Customs, Excise and Gold Tribunal - Delhi
S.B.M. Engg. Products (P) Ltd. vs Collector Of Customs on 13 March, 1995
Equivalent citations: 1996(84)ELT428(TRI-DEL)
ORDER G.P. Agarwal, Member (J)
1. This appeal is directed against the impugned order-in-appeal No. 4321/83 BCH issued on 15-12-1983.
2. Brief facts leading to the present appeal are that the appellants imported one Unit of Maccanofilm Programme Computer and claimed clearance of the same under O.G.L. vide Appendix 10(1) of AM 1982-83. They also claimed concessional assessment under Notification No. 179/80, dated, 4th September, 1980 on the ground that the imported Unit of Maccanofilm Programme Computer is a part of Flat Bed Screen Printing Machine assessable under Heading 84.40(1). However, the Deputy Collector of Customs, Bombay, who adjudicated the case did not agree with the appellants and held that the subject goods were not component parts of machine but were computer system as defined in para 5(9) of the relevant policy. He also observed that the electronic equipment system, such as, the machine goods would fall under Serial No. 508 of Appendix 3 of the relevant policy. Accordingly, he ordered for the confiscation of the subject goods giving an option to redeem the same on payment of a redemption fine of Rs. 60,000/-. As regards the benefit of Notification No. 179/80, he held that although a certificate has been produced from the Textile Commissioner by the appellants, they failed to establish the status as component of the impugned goods in the Flat Bed Screen Printing Machine being manufactured by the appellants in India. Against that Order of the Deputy Collector of Customs, the appellants filed their appeal before the Collector (Appeals), Bombay, who while upholding the Order of the Deputy Collector remitted the redemption fine of Rs. 60,000/- imposed by the Deputy Collector in full. Hence, the present appeal.
3. Appearing on behalf of the appellants, Shri Sudhir Nandrajog, Advocate, submitted that the appellants were manufacturing Flat Bed Screen Printing Machine under collaboration with M/s. Reggiani Macchine, Italy. Elaborating, he submitted that on or about 8-10-1979, the appellants entered into an agreement, that is to say, Technical know-how Agreement with the said M/s. Reggiani Macchine, Italy, for rendering of technical know-how to the appellants for undertaking manufacture by them of Flat and Rotary Screen Printing Machines and Dryers along with its accessories, which include a programme computer for flat bed machines. On or about 3-4-1980 another agreement was arrived at between the appellants and the said M/s. Reggiani Macchine, Italy, whereby they agreed to purchase from the appellants parts and/or complete finished sub-assemblies of the said machines for sale all over the world. This Technical know-how Agreement was approved by the Director, Department of Industrial Development, Government of India, vide their letter dated ...-4-1980. By another letter dated 2-2-1981 addressed by the Deputy Director, Department of Textiles, Ministry of Commerce, Government of India, to the appellants, approval was accorded to the appellants to undertake phased manufacture of 6 numbers of the said Flat Bed Screen Printing Machines during the first year of manufacture containing import component of 44.93% of the F.O.B. value thereof. By another letter dated 1-12-1981 the said Deputy Director also accorded approval to the appellants to undertake phased manufacture of one Rotary Screen Printing Machine. The Assistant Director, Office of the Textile Commissioner, Government of India, also by his letter dated 29-6-1983 extended the registration granted to the appellants to undertake phased manufacture of the aforesaid equipment upto 30-6-1985 and were also permitted to undertake manufacture of 3 numbers Bowl Padding Mangle. In accordance with these approvals, the appellants undertook manufacture, inter alia of Flat Bed Screen Printing Machine at Bombay under Technical know-how Agreement with the said M/s. Reggiani Macchine, Italy. It was stressed that the said Flat Bed Screen Printing Machine is a machinery for printing of a repetitive design and/or printing of overall colours on textiles, and therefore, the said Machine falls within the category laid down in Heading No. 84.90 of the First Schedule to the Customs Tariff Act, 1975. He further submitted that the subject goods, namely, Maccanofilm Programme Computer is an essential component in the manufacture, inter alia of the said Flat Bed Screen Printing Machine, and, therefore, forms part of the said Flat Bed Screen Printing Machine. Consequently, the appellants were entitled to import the same under O.G.L. vide Appendix 10(1) of AM 1982-83. It was also