Customs, Excise and Gold Tribunal - Delhi
Collector Of Customs vs Enfield India Ltd. on 9 September, 1996
Equivalent citations: 1997ECR382(TRI.-DELHI), 1996(88)ELT693(TRI-DEL)
ORDER Shiben K. Dhar, Member (T)
1. This Revenue appeal is directed against the Order-in-Appeal No. C/3/528/86, dated 3-10-1986 of Collector of Customs (Appeals), Madras.
2. The respondents imported "con rod forgings for motor cycles". The goods were assessed to duty under Heading 84.06 CTA, 1975 and under Item 27(b) CET for countervailing duty. The respondents subsequently filed the claim for refund on the ground that the goods were liable to be assessed to duty under CTA, 76.08/16.
3. Arguing for the appellants, the learned DR submits that the goods were connecting rod forgings for motor cycles. The goods had already been in the shape of finished articles and the fact that certain operations like drilling, grindings, facing, fixing a bush etc. were subsequently carried out would not take them out of the category of finished articles in terms of Interpretative Rule 2(a). In this connection he cites in support the case of Collector of Customs, Bombay v. Bajaj Auto Ltd., and Final Order No. C/28-35/94-B2 which relied on earlier order of the Tribunal in the case of Bajaj Auto Ltd. v. Collector of Customs as reported in 1988 (33) E.L.T. 367 (Tribunal).
4. Arguing for the respondents, the learned Advocate submits that in their own case on an identical issue i.e. classification of forging connecting rods the Tribunal in the case of Enfield India Ltd. v. Collector of Customs - 1989 (42) E.L.T. 494 had held that rough forgings of aluminium do not have essential character of finished connecting rods, and, therefore, are classifiable under Heading 78.08/16 of CTA, 1975. He also draws out attention to earlier order of the Tribunal in their own case (Order No. 537/86-B2, dated 11-6-1986). He submits that in this earlier order the Tribunal had examined in detail the various processes to which these connecting rods were subjected to subsequent to importation and had come to the conclusion that these had not attained the essential character of finished articles.
5. We have heard both sides. We find that in their own case for the same goods the Tribunal in order reported in 1989 (42) E.L.T. 494 held that rough forgings of aluminium do not have essential character of finished connecting rods and, therefore, would be classifiable under Heading 76.08/16 of CTA, 1975. The Tribunal inspected two samples of the goods as imported, and as they became as such after post-importation operations, and held that the goods imported were only rough forgings and they had not undergone any further processing abroad. The forgings as imported had not attained the proximate shape and outline of finished connecting rods; they were only rough forgings of aluminium and nothing more. The fact that they had no other commercial use except processing into finished part of machinery was not considered determination of the issue in that case. While arriving at this conclusion the Tribunal relied on an earlier order in the case of same appellants in Order No. 537/86-B, dated 17-6-1986. We find that in an earlier Order No. 537/86-B2, dated 17-6-1986, the Tribunal had examined in detail the various operations to which the goods were subjected. The operations were drilling, turning, spot facing etc.
6. The circumstances under which the goods have to be examined with reference to provisions of Rule 2(a) came up for detailed examination before the larger bench of the Tribunal in the case of Bharat Heavy Electricals Ltd. v. Collector of Customs - 1987 (28) E.L.T. 545. The Tribunal held that in order to apply the provisions of Rule 2(a) it has to. be seen whether the imported product had attained the proximate shape or outline of the finished articles. Considering the extent and nature of operations which the learned Advocate submits are the same as were discussed in Tribunal's Order 537/86-B2, dated 17-6-1986, we are of the view that these operations are not simple operations and in the form in which the goods are imported, the goods cannot be considered to have attained the proximate shape and outline of the finished product.
7. How forgings are to be classified in the light of Rule 2(a) again come up for detailed discussion in a recent order of the Tribunal (C/193/95-B2, dated 12-5-1995) reported in 1995 (78) E.L.T. 689 (Tri.). The Tribunal considered number of cases such as TELCO v. Collector of Customs - 1990 (50) E.L.T. 571; Shivaji Works Ltd. v. Collector of Central Excise -1994 (69) E.L.T. 674 and Aravali Forgings Ltd. v. Collector of Central Excise -1994 (70) E.L.T. 693. The Tribunal in that case held that the Collector had satisfied himself after examining the goods that in view of the various processes that required to be carried out on the imported goods, the imported goods had not attained the semi-finished stage and did not satisfy the Interpretative Rule 2(a) and confirmed the findings arrived at by the Collector. The Tribunal agreed with the findings in the light of various judgments cited before the Tribunal.
8. It is true that the Tribunal in the case of Bajaj Auto Ltd. - Order Nos. C/28-35/94-B2 held that connecting rod forgings had attained the character of finished goods. In case of Madras Luka Steel - Order No. C/193/95 the Tribunal had examined the case of Bajaj Auto Ltd. and in the light of various judgments discussed in that order had come to the conclusion that the decision in the case of Bajaj Auto Ltd. was distinguishable. We find that there had been series of decisions in case specifically for the respondents themselves where the Tribunal after examination of samples of connecting rods found that the goods as imported had not attained the proximate shape and outline of the finished articles. The Collector (Appeals), has held that the impugned goods viz., aluminium alloy ingot in crude form for making connecting rod used as a component for IC Engines have to undergo a number of processes viz., drilling, grindings, facing, fixing a bush etc., various engineering properties like correct spot facing to minimise friction and consequent strain, proper tempering to attain the essential characteristic of the end-product. In the circumstances, the impugned goods cannot be deemed to be an incomplete or unfinished article having the essential character of the complete or finished article to apply Rule 2(a) of the Interpretative Rules for assessment under 84.06 CTA as components of IC Engines. When a finding of fact is sought to be dislodged by the Revenue, they ought to have produced categorical evidence in rebuttal. We find no such evidence has been produced before us. A finding of fact arrived at by an authority cannot be dislodged merely by an assertion to the contray. Considering the various post-importation operations to which impugned goods have to be subjected to and the various decisions including decisions directly relating to the respondents themselves, we are of the view that the impugned goods are correctly classifiable under Tariff Item 7608/16 of CTA. In the result, for the reasons mentioned here in before, we reject, the Revenue appeal and uphold the impugned order.