TMI Blog2019 (11) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... squarely cover the imports made at Mumbai. Since we find that the issue is squarely covered by the said decision in case of appellant themselves we follow the said decision and remand the matter back to adjudicating authority for re-computation of differential duty and penalties to be imposed in light of re-computed duty liabilities - appeal allowed by way of remand. - Customs Appeal No. 800-801 of 2010 - FINAL ORDER NO. A/86980-86981/2019 - Dated:- 1-11-2019 - Mr. S.K. Mohanty, Member (Judicial) and Mr. Sanjiv Srivastava, Member (Technical) Shri D.B. Shroff, Advocate, for the Appellant Shri A.P. Kothari, Authorised Representative for the Respondent ORDER These appeals are directed against the order in original No CC/MJ/11/2010 ADJ.ACC dated 30.07.2010. By the impugned order Commissioner held as follows: 30. In view of the findings as detailed above, I pass the following- ORDER (a) The value initially declared by IMCL in Bill of Entry No 643559 dated 24.06.2003 is rejected under Rule 10A of the Customs Valuation (Determination of the Price of Goods) Rules, 1988. The value o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harge, a watch was kept by the SIIB section on the B/E being filed in the name of the appellants. 2.2 Appellants filed a Bill of Entry No 643559 on 24.06.03 submitting six different invoices having No 271105509, 271105510, 271105511, 271105512, 271105513 and 271105514 all dated 20.06.2003 for nineteen items covered the Bill of Entry. Classification of the nineteen items was claimed separately and the total declared CIF value was US$ 2,04,339(₹ 96,24,367/- approx) and the declared assessable value was ₹ 1,02,91,463/-. Duty amount of ₹ 33,19,771/- was paid vide challan No. 98657879 dated 24.06.2003. 2.3 On examination of the consignment same was found to consist of 8 items as several cards were already assembled into the main units. Though the B/E described the goods individually they were found to be already built into multiplexers, descrambler/receivers/ system/ trackers/ servers etc. These items together constituted Headend for Cable TV operations. A Cable Headend is the equipment at a local cable TV Office that originates and communicates cable TV services and cable modem services to subscribers through conditional access mode. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the settled principle that if the article is classifiable under specific entry the same could not have been classified in residuary entry. [Dunlop India Ltd 1983 (13) ELT 1566 (SC)] Heading 85438999 is referring to only electrical machines not specified or included elsewhere in chapter 85. It cannot be applied to the goods classifiable under Chapter 84. In the present case these machines which are electronic and not electrical are specified or included in various headings of chapter 84 and 85. Electronic Machines are different from electrical machines and hence the entire basis of classification is wrong; Though Show Cause notice proposed to classify all the entire consignment of imported goods on the basis of Chapter Note 5(E) read with Section Note 4 to Section XVI, Commissioner has held against applicability of Chapter Note 5(E); Reliance placed on Section Note 4 is also erroneous, as each of the imported item performs individually specified function and needs to be classified accordingly. In any event the imported goods do not even fulfil the clearly defined function required by CAS as several other pieces of equipmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s when this correction is made in the proposal to the show cause notice, the undervaluation on account of software amounts to US$ 17,513. However after holding so he did not reduced the demand in respect of software from US$ 45,725 to US$ 17,513 but held that the value of software suppressed in the final invoice has been added to the cost of services in the final invoice and since the cost of services is getting added to the assessable value there was no scope for adding the differential price of software separately; The conclusion in the impugned order that the design and product management services and testing and factory acceptance test has to be added to the assessable value as such services were performed abroad is manifestly baseless and without any basis. Supplier had sent an offer on 04.04.2003 giving the list of items together with the price of each item. The total price for two sets comprising of Tandberg equipment as also the brought out equipment and services was US$890,500 and after giving lump sum discount of US$ 300,000 the final offer price was US$ 590,500; The LOI prepared on the basis of this offer was subject to approv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not applicable. Merely for the reason that Shri Deshpande was functioning as Vice President Technical looking after the technical matters cannot be reason for concluding that he was liable to penalty. 