claimed by him that since the said component forms part of the said Flat Bed Screen Printing Machine, which according to him falls under Heading 84.40, the intitial setting-up or for the assembly for the manufacture of which they are undertaking, as submitted above, they were entitled to the benefit of concessional rate of duty of customs in respect of the imported goods under Notification No. 179/80, dated 4-9-1980. Attacking the findings of the Collector (Appeals), he submitted that, he failed to appreciate that the said Notification No. 179/80 covers the very parts required for the purpose of initial setting-up or for the assembly or manufacture of any article falling, inter alia under Heading 84.40. It was stressed by him that the Collector (Appeals) whilst accepting that it could not be disputed that the Textile Commissioner had certified that the subject goods, namely, Maccanofilm Programme Computer formed a component part of the Flat Bed Screen Printing Machine, erred in holding that the Deputy Collector who has to satisfy himself in terms of the said Notification, cannot merely base his satisfaction on the certification of the Textile Commissioner who is not necessarily an expert in the interpretation of the Customs Tariff. Attacking the other findings of the authorities below that the subject goods were not eligible for clearance without O.G.L., it was contended by him that they erred in holding that entry 508 in Appendix No. 3 covered the subject goods. In reply, Shri M.S. Arora, learned JDR, supported the impugned Orders stressing that the said Notification No. 179/80-Cus., dated 4th September,1980 is a conditional one as it exempts parts required for the purpose of initial setting up, or for the assembly or manufacture of any article falling under the Heading specified therein and this should be proved to the satisfaction of the Assistant Collector of Customs. Since, in the instant case the subject goods are neither parts nor fall under Heading 84.40(1), the appellants were rightly denied the benefit of the said Notification.
4. We have considered the submissions.
5. As regards the availability of benefit under Notification No. 179/80 Cus., dated 4-9-1980.
Notification No. 179/80-Cus., dated 4-9-1980 is a conditional one. It provides for concessional rate of duty on parts required for the purpose of initial setting up, or for the assembly or manufacture of any article falling under the Headings mentioned therein. The appellants are claiming the classification of the imported goods under Heading 84.40(1) because it falls under the said Notification whereas the authorities below have classified the goods under Heading 84.51/55. The description of the subject goods given in the Bill of Entry is "one unit" Maccanofilm Programme Computer". The authorities below have classified the same under Heading 84.51/55 against the claim of the appellants for its classification under Heading 84.40(1). In support of this proposed classification under Heading 84.40(1), the case of the appellants is that this is not the conventional computer but an integral part of the textile manufacturing machine and as such should be assessed under the said Heading, as that for the parent machine. Here the Chapter Note No. 3 to Chapter 84 is relevant. It provides that:-
"Unless the Headings otherwise require, composite machines consisting of two or more machines fitted together to form a whole and other machines adapted for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function."
Heading 84.51/55 reads as follows -
"84.51/55. Typewriter's, other than typewriters incorporating calculating mechanisms; cheque-writing machines; calculating machines; accounting machines, cash registers, postage-franking machines, ticket issuing machines and similar machines, incorporating a calculating device; automatic data processing machines and units thereof; magnetic and optical readers, machines for transcribing data on to data media in coded form and machines for processing such data, not elsewhere specified or included; other office machines (for example, hectograph or stencil duplicating machines, addressing machines, coin-sorting machines, coin-counting and wrapping machines, pencil sharpening machines, perforating and stapling machines); parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with the above machines:
(1) Not elsewhere specified 100% (2) Automatic data processing machines and units thereof; 100% magnetic and optical readers, machines for transcribing data on to data media in coded form and machines for processing such data, not elsewhere specified or included, parts and accessories suitable for use solely or principally with the machines falling within this sub-heading."
