TMI Blog2018 (11) TMI 370X X X X Extracts X X X X X X X X Extracts X X X X ..... of the present case, there is no difference in the nature of the goods imported with three dredgers and goods imported subsequently under two bills of entry dated 07.02.2017. It is also not disputed that whether the same parts and accessories i.e. pontoons, pipes etc. imported with first consignment and similar items imported in the second consignment were used put together for the activity of dredging for their clients. Both the consignments were imported by the appellant for only one project. Since the dredger and its parts are huge in size and quantity, it is not possible to import the entire consignment at a time. Therefore, the entire goods were imported in piece-meal. However, all the goods presented together would constitute dredger and then only it can be used for the work assigned to the appellant. From the facts of the case, even though the same parts were imported along with three dredgers but the remaining parts which were imported subsequently which are subject matter of this case were used for the same work in the same manner. In this position, some parts of same goods cannot be treated differently. Once the integral part of equipment is imported and other equ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tract with M/s. Swan LNG Pvt. Limited for carrying out dredging and reclamation in sea coast , near Jafrabad, Pipavav. They had imported three old and used Dredgers, one Barge, two self propelled Multicat along with accessories, pipelines and pontoons required for dredging operation at Pipavav Port in the month of January 2017 as detailed below: Sr. No. Bill of Entry No. Date Description of goods 1 8142628 10.01.2017 Al-Mirfa, Kattouf Dredger Belyryar, Multicat 2 8145408 10.01.2017 Embarka-5 Dredger, M6 Multicat 3 8134925 10.01.2017 Barge Fidelia 4 8141458 10.01.2017 Crawler Crane Further, in the month of February 2017, they imported Old and Used Pipelines, Pontoons etc. declaring the same to be integral part of the dredgers already imported by them in January 2017, the details are as under:- Sr. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reject M/s. National Marine and Infrastructure India Pvt. Limited Mumbai declared classification of the imported goods under CTH 89011090 and declared as Old Used Pontoons, integral parts of the dredgers Al Mirfa, Kattouf and Embarka-5 in the Bill of Entry No 8465433 dated 07.02.2017 and order reclassification of the same under CTH 890O. (ii) I hereby reject M/s. National Marine and Infrastructure India Pvt. Limited, Mumbai declared classification of the imported goods classified under CTH 89051000 and declared as Old Used various types of pipelines, elbow, fittings equipments, integral parts of the dredgers Al- Mirfa, Kattouf and Embarka 5 in the Bill of Entry No. 8465442 dated 07.02.2017 and order reclassification of the pipes, pipe fittings like elbow, water box, Y-piece, shore connection, gate valves etc., cutter heads, cutter motors and side winch motor are falling under CTH 73049000,73072900, 73269080, 85015390 of Customs Tariff Act, 1975 respectively as proposed in show cause notice. (iii) I confirm the demand of differential duty amounting to ₹ 8,68,74,159/- (Rupees Eight Crore Sixty Eight Lakh Seventy Four Thousand One, Hundred Fifty Nine only) unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeared on behalf of the appellants. He submits that the Adjudicating Authority has decided the classification solely based upon the Explanatory Notes of HSN and explanatory notes are not a part of Indian Customs Tariff Act. In entirety it is a guiding force however, additional guidance would be required with the HSN Explanatory Notes and it itself is not sufficient to decide the matter of classification. He submits that merely because some part of the Dredgers were imported subsequent to the import of three Dredgers with accessories, the classification on that basis cannot be different from the admitted classification of the same goods imported with Dredgers. He submits that similar items which are parts of dredger and imported along with Dredger were admittedly classified under the head of dredger as accessories. Therefore the same items imported for the same purpose, cannot have a different classification. He referred to Note of Section XVII of first Schedule to Customs Tariff Act and submits that the said Section excludes certain goods from the whole of the Section of the schedule. The subject goods are not covered under any exclusive clause of the said note. He referred to Bri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8905.10 as Dredging on the basis of use of the material for operation of dredging. The said decision of the Tribunal was upheld by the Hon'ble Supreme Court reported at 2002 (139) ELT A313 (SC). He submits that as per the contract, the appellant was required to import three CSD dredgers complete in every respect to execute the work awarded under the contract and accordingly various essential equipments like pipes, elbows, pontoons etc. were required to complete the work. The goods imported with three CSD dredgers together are some additional parts imported subsequently and all put together to use for execution of the project without which the operation of dredging to complete the work was not possible. Therefore, three CSD dredgers which are complete not only with the parts imported along with but with subsequent imports. Therefore, for the purpose of classification, both the consignments cannot be treated differently. 