Customs, Excise and Gold Tribunal - Mumbai
Polestar Electronics Pvt. Ltd. vs Collector Of Customs (Airport) on 13 January, 1987
Equivalent citations: 1988(33)ELT373(TRI-MUMBAI)
ORDER K. Gopal Hegde, Member (J)
1. This appeal arise out of and is directed against Order No. S/10-2779/86 ACC(IV), dated 28.10.1986 passed by the Collector of Customs (Airport), Bombay. The appellants M/s. Polestar Electronics Pvt. Ltd. imported 100 pieces of Tape Deck Mechansim and claimed clearance under OGL against Item 565(21) of Appendix 6, List 8, Part-I of the Import Policy 1985-88 (for short the Policy). The Customs, however, objected to the clearance on the ground that the Tape Deck Mechanism contained recording head and four electronic circuitry. The Customs took the view that the imported goods were covered by Entry 610 of Appendix 3 Part-A of the Policy and as such required a valid licence.
2. The Collector of Customs, Airport, who held the enquiry, stated in his order that on inspection of the sample he found that there are four printed circuit boards and one of them has several mounted electronic components and others have connectors and the whole system has been connected through wires. He, therefore, held that the imported equipment is not a mechanical tape deck mechanism but is in the nature of electronic assembly and therefore would be covered by Serial No. 610 of Appendix - 3 Part-A. Having regard to his findings, the Collector ordered confiscation but allowed redemption on payment of fine of Rs. 80,000/-. Feeling aggrieved by the order, as stated earlier, the Company had come in appeal. Shri Mankani vehemently contended the view taken by the Collector, that the goods imported are not tape deck mechanism but are in the nature of electronic assembly, is totally erroneous. He urged that just because a few electronic components were found in the tape deck mechanism, it cannot be classified as an electronic assembly or sub-assembly. Shri Mankani further submitted that what the Collector found are not electronic circuitry but they are P.C. boards and one of the Boards alone has some discreet electronic component. Shri Mankani made a distinction between P.C. Boards and electronic circuitry. He urged that an electronic circuitry is an item having passive components and semi-conductor devices and is capable of passing signals, whereas P.C. Boards found with tape deck mechanism are not independently performing the functions of electronic circuitry, The function of P.C. Board is of connectors only. The Collector has also found out of the four circuits boards three have, connectors and one only has electronic components. It was further urged by Shri Mankani that the total value of each unit would be about Rs. 1600/- to Rs. 1700/- and whereas the value of the P.C. Board with the connector as called electronic circuit is only Rs. 10/-. It was also urged by Shri Mankani that the goods tape deck mechanism is covered by Item 565(21) of Appendix 6, List 8, Part-I. Item 565 of Appendix 6, List 8, Part-I consists of electronic items. Having regard to the heading of the Item 565, if the tape deck mechanism contained a few components of electronic items, it does not cease to be tape deck mechanism. The further submissions of Shri Mankani are, Item 610 of Appendix 3, Part-A specifically excluded items mentioned in Appendix 6, List 8, Part-I and, therefore, even if the imported goods is considered as electronic assembly or sub-assembly, which specifically excluded and therefore the same is eligible for being imported as an OGL item. Shri Mankani also referred to the Public Notice No. 102 of ITC (PN) 85-88, dated 6.6.1986. He urged that by this Public Notice the entries No. 610 of Appendix 3 Part-A has been amended and it was further clarified that the Item 610 of Appendix 3 Part-A would not include items mentioned in Appendix 6, List 8, Part-I. Finally, Shri Mankani submitted that Tape Deck Mechanism would not be complete without connectors and recording head. Tape Deck Mechanism, according to Shri Mankani, is not made up only of mechanical components.
3. Shri Prabhu, appearing for the Collector, submitted that electronic circuits are different from connecting boards. In other respect, he supported the order passed by the Collector.
4. We have carefully considered the submissions made on both the sides. The short question for our consideration is whether the goods imported are Tape Deck Mechanism or Electronic Assembly falling under Item 610 of Appendix 3-A, Part-I.
5. In order to appreciate the contentions it is necessary to refer to the relevant entries of the Policy. The items of raw materials, components and consumables permissible for import under OGL by actual users (Industrial) are set out in List 8 Part-I of Appendix 6. We are concerned with sub-item 21 of Item 565 of the above list. Item 565 reads "Electronic items (other than those in Appendix 3 Part-A)". Sub-item 21 of Item 565 reads "Tape deck mechanism other than those in Appendix 3 Part-A".
