Customs, Excise and Gold Tribunal - Tamil Nadu
Commissioner Of Customs vs Sterling Computers Ltd. on 3 August, 2000
Equivalent citations: 2001(130)ELT75(TRI-CHENNAI)
ORDER S.S. Sekhon, Member (T)
1. M/s. Sterling Computers, respondent importer herein imported 5,500 sets of components of DL-3400 Printer. Each set was consisting of 17 parts. The printers in SKD condition were imported except the interface populated printer circuit board and assembled them. The goods were examined and licences were used for imports valid under Appendix 3 Part A of the Import Policy. The Collector of Customs, Chennai after hearing the parties decided the matter of classification of power supply boards and also requirement of ITC licence for printer mechanisms of a width more than 40 columns (Platten width) by holding the power supply boards to be classified under heading 8504.40 and he allowed 2500 numbers of printer mechanisms free of duty against an advance licence and ordered payment of differential duty on 3000 numbers of printer mechanisms cleared on provisional assessments as he did not find any action liable under Sections 111(d) and 111(m) of the Customs Act. He also did not propose to take any action under Section 112 of the Customs Act.
2. Revenue has filed this appeal under Section 129D(1) of the Customs Act seeking modification of the order of the Collector to the extent that:
(a) 5500 nos. of PC Board PWOAB declared by M/s. SCL as "power supply" be held to be classifiable under S.H. 8473.30 instead of under S.H. 8504.40 as 'Static Converter',
(b) As a result of aforesaid classification hold that differential duty is leviable on the goods mentioned at (a) above and that it shall be payable by M/s. SCL,
(c) 5500 printer mechanisms and 5500 PC Board PWOAB (power supply) be held as imported illegally in contravention of I.T.C. regulations and therefore, be held liable for confiscation under Sections 111(d) & 111(m) of the Act,
(d) out of the said quantity of 5500, 3000 printer mechanisms be ordered to be appropriated in lieu of confiscation against the P.D. Bonds/Bank Guarantee having been released provisionally, and the remaining 2500 PCs be held liable for confiscation,
(e) consequently, the duty of Rs. 1,17,85,93/- be also confirmed on this quantity as demanded in the show cause notice, and
(f) the goods be held to have been imported illegally without a valid licence and, therefore, penalty commensurate with the offence committed be imposed U/S 112 ibid upon M/s. SCL or pass such order as deemed fit.
3. We have heard the ld. DR who has submitted as follows :-
Power supply boards.
These were ordered to be classified under heading 8504.40 as static converters. This is wrong for the following reasons :-
These boards are specifically designed as part of DL 3400 Dot Matric Printer and are designed to supply power only to the printer. These are referred to in the documents as SKD parts of printer.
Hence classification as parts of printers under heading 8473.30 would be appropriate and differential duty is payable.
For import policy purposes also the goods were ordered to be treated as static converters falling under Appendix 3A of the Import Policy, 1990-93. As these are nothing but electronic sub-assemblies these will be correctly covered by Serial No. 16 of Appendix 2 Part B of the policy and hence specific licence is required.
As the respondents do not have specific licence the goods are liable for confiscation.
Printer Mechanisms These are treated as covered by entry No. 730 in Appendix 3 Part A and allowed to be cleared against rep/additional licence.
The above entry is for 'engineering and allied items other than those listed in Appendices 2,5,6,8 and 10'.
On the other hand the generic entry in Appendix 2 Part B reads 'kits/ready to assemble sets, assemblies, sub-assemblies, modules, and combination thereof consisting of electronic items'.
The printer mechanisms under question will squarely fall under the above heading and between the above two entries the second entry will prevail.
Accordingly a specific licence is required to import these goods. As the respondent does not have a specific licence these are also liable for confiscation.
4. Learned Advocate for the respondent has reiterated the findings of the Commissioner and submitted that printer mechanisms are covered under Appendix 3A at item 730.
5. We have considered the rival submissions and the material on record and find -
(a) The department is relying on the statement of the Director of the respondent company as noted by the Commissioner in page 13 of the impugned order who has stated as follows :-
"the goods are unassembled components and if they are assembled could give essential character of a printer though it will be incomplete"
This to our mind would indicate that the populated circuit board in the present condition would entitle to be assessed as static converters under heading 8504.40 as arrived at by the ld. Collector under heading 8504.40. We do not find any infirmity in the findings arrived at by the Collector nor do we find any fresh material in the present appeal to change the classification as arrived at.
(b) As regards the ITC licence requirement for printer mechanisms of a width more than 40 columns (platten width), we find that appendix 2B S. No. 176 reads as follows :-
"176. Kits/ready to assemble sets, assemblies, sub-assemblies, modules, and combination thereof consisting of electronic items (excluding those individually mentioned elsewhere in the Policy)"
(underlining supplied) While the item No. 64A(ii) under Appendix 6-List-8 Part I reads as follows :-
"(ii) Printer Mechanism below 40 Column (Platten width)" Appendix 3 - Part A - Item 730 reads as follows :-
"Engineering and allied items other than those listed in Appendices 6.8 & 10."
6. We have carefully considered the fair admission of the learned Advocate that the printer mechanism in this case is not less than 40 columns width. We cannot therefore agree with his further submissions that all kinds of printer mechanisms would be covered under Appendix 6 and since he has fairly conceded that there is no other entry for printer mechanisms under import, we would not find printer mechanism under import to be excluded from Item No. 176 Appendix 2B as per the exclusion clause which has been underlined and emphasised by us hereinabove. Therefore, we would allow this appeal by holding that the printer mechanisms in question would be covered by Appendix 2B and consequently requires ITC licence in this interpretation of ours. We are supported by Para 24(d) of the Import Export Policy which stipulates that the item with a generic description in Appendix 2B will prevail over an item with a generic description in Appendix 3A. Since the item No. 730 in Appendix 3A is a generic entry, generic entry under Item No. 176 of Appendix 2B would prevail over and therefore applying the classification and interpretation of the policy as per para 24, the importers are required to produce the suitable licence to cover the present import.
7. At this stage, the ld. Advocate submits that they had produced the licence. From the order impugned before us, we do not find any finding of the Collector on this aspect or a reference to it and therefore we cannot consider that aspect at this stage.
8. Since an import licence is required and the respondent importer's Advocate is making a strong plea that a licence was produced and there is no finding about such an act, we are not able to determine the margin of profit with subject imports for the purposes of determining the fine and penalty in this case, we would uphold the ground taken in the appeal as regards invocation of section 111(d) and would remand the case to the appropriate authorities to redetermine the fine and penalty if any subject to considering the submissions of the respondents importers and the effect of their submitting the import licence to cover the import of printer mechanisms in question.
9. The appeal is partly allowed in the above terms for de novo determination of the points referred.