From the definition, as given above, it is clear that "Automatic data processing machines" occurring in Heading 84.51/55 do not merely encompass the digital machines with storage capacity for machine instructions, programme instructions, and data to be processed; but also include analogue machines comprising analogue elements, control elements and programming elements. It further stipulates that even where such units were imported separately their classification would remain under it, that is to say, Heading No. 84.51/55. The Collector (Appeals) observed that, "The appellants have been at pains to explain that the impugned goods are not computers in the conventional sense. It is also claimed that the computer is not an independent unit but an essential, integrated part of a large textile machinery, fit for captive use in such machinery alone. In paragraph-F of the appeal memorandum, a quotation is given from the literature which shows that the computer imported by the appellants included or is equipped with a micro-processor....The Chapter Note, quoted above, has already taken care of both these submissions. The description in the Entry No. 84.51/55 is wide enough to include the apparatus imported by the appellants. Its classification under Heading No. 84.51/55 is correct." After giving our due consideration to the arguments advanced by both sides, as above, we find that the said finding and observation of the Collector (Appeals) are in consonance with the Tariff Heading under reference. And since the question of application of Notification No. 179/80-Customs is available only to goods classifiable under Heading 84.40(1), the benefit of the said Notification was rightly denied to the appellants. The contention of the appellants that the certificate of the Textile Commissioner entitles the appellants for the benefit of the said Notification cannot be accepted. The said Notification No. 179/80-Customs, dated 4-9-1980 is a conditional one. For claiming the benefit under it, it must be proved that -
(1) the goods (parts) imported are required for the purpose of initial setting up or for the assembly or manufacture of any article falling under the Headings mentioned therein; and (2) it must be proved to the satisfaction of the Assistant Collector of Customs to be so required for such setting up, removal or manufacture subject to the condition that the authorities mentioned therein (Textile Commissioner or any officer below the rank of the Assistant Director) is satisfied and certifies in such case that the parts in question are or will be required for the purpose specified above and recommend grant of the above exemption.
6. From the above, it is clear that, the Textile Commissioner or the Assistant Collector has to satisfy and certify that the parts in question are or will be required for the purpose specified above and recommend accordingly. He has nothing to do with the classification of the imported goods (parts) under the Customs Tariff Act and rightly so because that is the exclusive jurisdiction of the Customs Authorities under the Act. To be terse on the point, the jurisdiction to classify the imported goods under the Act is of the Customs Authorities and in terms of the said Notification No. 179/80-Cus., dated 4-91980 the Textile Commissioner or the Assistant Director has to satisfy and certify only that the imported parts in question are or will be required for the purpose specified in the Notification , that is to say, for the purpose of initial setting up or for the assembly or manufacture of an article and then to recommend accordingly. His recommendations in this regard are not final so far as the question of classification is concerned. Therefore, the observations of the Collector (Appeals) that "the Assistant Collector who according to the subject notification has to be satisfied, cannot merely base his satisfaction on the certification of the Textile Commissioner who is not necessarily an expert in the interpretation of the Customs Tariff. In other words, the computer imported by the appellants may be an integral part of the machine manufactured by them, but not so for the purposes of the subject Notification" is to be upheld.
7. As regards the ITC angle Against the contention of the appellants that the subject goods were covered under OGL, the Collector (Appeals) while approving the findings of the Deputy Collector observed that "the lower authority has held that the Entry 508 in Appendix No. 3, namely, 'electronic equipment/system covers the impugned goods thereby excluding the appellants' claim for importation under Appendix 10(1). Of their own admission, the appellants' imports are equipped with micro-processors. The literature produced by the appellant does not go to negate the presumption that the impugned goods are electronic equipment/system. On this count also, I have no option but to uphold the belief of the lower authority that the impugned goods are not eligible for clearance under OGL". However, after agreeing with the lower authority that the goods were not eligible for clearance under OGL, the Collector (Appeals) remitted the entire redemption fine imposed in lieu of confiscation observing as follows:
"Having held that, I cannot overlook the submissions made by the appellants that similar goods when previously imported by them were allowed clearance under O.G.L. The photo-copy and the original of Bill of Entry, Cash No. 3400 dated 28-12-1981 establishes this claim. The observation of the lower authority made in his order that the previous imports were cleared not under O.G.L. but against a specific licence is clearly wrong. The appellants cannot be blamed for their belief that the subject goods were eligible for clearance under the O.G.L. Here, I must make another observation. The Bill of Entry, in this case was filed on 8-10-1982. The Show Cause Notice was issued to the appellants on 9-81983. The appellants' reply to the Show Cause Notice was within a week of the receipt of the Show Cause Notice. The lower order was issued two months thereafter. The clearance under O.G.L. of the previous import earned a fine of Rs. 60,000/- for the importers and the unwarranted delay on part of the lower authority earned for them not only a demurrage of about Rs. 30,000/- but also the threat from the B.P.T. that the impugned goods were scheduled for auction shortly. While I, uphold the logic of the lower authority, I view with displeasure the inordinate delay in completion of formalities in regard to these good. I, therefore, deem it fit to remit the fine of Rs. 60,000/imposed by the lower authority in full."
