Customs, Excise and Gold Tribunal - Tamil Nadu
Sterling Computers Ltd. vs Collector Of Customs on 16 October, 1992
Equivalent citations: 1993ECR260(TRI.-CHENNAI), 1993(67)ELT673(TRI-CHENNAI)
ORDER S. Kalyanam, Member (J)
1. This is an application for waiver of pre-deposit of a differential duty of Rs. 95,86,883/- levied on the petitioner under the impugned order of the Collector of Customs, Madras, dated 12-12-1991.
2. Shri L.P. Asthana, the learned Counsel for the petitioners submitted that the petitioners imported Printer Mechanism assembly which is a part of Dot Matrix Printer which the petitioners are manufacturing. The petitioners claimed the benefit of exemption Notification 349/86 dated 16-6-1986. The adjudicating authority denied the petitioners the benefit of this Notification on the ground that out of 69 parts listed in the parts catalogue of printer mechanism assembly, only one part viz. paper end sensor assembly was an electronic part and the petitioners having imported the same along with other parts of printer mechanism assembly parts, it would disentitle the petitioners to the benefit of the exemption Notification in question. The learned Counsel further submitted that when the parts of printer mechanism assembly have been imported in the past without the paper end sensor assembly the Department allowed clearance of the other goods (without the electronic part viz paper end sensor assembly) giving the petitioners the benefit of Notification in question. The learned Counsel further submitted that the Customs Department admittedly in respect of 500 printer mechanism assembly, imported on 13-2-1991 under BE 05137 and 05138 without end sensor assembly had permitted clearance of the same by giving the importer the benefit of Notification cited supra. It was therefore urged that in accordance with the practice of the Department as referred to above, the Department should atleast permit clearance of the other goods by giving the petitioners the benefit of the exemption Notifica tion cited supra and should not deny the benefit of the Notification to the other goods except the electronic item viz. 'paper end sensor assembly' the value of which is negligible. On this prima facie ground the learned Counsel assailed the correctness of the impugned order and prayed for waiver of pre-deposit of duty pending appeal. The learned Counsel further referred to the letter of the Department of Electronics of the Govt. of India dated 28-12-1990 granting a certificate in terms of the Notification 349/86 certifying that the goods are required for the manufacture of computer dot matrix printers and are eligible for the benefit of the said Notification. The learned Counsel contended that in the light of this clarification, the goods imported by the petitioners viz printer mechanism assembly by excluding the electronic parts should be allowed clearance inasmuch as the electronic part viz paper end sensor assembly is not an integral part of the printer mechanism assembly. The learned Counsel also dilated on the canons of interpretation as laid down in the various pronouncements and in particular the ratio of the ruling of the Supreme Court in the case reported in 1989 (43) E.L.T. 811 in the case of CC v. K. Mohan & Co. Exports, and in the case reported in 1990 (47) E.L.T. 500. It was urged that as per the ratio in these rulings an interpretation which would lead to an inequitable and incongruous situation should not be adopted by the Department and if the Notification is properly construed and interpreted the assessee would get the benefit of Notification. It was further urged that it is for the Department to prove that the items that are excluded are covered by the mischief of Notification cited supra. The learned Counsel did not put forth any plea of financial hardship except merely stating that the liquidity position is not satisfactory.
3. Shri Sundaram, the learned Central Govt. Standing Counsel appearing on behalf of the Department filed a detailed affidavit sworn by the Assistant Collector of Customs, Madras setting forth the circumstances in which the earlier clearances of the goods were permitted by the Department and urged that averments in the affidavit filed by the Assistant Collector would clearly bear out that the Department allowed clearance only on provisional assessment basis without giving the benefit of Notification to the assessee in respect of the import of printer mechanism assembly containing electronic parts viz. paper end sensor assembly. The learned Counsel further referred to the wording of the Notification in question and contended that printer mechanism assembly is one of the parts of serial prints and import of such goods will be eligible for exemption only if they do not contain electronic part, other than parts containing thermionic valves or transistors or other semi-conductor devices or light emitting diodes or electronic micro-circuits or capacitors. The learned Counsel urged that admittedly in the present case, one of the items imported was electronic item viz. paper end sensor assembly and apart from this, the goods also have been specified as printer mechanism in the invoice as well as in the BE and, therefore, it would not be proper at this interlocutory stage to dissect the notification with reference to various parts imported and segregate the parts by giving the benefit to the petitioners in respect of the non-offending parts. The learned Counsel further submitted that the Notification cannot be interpreted in such a way as above since the Customs Appraising Officer has to adjudge the eligibility of the petitioners to the benefit of the Notification in respect of the imported goods without dissecting various parts to construe the eligibility of each part to the benefit of the Notification. The learned Counsel further submitted that the statutory authority cannot go beyond the confines of the wording of the Notification and give benefit to the assessee. So far as the Department permitting clearance of 500 numbers of printer mechanism without paper end sensor assembly, the learned Counsel submitted that he is personally of the view that the said clearance should not have been permitted and at any rate in those imports there were no electronic parts as in the present case and distinguished the present import from the earlier one. Even if the clearance of the said 500 numbers had not been in conformity with law, that could not be cited as a precedent for the clearance of the goods in question in the present case as electronic parts have been imported which are clearly excluded from the purview of the Notification in question. The learned Counsel further submitted that the party has not put forth any plea of financial hardship and prayed that the issue should be dealt with in accordance with law.
