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2019 (11) TMI 129

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..... ports will 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 of all the goods imported under the said B/E taken together is re-determined under Rule 9(c) of the .....

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..... 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. Thus all the goods taken together were appropriately classifiable under CTH 85438999 in terms of Chapter Note 5(E) to Chapter 84 read with Section Note 4 to Section XVI. 2.4 Investigation under taken revealed that the goods were not only misdeclared vis a vis descript .....

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..... nic 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 equipment are required to be imported from elsewhere. Equipments imported from Scientific Nagarvision etc., etc has not be classified under Subheading 85438999, but under individual entries. Headend is just a generic term used to describe any device used in a headend and can be compared to an office where all the components are referred as office equipment . It is physical location where all the equipments required for receiving and transmitting/ broadcasting TV signals fo .....

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..... d 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 approval of Appellants Committee of Director, and was never approved. In meantime Tandberg issued revised offer dated 25.04.2003,segregating the equipments for Delhi and Mumbai. They also distributed the lump sum discount offered in the prices of individual items. This was done by Tandberg on its own without any request of advice from the appellants. The revised offer was approved by the Committee of Directors. Thus there is no basis for the impugned order holding that the discounts offered should be distributed proportionately amongst all the items shipped. The conclusion in the impugned order that two components of system integration in the services purchase orde .....

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..... ) 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 CESTAT Delhi Bench vide the above order the issue in the present case are not res-integra, and needs to be decided in line with the order of Delhi Bench. 4.1 We have considered the impugned order with the submissions made in appeal and during the course of arguments on appeal. 4.2 We find that the issue is squarely covered by the decision of CESTAT Delhi bench in the appellants own case referred by the learned Authorized Representative. The relevant portions of the said decision are reproduced below: The appeal is against the order-in-original number 19/2015, dated 29-12-2015. The appellant imported certain goods at air cargo complex, New Delhi and filed Bill of Entry 2660085, dated 26-6-2003. They declared the goods as Multiplexor Satellite Receivers, test and measurement equipment etc. and attached six invoices covering 19 items imported. They indicated individual classification for the .....

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..... order, present appeals have been filed. ………. 5. The Learned Counsel for the appellant argued as follows : (i) The impugned order has been passed without giving opportunity to the importer to file written reply and without personal hearing. (ii) There is no application for Rule 4 to section XVI in the present case. The terms Head End has been used to refer to the equipments which are used to provide cable TV services with Conditional Access System. It comprises of several equipments, each with its own electronic function, meriting individual classification. The department has wrongly classified the set of equipments under Chapter 85 calling it as Head End 6. The appellant also made an alternate submission on classification of the imported goods if they are deemed to be Head End . It will merit classification under CETH 8525 20 19 as a transmission apparatus and not in 8543 as contended by the department. There is no undervaluation of the imported goods and the department has incorrectly included the amount towards software and post import services by ignoring the revised offer submitted by the foreign supplier and the purchase orders placed by the appellants. Th .....

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..... under 19 serial numbers. Individual classification of these equipments were also indicated but during examination of the goods, it was found that only 8 number of goods were found as several cards were already assembled and embedded into the main unit. The investigation by the department revealed that the order placed by the appellant on M/s. Tandbarg, UK supplier is for supply of a suite of equipments which will function together as Head end for cable TV operations. After interconnecting all the imported equipments these were to be used for transmission of cable TV under the Conditional Access System. 10. The adjudicating authority has taken the view that all the equipments, after inter connection, will contribute towards a common function and hence in terms of Section Note 4 to section XVI the same will be classifiable under 8543. Section Note 4 to Section XVI is reproduced below : 4. Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Cha .....

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..... not of significance. 9. The explanatory notes included in Heading 85.25 television transmitters for industrial use explaining that with these apparatus, the transmission is often by line. They include in Heading 85.28 television receivers for industrial use explaining also with the apparatus, the transmission is often by line. It is not possible to conclude from this as the departmental representative wants us to do, that where transmission is by line, the goods should be classified in Heading 85.28. The real answer is transmission referred to in the Heading 85.25 refers to the transmission made by the transmitter for industrial use and the transmission by line referred to in the reception apparatus of Heading 85.28 refers to the transmission that is received by such apparatus by line. Obviously, if the transmission apparatus transmits the signal by line, the corresponding reception apparatus will necessarily receive the signal that is transmitted, only by line, we are unable to see the relevance of this point to the classification of the goods under consideration. 13. Similar views have also been held in the case of Commissioner Customs v. Multi Screen Media Pvt. Ltd. (supra). By .....

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..... the price actually paid or payable for the imported goods, notwithstanding the fact that such goods may be subjected to the said process after importation of such goods. 16. Since the software is already incorporated in the imported goods the value of same is required to be added to the transaction value. Likewise the purchase order also includes the process of installation of equipment after importation. The Explanation as above provides for addition of the charges towards this service also. 17. In view of the above discussions, that addition of the above changes paid by appellant to supplier, to the declared value for purpose of charging duty is upheld. 18. In the result, the classification of imported goods are ordered to be done 8525 and not under 8543 as held by the adjudicating authority. We uphold the addition in the assessable value made in the impugned order. 19. In view of the misdeclaration established in respect of valuation, the imported goods will be liable for confiscation under section 111 of the Customs Act and the appellant will also be liable for penalty. 20. The issue is to be remanded to the adjudicating authority only for the purpose of re-computing the differ .....

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