62 reveal that the machines were imported in SKD condition. Further I find that the appellants were also aware that ADD had been introduced on PIMM, thereby they manipulated the invoices, packing lists and other documents, thus, they created a device/subterfuge to show that only parts of the machines were imported to evade anti-dumping duty. Once the case is seen in its entirety, the Hon'ble Supreme Court's decision in the case of Phoenix International Ltd. supra, is squarely applicable to it. Similarly, the case laws relied upon by the appellants are also not relevant to the present case. In these circumstances, I do not find any infirmity in the impugned order-in-original. The same is upheld in toto and the appeals are dismissed. Sd/- (S.K. Gaule) Member (Technical) DIFFERENCE OF OPINION The following difference of opinion has arisen between the Members :- (a) In the facts and circumstances of the case whether the Member (Technical) is correct holding that the appellants have imported PIMM in SKD condition or Member (Judicial) is correct holding that the appellants have imported substantial parts ....
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.... Plaza Lamps and Tubes Ltd. (supra), Permalite Electricals Pvt. Ltd. (supra), Delta Electronics P. Ltd. (supra), Anchor Daewoo Inds Ltd. (supra) and Sony India Ltd. (supra) are applicable to the facts of this case as Member (Judicial) has relied or are not relevant to the facts of the case as Member (Technical) observed? 22. The arguments of the appellants can be summarized as follows : 22.1 The Plastic Injection Moulding Machines (PIMM) consists of Five sub-assemblies/sub-systems, namely, injection unit, hydraulic unit, clamping unit, electrical and controller unit and base unit and if any one of these units is absent it will not be a complete unit. Reliance is placed on the literature published by the manufacturer, M/s. Tat Ming Technology Company Ltd. and "A Guide to Injection Moulding of Plastics" by Prabodh C. Bolur, 3rd Edition. The consignment imported from China by the appellant would make up three to four of sub-assemblies mentioned above and the electrical unit/controller unit and some of the parts of the hydraulic unit were to be manufactured locally from the parts imported from Taiwan or locally procured. 22.2 Comparison of the values of goods presentl....
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....ted supra). It is also contended that wherever anti-dumping duty is sought to be levied on goods in CKD or SKD condition, the concerned notification has provided for the same expressly. It is further argued that provisions to deal with circumvention of anti-dumping duty by import of unassembled, unfinished or incomplete articles were introduced by way of Rules 25, 26 & 27 by Notification No. 6/2012-Cus. (N.T.), dated 19-10-2012 and the said notification also envisages a situation where the value addition on account of processes undertaken in India is less than 35%. In view of the above, it is argued that the appellant is not liable to anti-dumping duty on the imports made by them. 23. The ld. AR appearing for the Revenue made the following submissions :- 23.1 The appellant resorted to change in the form of import of PIMM from complete machine to machine in SKD condition, since May, 2009 onwards when the anti-dumping notification came into effect. From the evidence available on records, the dismantling of the complete machine into various parts imported from China before export at the insistence of RASA Technology (appellant) and also payment of charges separately for th....
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.... said notification, the designated authority, the Directorate General of anti-dumping, vide Notification No. 14/12/2008-DGAD, dated 10-2-2009 published its preliminary findings in the matter of import of processing or injection moulding machine also known as injection moulding machines having clamping force not less than 40 tons originating in or exported from the People's Republic of China, had recommended imposition of provisional anti-dumping duty on all imports of subject goods originating in or exported from the subject country. Thereafter, vide Notification No. 1/12/2008-DGAD, dated 31-12-2009, the final findings of the designated authority was published and in the final findings, the designated authority had recommended imposition of definitive anti-dumping duty on imports of the subject goods originating in, or exported from, the subject country. In pursuance to the said recommendations, the Central Government, in exercise of powers conferred under Section 9A of the Customs Tariff Act, read with Rules 18 & 20 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 imposed anti-dump....
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....ssential character of a complete or finished article, it would be covered by the heading pertaining to the complete or finished article. The second part of the Rule makes it clear that the reference would also include to the article presented unassembled or disassembled. Thus, for the purpose of Customs classification, these Rules would apply and if by applying these Rules, the imported goods become classifiable under 8477 10 00, the provisions of anti-dumping notification would apply. It is in this premise and context, the arguments made by both the sides require to be considered. 24.5 The first contention of the appellant is that the PIMM imported by the appellant was not complete as in some cases it did not contain the electrical unit or controller unit. That by itself will not take the imports out of the purview of the anti-dumping duty, if otherwise the goods under importation as presented has the essential character of the complete article. From the statements of Shri Sandeep Waman Naik, in-charge of the factory dated 22-10-2010, it is evident that the appellant was importing complete PIMM for trading prior to May, 2009 and after imposition of anti-dumping duty in May, ....