8. The Revenue has not filed any appeal or cross-objection against the said part of the impugned Order-in-Appeal whereby the Collector (Appeals) has remitted the full redemption fine.
9. In view of the above, the question as to whether the import in question was covered under OGL or not has become to be of academic interest. However, to complete the record, we find no substance in the submissions made by the learned counsel for the appellants that the import in question was covered under OGL for the reasons mentioned by the authorities below which are not required to be repeated here, since we are affirming the findings on this count.
10. In the result, we reject the appeal being devoid of any merit.
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(G.P. Agarwal)
Dated: 24-3-1993 Member (J)
S.K. Bhatnagar, Vice President
11. With due respects to Hon'ble Judicial Member, my views and orders in the matter are as follows:
12. I observe that in this case, the imported item is one Unit of Maccanofilm Programme Computer. Its clearance has been claimed under OGL on one hand and under Notification No. 179/80 on the other, as part of "Flat Bed Screen Printing Machine" and the issue has been decided on the basis of catalogue/literature produced before the authorities below.
13. The importers had claimed, inter alia , that they are manufacturing Flat Bed Screen Printing Machine under collaboration with M/s. Reggiani Macchine of Italy and their technical know-how agreement was approved by Department of Industrial Development. It was with reference to this background that I observe that there is nothing to indicate from the order whether the Flat Bed Screen Printing Machine was examined and its classification determined at any stage by the Customs.
14. On the other hand since the Notification 179/80 refers to Tariff Heading 84.40(1) ibid and both the Department as well as the assessee have merely examined the issue from the point of view of determining whether the imported item was a component or essential part of the machine of the main printing machine without determining whether the main printing machine was itself classifiable under 84.41. Since it was not an imported item, it was obviously not before the Customs at the Port and could be examined, if necessary, only at the site.
15. The pamphlet produced before us titled "REGGIANI MACCHINE" - The Flat bed of the Eighties - Rembrandt", indicates, inter alia, that "the printing units are engineered to be coupled with the computer for their positioning on the printing table by servo-motors and guides sliding on racks. A pneumatic locking system sets them most precisely in their working position."
15.1 "Squeegee process entirely interlocked with a micro-processor to provide succession according to the basic parameters selected on the panel of each printing unit".
15.2 It further mentions that "absolutely dependable digital hardware is the technological support for receiving inter-active software by Reggiani Macchine for their Flat Screen Printing Machines of the Rembrandt series". The basic software is able by itself to allow self-repeat setting, printing, cycle programming, continuous single unit printing and sophisticated process diagnosis.
15.3 "Software extension is available also to be interfaced with computerized systems for integrating the printing machine data by planning programs, plant activity and management control. . . ."
16. In view of this pamphlet/catalogue, the appellants' claim could not be lightly brushed aside merely because the imported computer could otherwise be classified on merits under 84.51/55. And it was necessary to examine physically whether the main machine manufactured by the appellants could be classified under 84.40(i) and the imported item could be treated as an integral component/part of that machine. The background provided by the approval of the technical know-how programme and the Textile Commissioner's Certificate was also required to be kept in view although they were not the final determinants.