2.1 Ld. Counsel further submitted that the contention of the Revenue that second consignment has been invoiced separately as well as it does not constitute integral part of the three dredgers, is totally incorrect, in view of the fact that any consignment is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .e. together with the main article are entitled to exemption under Accessories (Condition) Rules, 1963. He submits that in terms of these Rules, accessories and spare parts and any article when imported along with that article shall be chargeable at the same rate of duty as that article if the appropriate officer is satisfied that in the ordinary course of trade such accessories, parts and components are compulsorily supplied along with that article and no separate charge is made for such supply and their prices are included in the price of the article. In the present case also, the second consignment, though supplied subsequently but it is for the use along with three dredgers and no separate charge was made as the supply is for the completion of the project and not for sale of goods as such. He submits that the word along with does not mean together-with in the sense as sought to be construed by the Revenue. He submits that in the case of dredgers, it is not possible to transport the entire dredger in one consignment and therefore, it has to be transported in dissembled condition. Only due to this reason, the Accessories (Condition) Rules, 1963 cannot become inapplicable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -Cus dated 01.03.2012, he submits that the correct description was detailed in the bills of entry and it was also stated that these are the parts of three dredgers which were already imported. Therefore, it cannot be said that appellant have mis-declared the goods with intention to wrongly avail the benefit of Notification No. 12/2012-Cus dated 01.03.2012. On the issue of imposition of penalties, he placed reliance on the following judgments :- (a) Northern Plastics Limited vs. CC CCE 1998 (7) TMI 91 (SCI) (b) Jay Agro Organics Limited vs. CC, Ahmedabad 2015 (7) TMI 179 CESTAT Ahmedabad (c) CC vs. Gaurav Enterprises 2005 (9) TMI 99 High Court Bombay 3. As regards confiscation of the goods, he submits that since, the appellant have correctly declared the description of the goods imported, the good are not liable for confiscation. He placed reliance on the decision of this Tribunal in the case of PSL Limited Ors vs. CC, Kandla 2014 (5) TMI 789-CESTAT Ahmedabad. Based on the above submissions, he prays to set-aside the impugned order and allow the appeals. 4. Shri Jeetesh Nagori, ld. Additional Commissioner (AR) appearing on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same cannot be classified under the head of Dredgers and will be classifiable under the respective head of individual parts. We find that in the peculiar facts of the present case, there is no difference in the nature of the goods imported with three dredgers and goods imported subsequently under two bills of entry dated 07.02.2017. It is also not disputed that whether the same parts and accessories i.e. pontoons, pipes etc. imported with first consignment and similar items imported in the second consignment were used put together for the activity of dredging for their clients. Both the consignments were imported by the appellant for only one project. Since the dredger and its parts are huge in size and quantity, it is not possible to import the entire consignment at a time. Therefore, the entire goods were imported in piece-meal. However, all the goods presented together would constitute dredger and then only it can be used for the work assigned to the appellant. As regards the heavy reliance made by the Adjudicating Authority on Note 2 of Section XVII of Customs Tariff Act, we find that certain goods, for the purpose of classification, were excluded from the second schedule but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. (c) When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. From the plain reading of the above Rule 2(a), it can be seen that even if the goods is presented in unassembled or disassembled, if it has essential character of complete or finished item, it shall be taken to include a reference to that article complete or finished article. In the present case, three dredgers along with the parts and accessories supplied therewith and subsequent impor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overed by all the bills of entry are assembled together, there will be a full and complete machine. The said decision was upheld by the Hon'ble Supreme Court as per the above citation. The facts of the present case is similar to the facts of the above case inasmuch as all the consignments of Dredger and some parts were imported on 10.01.2017 and remaining parts of the same equipment were imported under two bills of entry dated 07.02.2017, therefore, merely because of the time gap, both cannot be classified under a different head, particularly for the reason that some parts which were imported along with dredgers were classified under the head of Dredger i.e. 8905. The similar facts were also involved in the case of Hindustan Motors Limited 2003 (156) ELT 155 wherein the importer imported complete diesel/ petrol engines in unassembled condition during the period February 1999 to July 2000 and cleared the same under 104 bills of entry by declaring them as parts and components of such engines. The matter was taken up in appeal before this Tribunal and this Tribunal observed that M/s. Hindustan Motors Limited had imported component sets of engines in unassembled condition which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the appellant is not for sale therefore, the entire consignment is used for execution of the project. Therefore, there is no question of any separate charge made for such supplies. Since the complete import, even though in two parts, is for one project, number of consignment of parts and accessories cannot be separated in terms of