TMI Blog2001 (3) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... er the impugned Order confirmed the demand of Customs duty amounting to Rs. 95,91,819/-, imposed penalty of Rs. 5 lakhs on the Appellant Co., Rs. 2 lakhs on Shri G.K. Jiwarjka, Director and Rs. 1 lakh on Shri C.S. Bhalla, Production Manager and held that the goods valued at Rs. 5.54 crores were liable for confiscation under Section 111(d) and 111(m) of the Customs Act but refrained from confiscating the same since the goods had already been cleared, holding that the Appellants had imported complete sets, of EPABX system and telephone sets in SKD form in the guise of parts/components; that the imports tallied with the production and planning chart which depicted in respect of each model, the time of shipment from foreign supplier, the receipt and production by the importer and supply to the ultimate buyer. He also relied upon the decision in Sharp Business Machines Pvt. Ltd. v. C.C., 1990 (49) E.L.T. 640 (S.C.). 3.Shri A.N. Haksar, learned Sr. Advocate, submitted that the Appellants had imported various components of the EPABX during 1995-96 and 1996-97, at three import stations namely, Air Cargo unit, I.C.D. Tughlakabad and I.C.D., Patparganj; that the exact description of compon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration; that the testing instruments installed in their factory is about Rs. 26 lakhs; that the raw material okayed is issued to the production department where the PCB's are modified in accordance with D.O.T., India specifications; that the whole operation is a complicated one and the system has to be modified to suit Indian System; it is not a case of assembly by means of simple fixing devices. 4.The learned Sr. Counsel, further, mentioned that Shri G.K. Jiwarajka, Director, had clearly stated in his statements that some components like resistors, capacitors, ICs and coils were identified as possible components to be sourced from local supplies before finalising the agreement and they imported also mounted PCBS for sale purposes only as these were used as per the requirement of Customs and were cleared from their factory on payment of Central Excise duties; that the deeming proviso of Rule 2(a) cannot be extended to interpret an exemption Notification and reliance was placed on the following decisions :- (i) Keltron Power Devices Ltd., 1987 (28) E.L.T. 93 (ii) G.K.N. Ltd., 1987 (29) E.L.T. 68, (iii) OEN India Ltd., 1989 (42) E.L.T. 235, (iv) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e under the Notification. He also relied upon the decision in C.C. v. Maruti Udyog, 1996 (16) RLT 646 (T) and Kores India case, 1997 (92) E.L.T. 685 and R.R. Electronics v. C.C., Mumbai - 2001 (127) E.L.T. 504 (Tribunal) = 2001 (73) ECC 143 (T). 5.He also stated that PCBs were imported against special import licences and the rest of the components fall under OGL list. The demand is time barred under Section 28 of the Customs Act as all relevant bills of entry relate to period beyond six months period; that there was no suppression on their part as they, in their letter dated 29-8-1995, had informed the Department about assembling of EPABX System and they were declaring on each B/E about availing of Modvat Credit; that there was no wilful misstatement and extended period of 5 years is not invokable. Moreover, there was no intent to evade payment of duty as already there were a number of decisions allowing benefit of Notification to components/parts. He finally submitted that accordingly no penalty is imposable on the importer co. and personal penalty is also not imposable on Director and Production Manager in absence of any findings in the impugned Order about their personal role. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shakti Enterprises v. C.C. - 1991 (52) E.L.T. 439 (T) 7.We have considered the submissions of both the sides. It is the case of the Revenue that the Appellants intentionally cleared the goods, declared as parts/components which were nothing but actually complete EPABX/Telephone kits, from three different ports with an intent to hide the actual identity of the imported goods and applying Rule 2(a) of the Interpretative Rules the products have to be classified as complete or finished goods. On the other hand, the Appellants have contended that they had imported various components during a period of 22 months ranging from March, 1995 to December, 1996 under 37 Bills of Entry; Rule 2(a) is not applicable as complete or finished articles were not presented unassembled or disassembled and their assembly operations were complex and intricate. Rule 2(a) of the Interpretative Rules reads as under :- "Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be classified differently. This was also the view of the Appellate Tribunal in CCE, Bangalore v. B.P.L. Sanyo Ltd., 1999 (111) E.L.T. 290 wherein if was held that "when deck is clearly classifiable under Headings 85.22, therefore, in terms of Interpretative Rules, we cannot proceed to apply Rule 2(a) of the said Rules." Similar views were expressed in the case of C.C.E., Bombay-I v. Crescent Metal Processing Works - 1999 (111) E.L.T. 841 (T). As the Appellants have imported components, these are to be classified accordingly. 10.The Appellants have also contended that even if Rule 2(a) of the Interpretative Rule is attracted, treating the goods as complete appliance, the exemption under the Notification cannot be denied to them as Rule 2(a) cannot be applied to Notification. In support of his contention he has relied upon the decision in the case of Wipro G.E. Medical Systems Ltd. v. C.C.E., Bangalore - 1996 (106) E.L.T. 169 (T). We observe that even in Maruti Udyog case, the Tribunal extended the benefit of Notification to the goods imported holding that what was imported was components and parts and the Notifications exempted components and parts. The Ld. Commissioner has diffe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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