17. In this respect, while I entirely agree, in principle, with the observation of my learned colleague in paragraph-6 of this order and hold that the final decision regarding classification and applicability of exemption Notification or otherwise and so also legality or otherwise of importation rests with the Customs. All the same since the aspects discussed above do not appear to have received sufficient attention at the hands of the lower authorities, I consider that the impugned orders are required to be set aside, and the matter is required to be remanded for de novo consideration in accordance with the law and the above observations.
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(S.K. Bhatnagar)
Dated: 20-8-1993 Vice President
DIFFERENCE OF OPINION
In view of the difference of opinion between the Hon'ble Judicial Member and the Vice President, the matter is submitted to Hon'ble President for reference to a third Member on the following point:
"Whether in the facts and circumstances of the case, the imported item is required to be classified on merits under 84.41 and held to be ineligible for exemption and OGL benefit claimed or the impugned order was to be set aside and the matter required to be remanded for de novo consideration in the light of the observations made by the Vice President and the law."
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(G.P. Agarwal) (S.K. Bhatnagar)
Dated: 20-8-1993 Member (J) Vice President
Harish Chander, President
18. There is a difference of opinion between Shri S.K. Bhatnagar, Vice-President and Shri G.P. Agarwal, Member (Judicial). The following point of difference has been referred to me:-
"Whether in the facts and circumstances of the case, the imported item is required to be classified on merits under 84.41 and held to be ineligible for exemption and OGL benefit claimed or the impugned order was to be set aside and the matter required to be remanded for de now consideration in the light of the observations made by the Vice President and the law."
Learned brother Shri S.K. Bhatnagar, Vice President as well as Shri G.P.Agarwal, Member (Judicial) have narrated the facts and as such, I need not reproduce the same. Shri Vikram Nandrajog, learned advocate has appeared on behalf of the appellants. He reiterated the facts. The learned advocate pleaded that the appellants had imported one unit of Maccanofilm Programme Computer and had claimed its clearance under O.G.L. vide Appendix 10(1) of AM 1982-83 and had also claimed the benefit of Notification No. 179/80-Cus., dated 4th September, 1980. He further argued that the appellants had claimed assessment under Heading 84.40 which is machinery for washing, cleaning, drying, bleaching, dyeing, dressing and finishing etc., whereas the Revenue has assessed the same under Heading 84.51/55 which is Typewriters, other than typewriters incorporating calculating mechanisms etc.. He argued that the differentia] duty comes to Rs. 67,306.22. He pleaded that the computer which is in dispute here is an integral part of the machine and it was imported from the collaborator and the computer cannot function independently. He pleaded that computer is an integral part of the machine and falls under O.G.L. and the appellants are entitled to the benefit of notification. He relied on the order passed by the learned Vice-President and pleaded for the remand of the matter.
19. Shri K.K. Jha, the learned SDR who has appeared on behalf of the respondent pleaded that the classification as ordered by the Revenue is correct. He referred to Heading 84.51/55 and also Heading 84.40 which has been claimed by the assessee. He relied on the order passed by learned Member (Judicial) and pleaded that it is a correct order. He also pleaded that the observations of the adjudicating authority that it is not a component part is not correct. He referred to internal page 3 of the Collector (Appeals)' order and he opposed the remand.
20. In reply, Shri Vikram Nandrajog, learned advocate referred to Note 3 of Section XVI of the Chapter which lays down that "Unless the Headings otherwise require, composite machines consisting of two or more machines fitted together to form a whole and the machines adapted for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function."
21. I have heard both the sides and have gone through the facts and circumstances of the case. It is an admitted position that the appellants had imported the unit of Maccanofilm Programme Computer by Ex.s.s. Mount Sabas vide Bill of Entry No. 1668/25 and had claimed assessment under Heading 84.40. The adjudicating authority on internal page 3 of its order which appears on page 38 of the paper book has observed as under:-
"Technically the goods imported are a computer. Whether digital or analogue programming, has no relevance to the imported goods which are covered by definition of computer system vide para 5(b) of the relevant policy. The importer in their reply to show cause notice have not refuted this charge. The end-use of this item shown at the letter referred to above cannot take this item out of the scope of Chapter 5 of the relevant policy. They have also not replied to the charge that the item being electronic equipment/system is covered by Appendix 3 Entry No. 508 of AM 83. On earlier occasion they had cleared this under specified licence.