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....ete machine, anti-dumping duty would be leviable on the said goods, in terms of the notification issued under Section 9A. 24.6 As regards the argument that Rule 2(a) of the General Rules of Interpretation is not applicable to anti-dumping duty is devoid of merits. Anti-dumping duty is levied on articles dumped into country of the description specified in the notification and falling under the corresponding Tariff Items mentioned against them. Section 9A forms part of the Customs Tariff Act and therefore, the Rules of Interpretation, which is an integral part of the Schedule to the Customs Tariff Act would apply in respect of the levy under Section 9A as well. Further as per Rule 2(g) of the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, the expression "article" has the meaning assigned to it in the Customs Tariff Act, 1975. Rule 2(a) of the General Rules of Interpretation which is an integral part of the said Act defines the meaning of the term "article". Thus as per the statutory provisions relating to ADD, the said levy would apply not only to complete articles but also to incom....
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.... section or chapter notes. Therefore, once the heading or sub-heading of an article is specified for levy of ADD, the full scope of the entry has to be considered for the said levy. In the case before us, the levy is in respect of PIMM falling under 8477 10 00; the notification does not stipulate that the product imported should be complete in all respects and therefore, the ratio of the said decision would not apply in the facts of the present case. Permalite Electricals (P) Ltd. case is a decision of authority for advanced ruling and as is well known, the said decision is applicable only in respect of parties involved, i.e., between Permalite Electricals (P) Ltd. and the Commissioner of Customs concerned and hence the said decision has no application or relevance to the parties before us in the present case. Similarly, in the Plaza Lamps and Tubes Ltd. case, the said decision was based on the decision of this Tribunal in the Philips India case. As already noted Philips India case is distinguishable on facts; it, therefore, follows that the ratio of Plaza Lamps and Tubes Ltd. would not apply. As regards the Delta Electronics case, the levy was on complete, ready to use CFL wherein....
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....ave become locus classicus : "Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect, in deciding such cases, one should avoid the temptation to decide cases (as said by Cordozo) by matching the colour of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive." "Precedent should be followed only so far as it marks the path of justice, but you must cut the dead wood and trim off the side branches else you will find yourself lost in thickets and branches. My plea is to keep the path to justice clear of obstructions which could impede it." In my considered view, the facts obtaining in the present case are substantially different from those obtaining in the various cases relied upon by the appellant. Further these decisions did not lay down any ratio that separate rules of classification would apply for levy of different types of customs duty. Therefore, the ratio of these decisions cannot apply. 24.9 In the present case, the appellant has resorted to....
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....e domestic market by M/s. PIND was also manufactured by M/s. PIL for M/s. PIND. Further, in his statement, B. Nagpal, on behalf of the importer, has categorically stated that synthetic uppers (imported by M/s. PIL), soles, insoles and sock liners (imported by M/s. PIND) did constitute complete shoe in SKD condition. Therefore, when we come to the question of "intention" in the present case it becomes clear that the entire device of bifurcation was arranged in order to bypass the restriction imposed vide para 156(A) of the EXIM Policy. The reply of B. Nagpal indicates that, according to the importer, the said four components did constitute synthetic shoe in SKD condition and in order to circumvent 156(A) the entire device was arranged by the importer to evade duty. Further, we find that in the reply to the show cause notices there were no details supplied by the importer regarding the number of units under M/s. PIL. The statement of Bhupinder Nagpal in the preliminary enquiry shows that there were three units in Noida under M/s. PIL. One unit is in B-1C, Sector 10 manufacturing "Phoenix" brand of shoes for exports. There was one more unit in A-4, Sector 5 manufacturing "Reebok" bran....
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....n to M/s. PIL who along with 28 other items (peripherals), procured domestically, manufactured the finished product, viz., synthetic shoes. The entire device was undertaken to show that what was imported were parts and not the footwear in the SKD condition. Therefore, M/s. PIL was the only real importer of all the four items and, in the circumstances, the Department was right in clubbing. The ratio of the above decision, in my view, applies squarely to the facts of the present case as the factual matrix is very similar. 24.10 Similarly, in the case of Videomax Electronics, this Tribunal considered a case of Customs duty evasion by presenting the goods as parts instead of complete articles so as to defraud the exchequer and to circumvent import policy restrictions and this Tribunal held as follows :- "14. Thus it can be seen that, whenever it was found that freely importable components or parts of articles which were prohibited or restricted for import under the Import Policy were imported by a person in his own name or in the names of two or more firms (which were either fictitious or directly or indirectly controlled by such person) contemporaneously and presented fo....