TMI Blog1986 (11) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... this Bench M/s. Enfield India Ltd. and also M/s. Tata Engineering Locomotive Company Ltd., both represented by Shri S. Subramanian, Consultant, applied that they may be permitted to participate in the proceedings before us as interveners since a large number of their cases are also to be heard by this Tribunal in which the issue now before us would be the main issue. After hearing Shri Gujral, the learned Counsel for the appellants, M/s. Bharat Heavy Electricals Ltd. and Shri J. Gopinath, SDR for the Department permission was granted for the said two firms to participate in the proceedings as interveners, making it specific that submissions on their part would be confined to general principles of law such as interpretation of the rules and other legal questions and not on the facts of their respective cases, since the appeals of the interveners are not before this Bench for disposal. 3.The goods imported by the appellants were Rough machine banding ring forgings. The appellants claimed that they were to be assessed under Heading 84.11(1) CTA. But the Department assessed the goods in one case under Heading 73.06/07(2) CTA and in the other case under Heading 73.33/40 CTA. After p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive members had been constituted for the purpose of evolving, if possible, any general guidelines that would govern the application of the provisions of Rule 2(a). It was in this connection that various earlier decisions were referred to. In these earlier decisions the provisions of this rule were applied to determine whether the incomplete or unfinished product imported will have to be classified under the heading under which the completed product would fall. Naturally, in applying the rule the conditions set forth in Rule 2(a) were taken into consideration in order to decide whether the said conditions were fulfilled in terms of Rule 2(a). In order to classify the incomplete or unfinished product under the heading relevant to the complete product the condition to be fulfilled would be that as imported the incomplete or unfinished articles should have the essential character of the complete article. In page 2 of Vol. I of CCCN Explanatory notes it has been mentioned with reference to the provisions of Rule 2(a) in the CCCN (which is the same as Rule 2(a) in the first Schedule to Import Tariff of our Customs Tariff Act) that the provisions of that rule also apply to blanks, the ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion into the finished article. 9.One of the tests stressed by Shri Gujral during his submissions was the test of the cost of the operations to be performed on the imported article to manufacture the complete article. He pointed out that, earlier, the Government of India itself had laid down a general principle that when such cost would be not more than 5% of the c.i.f. value of the imported product the provisions of Rule 2(a) could be deemed to have been satisfied. We find a reference to some such principle in the case of Central Railways Bombay v. Collector of Customs, Bombay (1984 ECR 1201) and also the case of Philips India Ltd. v. Collector of Customs, Bombay (1984 ECR 1524). But a perusal of the judgment in the case of Central Railways shows that the directive appears to have been issued with reference to material imported for use by the Railways and not by way of any general principle. Nor have we been specifically shown any such general directive issued by the Central Government based on the cost of the post-importation operations being relevant for determining the mode of assessment, applying Rule 2(a). Nor are we convinced that this fact of the cost of post-importation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en Interpretative Rule 2(a) would be applicable for assessment and when assessment will have to be done without reference to this Interpretative Rule 2(a) and a view has to be taken on the basis of facts of each case. 12.It has now to be seen whether the requirements of Rule 2(a) are satisfied in the case of the two imports of the appellants and whether, applying the provisions of the said rule, the appellants would be entitled to the classification claimed by them and, on that basis, refund of the differential duty. The products imported in both cases were Rough machined banding ring forgings. The learned Counsel explained that the imports were in terms of orders placed, giving detailed specification of the goods, with special reference to chemical composition, mechanical and metallurgical properties and heat treatment, machining being done to prescribed dimension, and surface finished. According to him these pre-import processes are highly sophisticated and as provision for carrying out these operations would not be available with the appellants in India they had specifically requested the suppliers to carry out all these processes before export, leaving it necessary for the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nch and it was undertaken that the information would be furnished by a person technically qualified and with knowledge of these processes the certificate was finally filed by a person who obviously had no personal knowledge thereof. Similarly, in respect of the cost of operations also, Shri Keshavrao obviously had no personal knowledge since even the certificate read that the cost was being furnished as mentioned earlier and that the same had been checked up by the Cost Accounts Department. No details have been given as to how this figure of Rs.165/- was arrived at. In the circumstances we have necessarily to observe that these two certificates were not of much help to us in the determination of the dispute in these two appeals. Anyway, as already held in the earlier part of the order, the cost of post-importation processes is not a relevant consideration. 14.In this certificate regarding the post-importation processes the details of processes have been furnished as (1) removal of test piece; (2) parting into two equal pieces; (3) groove cutting; (4) champering; (5) taper cutting; and (6) cleaning and deburring. We may note that no reference has been made in this certificate to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our of the complete product except in the thickness, the thickness being a little over double the thickness of each of the complete rings. As explained for the appellants the product is imported in this form so that the two parts made out of the same have the same metallurgical properties, structural strength etc. since the two parts have to be used at either end of the same rotor arm. We see from the record of the personal hearing before the Collector (Appeals) (as extracted in his order) that the appellants had extended an invitation to the Collector to visit their factory and verify for himself the nature of the operations to appreciate their contentions. That does not appear to have been done. Nor has any other information been made available to us by the Department to establish that the unsplit part did not have any shape, contour etc., the essential character of the finished product. In the circumstances we are unable to accept the contention for the Department that this process of splitting into two would deny the applicability of Rule 2(a). 17.During the hearing a further doubt was felt whether the operation of groove cutting by means of vertical milling would not be a mi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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