As regards the item whether it is a component of the machine claimed or not, they have produced only Textile Commissioner Certificate but till now they have not produced any catalogue literature of the machine of which these are claimed components to show the use of this computer in that machine. The leaflet produced does not show the use of this item in the machine. Also the drawings for computer do not have any reference to use of this item with the machine claimed. There are two disputes. First one is regarding ITC angle. In past, importer, himself has got the specific licence and claimed the goods against it. However, now he is claiming under OGL.
Second problem is regarding benefit of Notification 179/80. Importer has produced the certificate from Textile Commissioner. However, he has not been able to clearly explain how the goods are components for the end claimed. Leaflet/drawing of the end product have not been produced so far."
22. I have perused the order passed by the Collector (Appeals). Relevant extracts from the order on the classification aspect are reproduced below:-
"The dual issue raised by the appellants has to be settled only on identification of the character of the impugned goods. The description in the Bill of Entry is "one unit" Maccanofilm Programme Computer". What the appellant's claim is, that this is not the conventional computer but an integral part of a textile manufacturing machine and as such should be assessed under the said tariff classification as that for the parent machine. The Chapter Note No. ... Chapter-84 of the C.T.A. is relevant here. In this, the expression "Automatic data processing machines" occurring in Heading No. 84.51/55 has been defined in scope. The definition given therein does not merely encompass the digital machines with storage capacity for machine instructions, programme instructions, and data to be processed; but also includes analogue machines comprising analogue elements, control elements and programming elements. It further stipulates that even where such units were imported separately their classification would remain under Heading No. 84.51/55. The appellants have been at pains to explain that the impugned goods are not computers in the conventional sense. It is also claimed that the computer is not an independent unit but an essential, integral part of a larger textile machinery, fit for captive use in such machinery alone. In paragraph-F of the appeal memorandum, a quotation is given from the literature which shows that the computer imported by the appellants includes or is equipped with a micro-processor. In the post-hearing written submissions also this point has been emphasised. The Chapter note, quoted above, has already taken care of both these submissions. The description in the Entry No. 84.51/55 is wide enough to include the apparatus imported by the appellants. Its classification under No. 84.51/55 is correct. The question of application of Notification No. 179/80-Customs, which is available only to goods classifiable under No. 84.40(1), thus does not arise in the case of the impugned goods."
23. Learned Member (Judicial) Shri G.P. Agarwal, while dealing with the issue of classification has observed as under:-
"After giving our due consideration to the arguments advanced by both sides, as above, we find that the said findings and observation of the Collector (Appeals) are in consonance with the Tariff Heading under reference. And since the question of application of Notification No. 179/80-Customs is available only to goods classifiable under Heading 84.40(1), the benefit of the said Notification was rightly denied to the appellants."
In para 6 of his order, Member (Judicial) has held that the appellants are not entitled to the benefit of Notification No. 179/80-Cus., dated 4-9-1980. For proper appreciation of the legal position, Tariff Headings 84.40 and 84.51/55 are reproduced below:-
"84.40 - Machinery for washing, cleaning, drying, bleaching, dyeing, dressing, finishing or coating textile yarns, fabrics or made-up textile articles (including laundry and dry-cleaning machinery); fabric folding, reeling or cutting machines; machines of a kind used in the manufacture of linoleum or other floor coverings for applying the paste to the base fabric or other support; machines of a type used for printing a repetitive design, repetitive words or overall colour on textiles, leather, wall-paper, wrapping paper, linoleum or other materials, and engraved or etched plates, blocks or rollers therefor:
(1) Not elsewhere specified (2) Domestic washing machines, laundry and dry-cleaning machinery."
