Customs, Excise and Gold Tribunal - Tamil Nadu
Hogg Electronics Pvt. Ltd. And U.M.S. ... vs Commissioner Of Customs And C.Ex. on 4 February, 1998
Equivalent citations: 1998(60)ECC462
ORDER
T.P. Nambiar, Member
1. These are two appeals directed against the Orders No. 12/88-Cus. dt. 19.1.89 passed by the Collector of Customs. In terms of that order, he confiscated the goods imported by the appellants. The point considered by him is with respect to the character of the goods imported by these two appellants in this case. The appellants claimed the goods to be parts of VCR classifiable under various headings in the Customs Import Tariff attracting duty ranged between 85% + Additional duty.
2. The case of the department is that the impugned goods are VCRs in disassembled condition and since import of VCR is prohibited vide entry at S. No. 146 of Appendix 2, Part B, they are confiscable.
3. In seeking to establish there allegation that the goods are VCRs in SKD condition, the department has placed reliance on the following factors:-
(1) All component parts of VCR in SKD condition have in effect been imported by M/s. UMS Radio Pvt. Ltd., and that part of the imports are shown to have been made by M/s. Hogg Electronics Pvt. Ltd., in order to make it appear as if two independent importers have separately imported certain component parts of VCRs.
(2) That there was a plan entered into by M/s. UMS Radio Factory along with M/s. Hogg Electronics Pvt. Ltd., and with certain other persons to import VCRs in SKD condition under the guise of component parts.
(3) That two models of VCRs were disassembled and packed in such a manner that the goods imported by these parties when combined would make 600 VCRs.
(4) That the assembly of the parts was a simple process, and therefore in terms of the Rules of Interpretation of the Customs Tariff that present goods could be held to be complete VCRs for the purpose of classification there under. It is on record that the coustoms under a mahazar drew representative samples and had two VCRs put together within a short time by means of screw-driver technology.
4. The appellant stated that they are two different entities and the goods imported are under two different Bills of Entry. Therefore, they are parts of VCRs. But this contention was not accepted by the adjudicating authority and the above appeals are filed.
5. The Ld. Sr. Advocate Shri Abibullah Basha appearing for the appellants contended before us that it is an admitted position that these two appellants are independent corporate entity. It was his contention that they have filed separate Bill of Entries and each B/ E must be considered with reference to the licence relating the goods which each of them have imported. He pointed out that merely because UMS Radio Factory was engaged in the manufacture of VCRs it cannot be held that parts which were imported by the appellants M/s. Hogg Electronics is on and on behalf of M/s. UMS Radio factory. In this connection he extensively draw our attention to the decision of the Tribunal reported in 1997 (70) ECR 702 in the case of Vishal Electronics Pvt. Ltd. v. CC Bombay.
6. The Ld. SDR stated that these two companies imported the goods on an understanding that they will later manufacture the VCRs. He in this connection draw our attention to the statement of Shri Bobby Chengappa of M/s. UMS Radio Factory who admitted that they had safely imported the components parts by these companies as their consultant told them that import of one company would lead the costoms to hold that the components so imported were VCRs in SKD condition. He also stated that M/s. UMS purchased these goods from M/s. Hogg Electronics and assembled VCRs by a simple process. He therefore pointed out that the impugned order is legal. He also reiterated the observations in the impugned order and justified the same.
7. We have considered the submissions. The point for determination is whether in this case, the goods are to be treated as parts of VCRs. In this connection, the Ld. SDR cited the decision, which is relied on by the Sr. advocate the Tribunal took note of the decision of the Supreme Court in the case of Tarachand Gupta . In that particular decision, the Supreme Court held that the mere fact that the goods imported by them were so complete that when put together would make them motorcycle and scooters in CKD condition would not amount to a breach of the licence or of Entry 295. In this particular case, it is seen that parts of VCRs are allowed to be imported by these appellants who are admittedly different companies. Therefore, as per the policy they are entitled to import the goods. After the import of the goods they filed separate bills of entry. By filing separate B/E they are two separate importers. What happened after the import is not material for determining whether import at the fame when they were cleared were within the ambit of the licence. In the above cited decision at para 13, the Tribunal held as follows:--
13. There is not dispute that the appellants are actual users industrial. There is no dispute that the goods under the first Bill of Entry are covered by the two REP licences possessed by the appellant and the goods under other Bills of Entry are covered by the respective items against OGL. There is no restriction in any of the items against import of sub-assemblies or assemblies in CKD condition as it existed in the Policy considered in Girdharilal Bansidhar case and Sharp Business Machines case. Our attention has not been invited to any of the provisions relating to OGL stipulating any general restriction. In the circumstances, we are of opinion that each Bill of Entry must be considered with reference to either the licence in case where specific licence is ncessary and in other cases the particular tariff item relating to goods which could be imported and the provisions relating to OGL Department has no case that video cameras are prohibited items. In the absence of prohibition or any specific restriction of the nature referred to above, it is not open to the Department to contend that the goods imported under all the Bills of Entry, if put together would constitute video cameras in CKD condition and the same cannot be imported without specific licence.
8. A perusal of this decision goes to show that each B/e must be considered with reference to either the licence in case where specific licence is necessary and in other cases the particular tariff item relating to goods which could be imported and the provisions relating to OGL. It was also held that it is not open to the department to contend that the goods imported under all the Bills of Entry if put together would constitute video cameras in CKD condition.
9. In that particular case, a common importer imported these parts under two different Bills of Entry. In spite of that the Tribunal held that it was not open to the department to contend that those parts put together will constitute a video camera. But in this case, the case of the appellants are much stronger in view of the fact that these two appellants are separate entities. So when they filed bills of entry in their capacity as importers each bill of entry constitutes a separate import and there is a separate cause of action and each of them in their capacity as different entities are entitled to import parts of VCRs. Ultimately if these parts are put together will constitute a VCR is not a criterion to confiscate the goods. There is no evidence to show-that M/s. Hogg Electronics imported the goods and it was M/s. UMS Radio Factory who paid for the import. There is no such allegation or evidence brought in this regard. Therefore when two different companies import parts of VCRs in their own right as an importer and when they have filed two separate Bills of Entry for clearance of the same, the goods imported by them cannot be confiscated on the ground that ultimately if those parts are assembled together they make a complete VCR. Therefore ratio of the above cited decision squarely applies to the facts of this case and hold that the confiscation is not in order. Accordingly, we allow these appeals and the order of confiscation is set aside.
10. The appeals are allowed with consequential relief to the appellants.