Customs, Excise and Gold Tribunal - Tamil Nadu
Commissioner Of Customs vs Jay Engg. Works on 23 April, 2004
Equivalent citations: 2004(169)ELT275(TRI-CHENNAI)
ORDER P.G. Chacko, Member (J)
1. This appeal of the Revenue challenges the order of the Commissioner (Appeals) classifying the goods imported by the respondents under sub-heading 9031.80 of the Customs Tariff schedule and granting the benefit of Notification No. 118/86-Cus. to the goods.
2. We have examined the records. It appears that this appeal is arising in a second round of litigation. In the first round, we had remanded the matter to the lower appellate authority as per final order dt. 27-8-97 directing the authority to dispose of the matter afresh after considering various aspects of the matter including the classification of the imported goods. The remand order had reproduced the Heading No. 90.17 (as this heading stood at that time) as also the relevant data contained in the Product Literature filed by the party. This Bench found that the classification of the product under Heading 90.17 had not been properly examined by the Commissioner of Customs (Appeals). The present appeal is against the order passed by the Commissioner (Appeals) in pursuance of the remand order. The operative part of the impugned order is reproduced under :-
"I have examined the facts of the case in the light of the directions of the Tribunal. I have seen various heading and I find that the imported goods would be classifiable under Heading 9031.80 as other measuring equipments. I classify them under this heading.
I accept the plea of the appellants that the components imported along with the basic machines are part of a complete set and are necessary for its operation. They, therefore, should be classifiable along with the main equipment under Rule 2(a) of the Interpretation Rules. The benefit of Notification No. 11886 would, therefore, be available."
2. In this appeal the main ground raised by the Revenue is that, in terms of Rule 2 of the Accessories (Condition) Rules, 1963, accessories and spare parts of any imported article shall be chargeable at the same rate of duty as that of the article, only if the proper officer is satisfied that, in the ordinary course of trade,
(i) such accessories/parts are compulsorily supplied along with the article; and
(ii) their price being included in the price of the article.
The appellant contends that, in the impugned order, ld. Commissioner (Appeals) did not apply Rule 2 ibid, at all. He should have taken into account the fact that the accessories to the main equipment (comparator) imported by the respondents had been separately invoiced by the supplier and the value thereof was not included in that of the main equipment. Had these facts been taken into account, the accessories could not have been charged at the same rate of duty as that applicable to the main equipment. Ld. DR reiterates the above ground and submits that the original authority had correctly applied Rule 2 of the Accessories (Condition) Rules, 1963 to the accessories imported by the party. The first appellate authority, however, has not heeded the Rule and therefore the order of that authority cannot be sustained. Ld. Counsel for the respondents submits that the Commissioner (Appeals) has correctly classified the main equipment along with all the accessories thereto under sub-heading 9031.80 by applying Rule 2(a) of the Interpretative Rules.
3. We have examined the rival submissions. It is true that Rule 2(a) of the Interpretative Rules has been invoked by ld. Commissioner (Appeals) for classification of the main equipment along with all accessories thereto, imported by the party. We appreciate this. Nevertheless, we note, Rule 2 of the Accessories (Condition) Rules, 1963, which is apparently a provision relevant to the question whether accessories to any imported equipment should be chargeable at the same rate as, or at a rate of duty different from, the rate applicable to the main equipment, does not find any mention in the impugned order. This is a rule which was applied, rightly or wrongly, by the original authority. Consistently, the appellant has invoked the Rule, again, in the present appeal. The Accessories (Condition) Rules, 1963 were framed by the Central Government under Section 156 of the Customs Act. A reading of this Section of the Act indicates that the Rules were named under Clause (b) of Sub-section (2) of the said Section. This Clause (b) seems to have a strong bearing on the classification of accessories/spare parts imported along with the main article. This provision has not been looked into by the Commissioner (Appeals) while deciding on the classification issue. In the circumstances, we have no option other than making a second remand. Accordingly, the impugned order is set aside and ld. Commissioner (Appeals) is directed to dispose of the matter afresh in terms of the relevant observations contained in this order, as well as in accordance with the law and the principle of natural justice. It is felt that, as the case pertains to imports which took place a decade ago, it must attain finality at the earliest. Accordingly, we would call upon ld. Commissioner (Appeals) to pass a speaking order in the case within a period of three months from the date of receipt of a certified copy of this order.
4. The appeal of the Revenue stands allowed by remand.