Customs, Excise and Gold Tribunal - Tamil Nadu
Thomson Consumer Electronics India P. ... vs C.C. on 28 October, 2003
Equivalent citations: 2005(98)ECC173, 2004(164)ELT292(TRI-CHENNAI)
ORDER S.L. Peeran, Member (J)
1. The appellants are challenging the Order-in-Original No. 106/98, dated 4-6-98 ordering for confiscation of the seized goods and granting redemption of the same on payment of fine of Rs. 5 lakhs and penalty of Rs. 1 lakh. The appellants had imported parts of audio system in SKD condition. The said assemblies imported required a licence under ITC (HS) Classifications which was not produced. Hence they were issued with show cause notice alleging evasion of duty and also they were alleged that the item is music system classifiable under Heading 8520.33 and the goods were valued at Rs. 37,43,969/- as against the assessment of Rs. 31,57,915/-. It was alleged that they had misdeclared the SKD parts of audio system as parts/components and not as audio system in SKD condition. The Commissioner of Customs in his findings has recorded as follows :-
2. We have heard ld. Consultant Shri C. Rajasimha for the appellants and Smt. R. Bhagya Devi, ld. SDR, for the Revenue.
3. Ld. Consultant submitted that the items are all parts and not music system by itself as parts had not been arranged on a wooden plank as required and it required expertise to assemble the same. He, further, submitted that in the circumstances no licence was required and it was not in SKD condition. He, further, submitted that the items are sets of parts and components and not parts by dismantling the audio system for the purpose of supplying in disassembled condition. He contended that all the parts which are required for manufacture of audio systems are freely importable as per EXIM Policy and PCBs are required to be imported against the special import licence. With regard to PCB, they have procured Special Import Licence (SIL) and had imported the components in terms of the policy. He submitted that there was no misdeclaration and, therefore, there was no case for ordering confiscation and for imposition of fine and penalty.
4. Ld. Consultant relied on the Apex Court judgment rendered in CC, New Delhi v. Maruti Udyog Ltd., 2002 (141) E.L.T. 392 (Tri. - Del.) wherein compilation of statistics for commercial considerations were considered as not mis-declaration. He, further, relied on the judgment of Award Electronics v. CC, Chennai, 2003 (153) E.L.T. 210 (Tri. - Chennai) wherein the Video camera parts imported under two different Bills of Entry were held not to be assessed as complete digital video camera and valued as such.
5. Ld. SDR pointed out that the items were in SKD condition and they were required to be classified as such in terms of Rule 2(a) of General Rules of Interpretation of Customs Tariff Act, 1975. Hence under ITC (HS) Classifications of the EXIM Policy, they had acquired the essential character of audio system and they were to be treated as only fully finished audio system classifiable under Heading 8520.33. She contended that as the appellants had clearly misdeclared the item as components, when in fact they were in SKD condition, they were rightly ordered for confiscation and imposition of fine and penalty. She relied on the judgment rendered by the Apex Court in the case of Sharp Business Machines Pvt. Ltd. v. CC, 1990 (49) E.L.T. 640 (S.C.) wherein the goods which were imported in SKD/CKD condition in the guise of parts and accessories were held to be imported with a view to misdeclare and undervalue the goods and the Apex Court had confirmed the order of confiscation and imposition of penalty. Ld. SDR, further, relied on the judgment rendered in the case of Sipani Automobiles v. CCE, Bangalore, 2002 (150) E.L.T. 845 (Tri. - Bang.) wherein also the cars which were imported in disassembled condition in CKD/SKD condition were to be treated as inputs for fully assembled car in terms of Note 6 of Section XVII of Central Excise Act. She further submitted that there is no error in the order and the fine and penalty imposed is very modest and less and does not require further modification.
6. On a careful consideration of the submissions, we notice that the items imported is in SKD condition and in terms of Note 2(a), the authorities have rightly classified the item as audio system and there is no error or infirmity on this aspect of the matter. The goods required an import licence and they are mere parts and components as all the items were in SKD condition in sets. The Commissioner has clearly gone through all the matter and has given a correct and legal finding. In terms of the Apex Court's judgment rendered in Sharp Business Machines Pvt. Ltd (supra) where the items are imported SKD/CKD condition in the guise of parts and accessories, then they contravened the provisions of law and required confiscation and proceeded with as per law. Likewise in Sipani Automobiles case (supra), the Tribunal clearly held that when the car has been imported in CKD/SKD condition, it is to be treated as inputs for fully assembled car and these two judgments prevail over in the present case. The Apex Court's judgment rendered in the case of CC, New Delhi v. Maruti Udyog Ltd. (supra) which pertained to import of printing books and printed manuals and has no applicability to the facts of the present case. Likewise the judgment rendered in Award Electronics v. CC, Chennai (supra) is also distinguishable and not applicable to the facts of this case. We find that the fine and penalty imposed is not on the higher side requiring interference in view of high value of the goods. There is no merit in the appeal and hence it is dismissed.