3.3 Arguing for the revenue learned Authorized Representative while reiterating the findings in order submitted that 10 Appellants had simultaneously imported similar consignments at Air Cargo Complex Delhi and Mumbai; The on the basis of investigations undertaken at Mumbai show cause notice was issued on identical grounds at Mumbai and Delhi. The show cause notice issued in Delhi was adjudicated by the Commissioner Air Cargo Complex New Delhi vide his order in original Number 19/2015 dated 29.12.2015. Tribunal has vide its order reported as Brigadier R Deshpande [2018 (363) ELT 572 (T-Del)] confirmed the order of Commissioner on all counts holding the classification of goods under 85438999 and also held that service charges are includible in the assessable value. Since matter in respect of the same imports made by the same party at Delhi has been adjudicated by the CES ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted consignments at Delhi and Mumbai. They had suppressed the value of embedded software as well as value of services payable to the foreign supplier for carrying out integration of the system prior to shipment and provide complete commission and installation services at the customers premises. Further, it was noticed that the purchase order placed by the importer was revised to show as CIF instead of FOB. 3. In the light of investigation carried out at Mumbai, Customs authorities at Delhi issued Show Cause Notice which resulted in impugned order as follows : (i) The classification of all imported components were taken together and made under CTH 8543 89 99 of the Customs Tariff Act. (ii) The value of imported goods was redetermined and finally provisional assessment was finalised resulting in demand of differential duty of ₹ 54,19,475/- along with interest and penalty imposed under various sections of Customs Act on the importer as well as Brigadier Deshpande. Aggrieved by the impugned order, present appeals have been filed. . 5. The Learned Counsel for the appellant ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eady embedded in the equipment. However, the importer failed to declare the value of the software. The imported equipments are not classifiable under transmission apparatus under CTH 8525 and hence, Head End was classifiable under 8543 where the device cannot be classified anywhere else. 4. All the components were not imported in isolation but intended for supply of Head End. 5. Importer fabricated the document by partially suppressing the value of goods with the intention of evading the customs duty. In this regard, the Shri Srinivas Palakodeti, CEO and Brig Deshpande are on record and are liable to penalty. He prayed that impugned order be sustained. 8. After hearing both sides and perusal of record, we find that there are two major issues to be decided. 1. First is the classification of the imported goods -whether 8543 as ordered by the adjudicated authority or 8525 as claimed by the appellant. 2 Second issue is of valuation - whether the value of software already embedded in the equipment as well as service charges are required to be included in the assessable value . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 12. We find similar equipments were held to be classified under 8525 in the case of SET India Pvt. Ltd. v. CC (supra) wherein the Tribunal has observed that 8. These goods therefore should equally be described as transmission incorporating reception apparatus. It is significant to consider similar goods in Heading 85.25 which includes transmission apparatus for radio-telephony, radio-telegraphy. Heading 85.25 also includes transmission apparatus for radio-telephony, radio-telegraphy and radiobroadcasting. The explanatory notes to the heading include any transmission apparatus for radio-telephony or radiotelegraphy, such goods as portable radio-telephones, usually battery operated, of the walkie-talkie as well as transmitters/receivers of telemetric signals and separately presented cordless handsets for line telephone sets. Each of these three items transmit as well as receive wireless signals. Applying the arguments of the departmental representative, these goods must rightly be classified in Heading 85.27 which covers only reception apparatus for radio-telephony, radiotelegraphy or radio-broadcasting. It would be reasonable to say that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 provide the methodology for determination of assessable value in cases where transaction value does not reflect the true value of import transaction. Rule 10 provides for addition of certain cost and services under certain conditions. What is relevant in the present case is Rule 10 which is as under : (1) In determining the transaction value, there shall be added to the price actually paid or payable for the imported goods - (a) (b) The value, apportioned as appropriate, of the following goods and services where supplied directly or indirectly by the buyer free of charge or at reduced cost for use in connection with the production and sale for export of imported goods, to the extent that such value has not been included in the price actually paid or payable, namely :- (i) materials, components, parts and similar items incorporated in the imported goods; (ii) tools, dies, moulds and similar items used in the production of the imported goods; (iii) Materials consumed in the production of the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Entry No/ Date 260085/ 26.06.03 643559 / 24.06.03 S N o Description Qty Unit Total Qty Unit Total Invoice No/ date 271105515/20.06. 03 271105509/20.06. 03 1 Multiplexer MUX 2C MX 5640 3 11742 35226 3 11742 35226 2 Multiplexer MUX MX 5640 ASI IN PUT Card 15 3203 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 TT6120 Base with PID Filtering 5 346 1730 5 346 1730 1 0 DVB ASI/ M2 Input OPT 5 1814 9070 5 1814 9070 1 1 QAM Mod (40-860 MHZFCONN ) Table Handling DVB PSI/ S1 5 130 650 5 130 650 Total 62582 62582 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Invoice No/ date 271105519/20.06. 03 271105513/20.06. 03 1 7 TDC Redundancy Option License/ TT 6000 Routers License/ TDCS 6 1299.3 7796 6 1299.3 7796 Invoice No/ date 271105520/20.06. 03 271105514/20.06. 03 1 8 Peripheral Racks 14 462.6 6477 14 462.6 6477 1 9 3 rd Par ..... X X X X Extracts X X X X X X X X Extracts X X X X
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