Rule 2(a) of GRI. Accordingly, there is no contravention of Accessories (Condition) Rules, 1963. As per the HSN Notes of Chapter 89, for the purpose of classification of a complete vessel, certain parts which are separately presented are required to be classified in proper heading. The said Chapter Note is reproduced :- (B) Hulls of any material. Complete vessels presented unassembled or disassembled, and hulls, unfinished or incomplete vessels (whether assembled or not), are classified as vessels of a particular kind, if they have the essential character of that kind of vessel, hi other cases, such goods are classified in heading 89.06. Contrary to the provisions relating to the transport equipment falling in other Chapters of Section XVII, this Chapter excludes all separately presented parts ( other than hulls) and accessories of vessels or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he present case, the parts and accessories are solely and principally suitable for use with Dredger and the same were imported along with Dredger for use putting together for one and the single project. Therefore, the above General Note is not applicable. 8. The Revenue has heavily relied on the Accessories (Condition) Rules, 1963 which is of no help to the Revenue for the reason that in the present case, there is no separate heading for parts and Dredgers. Therefore, the parts of dredger otherwise classifiable under the head Dredger only and even if it is presumed that the parts being imported separately, then also the same will merit classification under the head of Dredger. 9. Though we have discussed above in length about the legal interpretation of relevant provisions, but on the very identical issue, in the same set of facts, this Tribunal has decided the issue particularly for the same product i.e. Dredger, in the case of Boskalis Dredging India Pvt. Limited vs. CC, Bhubaneswar 2001 (135) ELT 1396 (Tri. Kolkata). In this case, the facts and the order thereon, is as under:- The facts in the said case are:- 1. The appellants herein, M/s. Boskalis Dredging In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ange transaction. One OH Dredger Anchor Handling Pontoon Type and one Cutter Suction Dredger were assessed at nil rate of duty by extending the benefit of Notification No. 133/87. However, dispute arose in respect of other items as to whether the same are parts of the Dredger liable to be extended the benefit of notification in question or the same are required to be assessed separately and individually under their respective headings attracting duty. The appellants claim is that all the items imported by the two different vessels though covered under different invoices showing separate prices of each item and though covered under different bills of entry essentially comprise a complete Dredger and merit classification under sub-heading 89.05 and as such, attract Notification No. 133/87. The appellants claim is that the Dredger being a huge item cannot be imported in its complete form and as such, the same was dispatched by their parent company, M/s. Boskalis of Netherlands in semi-knocked-down condition. The decision in the case is :- 10. From the definitions of various Dredgers as extracted above, we find that Dredging, no doubt, means excavation. But there is defini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d driving horsepower, which may range from 20 to 5000, or in the case of very large dredgers by the total installed horsepower......... . The main pontoon structure contains the dredge pumps (s), the main engines and all ancillary engines, drives and equipment. ...... The discharge from the dredge pumps (s) passes over the stern (or opposite end to the cutter) of the pontoon to a heavy hose or flexible coupling, to which is connected a floating pipeline (see A. 4.5.3) which in turn is connected to an onshore pipeline. Sometimes an intermediate sea bed pipeline may be used. Para 4.4.2 of the British Standard Specification is also being reproduced below for better appreciation :- 4.4.2. Pipelines Pipelines affect both the performance and operational efficiency of the Cutter Suction Dredger. The diameter of the pipeline has a direct bearing on the efficiency of the hydrotransport process. Pipelines fall into the following two categories. 11. From the above description of the Cutter Suction Dredger also, we find that Pipelines attached with the Suction Dredger forms an indispensable part of the main mother craft. The cutterhead, which may be elec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant in bills of entry No. 8465433 dated 07.02.2017 declared old and used pontoons as integral part of the dredger but under CTH 89011090, however, in their submission before the Adjudicating Authority they have categorically stated that declaration under this Chapter heading was made for the reason that in both the Chapter headings 8905 and 8901 the rate of duty was NIL. 10. Though, we discussed in length on the basis of facts as well as by support of the cited judgments that pipes and pontoons are integral parts of Dredger but we have further examined some more material available on record. As per the British Standard as well as the Chartered Engineer has certified that Pontoons are the essential components of floating Pipelines. In the relevant invoices of the Pontoons at the bottom, it is declared by the supplier that Pontoons are the integral parts of dredgers. In the statement dated 22.03.2017 Mr. Mohammed Abdelnabi, Technical Superintendent of appellant stated that Pontoons are used as floating structure for pipelines so that the pipelines do not sink in water and the same is not used to carry or transport any goods. Mr. Nicholas Charles D Souza, Logistic Manager of appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
