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2019 (8) TMI 141

..... / importer is entitled for the benefit of the Notification No. 12/2012 for the products imported by him being agricultural machinery as named in Serial No. 399(A) of the said Notification? HELD THAT:- Apparently and admittedly, the appellant is importing the parts and the components. However, the case of appellant is that the parts and components i.e. laser level transmitter, laser receivers, control boxes connecting cables and rechargeable battery packs constitute a complete kit of the machine to be called as laser land leveller and it is only that cable connections between these parts as are required for them to be used as agricultural machine. The cabling is impressed upon to not to be a manufacturing activity. Apparently and admittedly, the appellant is importing different parts in a kit form/disassembled condition for which mere cable connection is required for said kit to constitute one single machine called as laser levelling machines. Those parts need simple cabling at the site, to be levelled, to function as a complete machine of laser land leveller. The said activity of cabling is already held to not to be called as manufacture. Those observations take the impugned import .....

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..... vel Transmitter with battery pack and charger etc. at a total declared assessable value of ₹ 1,06,72,548.47. Two invoices bearing No. 25613524 dated 08.05.2015 and 25613521 dated 07.05.2015 as issued by M/s. Trimble Europe B.V. Netherland were submitted by the importer. The goods were classified under CTH 84328090 and the benefit of Notification No. 12/2012-Customs dated 17 March, 2012 was availed. 2. At the time of assessment of the aforesaid Bill of Entry, Department observed that initially the goods were rightly classified by the importer under CTH 90 & 85 attracting BCD @ 7.5% & 10% whereas subsequently, the importer had wrongly classified the goods under CTH 8432 as Agriculture Machinery attracting BCD only @ 2.5% by virtue of the said Notification. It was also noticed by the Department that the importer sometimes imported one of the above said items and sometimes two or three of them and not the complete set of Laser Land Leveller. Accordingly, an opinion was formed that the appellant were not entitled for the exemption of the Notification. Resultantly, a show cause notice No. 7406 dated 07.06.2016 was served upon the appellant proposing the recovery of customs .....

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..... . 12 dated 17.03.2012. Thus, there is no infirmity holding these being parts and components and not the agricultural machinery as described under Serial No. 399(A). For the products rather under serial No. 399(B) of the said Notification, condition No. 5 has to be complied with i.e. a procedure as set out in the Customs (import of goods at concessional rate of duty for manufacture of excisable goods) Rules, 1996 has to be followed. Admittedly, the appellants have no manufacturing unit nor are the manufacturer hence, the condition No. 5 stands unfulfilled. Thus, there is no infirmity in the Order. Appeal is, therefore, liable to be rejected. 6. After hearing both the parties and perusing the entire record we are of the opinion as follows: 6.1 The question to adjudicate in this Appeal is as to: 6.1.1 Whether the appellant Company/ importer is entitled for the benefit of the Notification No. 12/2012 for the products imported by him being agricultural machinery as named in Serial No. 399(A) of the said Notification. 6.1.2. For the purpose, Notification is to be looked into. It reads as follows: Sl. No. Chapter or heading or subheading of tariff item Description of goods Standard Rate A .....

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..... ds to avail benefit of the notification Sr. No. 399(B) should be such as have to undergo the process of manufacture for being called as agricultural machine at Sr. No. 399(A) of the Notification. Hence, it is foremost important to check as to whether cabling of various parts of agricultural machine so as to let them function as a complete machine amounts to manufacture or not. Section 2F of Central Excise Act, 1944 defines manufacture to include any process: (i) incidental or ancillary to the completion of a manufactured product. (ii) - (iii) - 8. The Hon ble Supreme Court in the case of Union of India Vs. Keshedeo Shivprasad 2002 (145) ELT A 163 (S.C.) has held that incidental or ancillary process must be an integral and inextricable part of production or manufacture resulting in presenting a finished or manufactured product bearing a distinct name. In this case, it was held that duty on packaged tea packed from fully manufactured loose tea was not sustainable. However, the definition or test more commonly used for ascertaining whether manufacture for the propose of attracting Central excise Levy has taken place or not is the one evolved by the Hon ble Supreme Court in U.O.I. Vs. .....

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..... achines. Those parts need simple cabling at the site, to be levelled, to function as a complete machine of laser land leveller. The said activity of cabling is already held to not to be called as manufacture. Those observations take the impugned imported products out of the ambit of serial No. 399(B) of Notification No. 12/2012. The allegation that these parts are not always in the term of kit are also not opined to be sustainable as is apparent from the invoices. The extra parts imported are for previously so imported machines, in addition to complete kit. There seems no reason to repeat the contention of the appellant that along with the kit the extra parts were imported for the other machines which were already in use. 11. Coming to the controversy of classifying the impugned goods initially under CTH 90153090 and subsequently, for availing the exemption, under CTH 84328090, we are of the opinion that the Rules of Interpretation shall help to adjudicate this controversy as per Rule 2(a) of General Rules of Interpretation Customs Tariff Act. Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as p .....

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..... e machine is laser land leveller. Keeping in view all the said observations, opinions and findings we hold that Department has wrongly held the articles imported to be the articles falling under either Chapter 9015 instead of Chapter 8432 and under Serial No. 399(B) of Notification No. 12/2012 by forming a rigid opinion about the products imported to merely be the parts and components of the impugned agricultural machines. The findings are therefore hereby set aside, also for the reason that the Department has failed to discharge its onus to prove the activity of the appellant as manufacture while putting the imported parts/components into the agricultural machine called laser land leveller. 15. Finally coming to the issue of another Appeal i.e. about the penalty upon the Director of the importer, we are of the opinion that it is very much apparent from the statement of the Director recorded on 10.07.2015 that since they were using the parts and components hence were under bonafide impression to classify them under Chapter 90153 but after the Notification and exemption thereof came to their notice, and that they are not registered with Central Excise for manufacture, that they righ .....

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