"84.51/55 - Typewriters, other than typewriters incorporating calculating mechanisms; cheque-writing machines; calculating machines; accounting machines, cash registers; postage-franking machines, ticket issuing machines and similar machines, incorporating a calculating device; automatic data processing machines and units thereof; magnetic and optical readers, machines for transcribing data on to data media in coded form and machines for processing such data, not elsewhere specified or included; other office machines (for example, hectograph or stencil duplicating machines, addressing machines, coin-sorting machines, coin-counting and wrapping machines, pencil sharpening machines, perforating and stapling machines); parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with the above machines:
(1) Not elsewhere specified;
(2) Automatic data processing machines and units thereof; magnetic and optical readers, machines for transcribing data on to data media in coded form and machines for processing such data, not elsewhere specified or included, parts and accessories suitable for use solely or principally with the machines falling within his sub-heading.
24. A perusal of the Headings show that Heading 84.51/55 as adopted by the Revenue and upheld by Member (Judicial) is more appropriate. For identifying and classification of the goods, we have to look at the goods imported as they are. The end-use is not relevant. Australian Tribunal in the case of Oes Holdings and Collector of Customs reported in 1982 (5) ALD 58 had held as under:-
"The intention of a manufacturer or producer or maker of an article is not relevant for classification. It was assumed in the case of a brush to which was integrally attached a spray cylinder that the manufacturer intended to establish an additional market for the erosol dispenser (spray cylinder), but it was held that it could not control the classification of the goods."
The Tribunal in the case of Collector of Customs, Madras v. M/s. Raj Continental Exporters Private Limited reported in 1986 (25) E.L.T. 373 (Tri.) in para 4 had held as under:
* * * * * * *
25. In view of the above discussion, I am of the view that the correct classification of the product in dispute would be under Heading 84.51/55.
26. Now, coming to the extending of benefit of Notification No. 179/80Cus., dated 4-9-1980, it is available only to the goods classifiable under Heading 84.40 (1). The Notification No. 179/80-Cus., dated 4-9-1980 is a conditional notification and for claiming the benefit under it, it must be proved that -
(1) the goods (parts) imported are required for the purpose of initial setting up or for the assembly or manufacture of any article falling under the Headings mentioned therein; and (2) it must be proved to the satisfaction of the Assistant Collector of Customs to be so required for such setting up, removal or manufacture subject to the condition that the authorities mentioned therein (Textile Commissioner or any officer not below the rank of the Assistant Director) is satisfied and certifies in each case that the parts in question are or will be required for the purpose specified above and recommend grant of the above exemption.
27. A perusal of Notification No. 179/80-Cus., dated 4-9-1980 shows that the benefit is only available if the goods imported fall under Heading 84.40. Since I have upheld the classification under Heading 84.51/55 which does not find place in the notification and as such, the question of extending the benefit of Notification No. 179/80-Cus., dated 4-9-1980 does not arise at all. Now, coming to the ITC angle, the appellants' main plea is that the goods are covered under OGL. The Collector (Appeals) had confirmed the findings of the Deputy Collector and had observed that "the lower authority has held that the Entry 508 in Appendix No. 3, namely, 'electronic equipment/systems covers the impugned goods thereby excluding the appellants' claim for importation under Appendix 10(1). Of their own admission, the appellants' imports are equipped with micro-processors. The literature produced by the appellants does not go to negate the presumption that the impugned goods are electronic equipment/system. On this count also, I have no option but to uphold the belief of the lower authority that the impugned goods are not eligible for clearance under OGL". Member 0udicial) in his order has reproduced the observations of the Collector (Appeals) while remitting the redemption fine and as such, I need not reproduce the same. I am of the view that the goods do not fall under OGL.
28. In view of the above discussion, the point referred to me is answered accordingly. I concur with the views and reasons expressed by Member (Judicial). Registry is directed to place the matter before the Bench which has passed the order originally, for passing appropriate orders in accordance with law.
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(Harish Chander)
Dated: 31-1-1995 President
FINAL ORDER
In view of the majority opinion, the appeal is rejected.
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(G.P. Agarwal) (S.K. Bhatnagar)
Dated: 14-3-1995 Member (J) Vice President