4. We have carefully considered the submissions made before us. For the limited purpose of stay application, the only short question that arises for our consideration is whether prima facie the impugned order is sustainable on grounds of law or on facts and whether the petitioners prima facie would be entitled to the benefit of the exemption Notification No. 349/86. For the purpose of convenience, we reproduce the Notification hereunder :
"Exemption to specified parts falling within Chapter 84 or 85 for manufacture of electronic goods - In exercise of the powers conferred by Sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), the Central Govt. being satisfied that it is necessary in the public interest so to do hereby exempts the parts (other than parts containing thermionic valves or transistors or other semi-conductor devices or light emitting diodes or electronic micro-circuits or capacitors (other than paper capacitors) of the goods specified in the Table hereto annexed and falling within Chapter 84 or Chapter 85 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India for the purpose of manufacture of the said goods and proved to the satisfaction of the Assistant Collector of Customs to be so required, for such manufacture, from so much of that portion of the duty of customs leviable thereon which is specified in the said First Schedule, as is in excess of the amount calculated at the rate of 30 per cent ad valorem subject to the following conditions namely:
(i) an officer not lower in rank than a Joint Director in the Department of Electronics of the Government of India is satisfied that the goods in question are required for the purpose specified above and certifies to this effect and recommends grant of above exemption;
(ii) the importer shall, by the execution of a bond in such form and for such sum as may be specified by the Assistant Collector of Customs, bind himself to pay, on demand in respect of such goods as are not proved to the satisfaction of the Assistant Collector to have been used for the purpose of such manufacture an amount equal to the difference between the duty leviable on such goods but for the exemption contained herein and that already paid at the time of importation."
TABLE Sl. No. Description of goods
1. xxxxxxxxxx
2. Serial printers (including Dot Matrix Printers and Daisy Wheel Printers) 3 to 21 xxxxxxxxxx It is admitted that the petitioners imported printer mechanism assembly as evidenced by the catalogue, BE and invoice. Paper end sensor assembly is one unit. It is not disputed that paper end sensor assembly which is an electronic part is not covered by the Notification in question. The question as to whether all other parts could be given the benefit by excluding the electronic part viz. paper end sensor assembly and whether the Notification should be construed in such a way, would require an in depth study and analysis which is not permissible at this interlocutory stage and prima facie we do not find any infirmity in the reasoning of the adjudicating authority in regard to the interpretation of the Notification in question. There can be no quarrel with the axiomatic proposition of law enunciated by the Supreme Court in the ruling referred to supra but reliance have no application to the admitted facts and circumstances of this case. In the present case it is not disputed prima facie or disputable that one of the parts i.e. paper end sensor assembly is an electronic part. which has been imported along with other part composite whole or integral part of printer mechanism. The wording of the Notification is very clear that the Notification would not be applicable in respect of import of printer mechanism containing any electronic part. The contention of the learned Counsel for the petitioners that paper end sensor assembly is not part of printer mechanism will have to be examined in detail. Further we also like to take note of the fact that the Department had permitted clearance of 500 numbers of printer mechanism which did not contain the paper end sensor assembly. Keeping all these factors in mind we find that prima facie there is no infirmity in the reasoning of the adjudicating authority and the petitioner would not be entitled to grant of waiver of pre-deposit of duty on prima facie ground. Though no financial hardship has been pleaded before us with reference to any documentary evidence such as Balance sheet, Profit & Loss accounts of the Company, keeping in mind the fact that contentious issues are raised with reference to the scope and interpretation of the Notification in question and the Department also permitted clearance of the goods earlier without the other electronic items and also subsequently on execution of personal bond, we direct the petitioners to make a pre-deposit of Rs. 25,00,000 (Rupees TWENTY FIVE LAKHS) on or before 29th January, 1993 and report compliance subject to which pre-deposit of the balance amount would stand dispensed with pending appeal. We also grant stay of the recovery of the balance amount subject to the petitioners complying with this order. The matter will be called on 29th January 1993 for reporting compliance.