6. Appendix 3 Part-A consist of list of limited permissible items of raw materials, components, consumables, tools and spares other than iron and steel and ferro alloys. For our purpose, it is sufficient to refer to Items 609 and 610 of this part. Item 609 reads "All electronic equipment/systems, howsoever, described (including consumer and professional types) excluding those specifically allowed under OGL in this policy or specified elsewhere". Item 610 as it stood on 12.4.1985 and as amended by Public Notice No. 102-ITC(PM)85-88, dated 6.6.1986 are given here-under juxtaposition :
As on 12.4.1985 On or after 6.6.1986
Kits/ready to assemble sets, Kits/ready to assemble sets,
assemblies, sub-assemblies, assemblies, sub-assemblies,
modules, and combination modules, and combination there
thereof of all electronic of consisting of electronic
items (excluding items items (excluding items mentioned
mentioned in Appendix 6 List in Appendix 6 List 8 Part-I)
appearing at S.No. 609 but appearing at S.No. 609 but
nents unless individually individually mentioned elsewhere
mentioned elsewhere in this in this Appendix.
Appendix.
7. In the Policy tape deck mechanism is considered as an electronic item. Its import under OGL is permissible if it is not covered by any of the items appearing in Appendix 3 Part-A. According to the findings of the Collector, the goods imported is covered by Entry 610 of Appendix 3 Part-A.
8. Since the shipment of the impugned goods took place on 26.9.1986, it is the amended Item 610 that would attract and not the Item 610 originally appearing in the policy. The amended Item 610 excluded from its purview the items mentioned in Appendix 6, List 8, Part-I as well as electronic discrete components unless individually mentioned elsewhere in Appendix 3, Part-A. Further, what are included in Item 610 would be kits, ready to assemble sets, assemblies, sub-assemblies, modules and combination thereof consisting of electronic items of all electronic equipments or systems.
9. The combined reading of the Item 565, sub-item 21 of Appendix 6, List 8, Part-I and Items 609 and 610 of Appendix 3, Part-A makes it clear that kits, ready to assemble sets, assemblies, sub-assemblies, modules and combination thereof consisting of electronic items of all electronic equipments and systems cannot be imported under OGL. But then kits, ready to assemble sets, assemblies, sub-assemblies, modules and combination thereof consisting of electronic items and all items in Appendix 6, List 8, Part-I can be imported as OGL items. It is not all assemblies or sub-assemblies or combination thereof consisting of electronic items that are excluded from OGL. Assemblies, sub-assemblies of electronic items of electronic equipments or systems are not allowed to be imported under OGL. It is not the finding of the Collector that the goods imported is an electronic equipment or an electronic systems. His finding was that it is in the nature of electronic assembly. There is no finding that it is an electronic assembly or an electronic equipment or an electronic system. From the order of the Collector, it appears that according to the Collector, tape deck mechanism permitted to be imported under OGL are only those mechanical tape deck mechanisms and not tape deck mechanism containing electronic parts. There is no scope to take such a view. As has been stated earlier, Item 565 of Appendix 6, List 8, Part-I relates to electronic items. So tape deck mechanism appearing in sub-item 21 is an electronic item. According to the finding of the Collector the sample inspected by him contained 4 printed circuit boards and one of them had several mounted electronic components and others have connectors and the whole system has been connected through wires. The Collector nowhere recorded a finding that the tape deck mechanism will not have printed circuit boards or even if they have, they would not be found in the manner they are found in the sample.
10. In McGraw Hill Dictionary of Scientific and Technical terms 3rd edition "tape deck" is described as "a tape recording mechanism that is mounted on a motor board including the tape transport, electronics and controls but no power amplifier or loudspeaker". The Collector did not record a finding that the P.C.B. found in the sample are amplifiers or loudspeakers. Neither the Collector nor the importer had relied on any catalogue or literature. Mere description in the packing list or invoice would not make an item tape deck mechanism if it is not really a tape deck mechanism. The importers should have produced catalogue or literature or some other evidence to establish that what had been imported are tape deck mechanism. Similarly, the Collector, instead of making personal inspection, ought to have got the goods examined by an expert and should have tried to ascertain -what constitutes a tape deck mechanism. He was not right in coming to a conclusion that what was imported was not a tape deck mechanism just because it contained a few electronic components. We are, therefore, of the opinion that the matter requires further consideration.
11. In the result and for the reasons stated above, we allow this appeal; set aside the order passed by the Collector; but remand the matter to the Collector for fresh consideration in the light of the observations contained in this order. The parties are at liberty to adduce fresh evidence.