Customs, Excise and Gold Tribunal - Delhi
Enfield India Ltd. vs Collector Of Customs on 24 June, 1987
Equivalent citations: 1989(42)ELT494(TRI-DEL)
ORDER K.L. Rekhi, Member (T)
1. At the out set, we took up consideration of the application for condonation of delay in filing the supplementary appeal No. C-2823 of 1986-B2. The learned representative of the department did not object to the application being allowed. We allowed the application and condoned the delay in filing this supplementary appeal.
2. Merits of the 10 appeal were thereafter heard. These 10 appeals involve common facts and issues and relate to the same appellants. They are being disposed of by this combined order.
3. The facts, in brief, are that the appellants are manufactures of motor-cycles. They imported connecting rod forgings of aluminium. The department assessed them under Heading 84.06 of the Customs Tariff Act, 1975 which is for Internal Combustion Piston Engines. In the case of one appeal (C-1006/81-B2), however, the department applied the Heading No. 87.09/12(1) which is, inter alia, for motor-cycles and parts thereof. The rate of duty under the two headings invoked by the department was the same. The department was classifying the imported forgings on the footing that the goods had already attained the essential character of finished parts of motor-cycle engines/motorcycles and hence, by virtue of interpretative Rule 2(a), the goods, though not fully finished, were to be classified as if they were finished parts. The appellants contested this classification, contend that the goods had not attained the essential character of finished parts inasmuch as they had yet to undergo seven major manufacturing opera-dons after their import before they could be considered finished parts. The appellant-claimed their re-assessment under Heading 76.08/16 as articles of aluminium so far a the basic customs duty is concerned. Before us, the appellants relied on the earlier order of this Tribunal No. 537/86-B2, dated 1-7-1986 passed in their own appeal No. C-583/79 B2 which involved the identical goods. This order decided the issue in favour of the appellants. It had since been followed by the subsequent Benches of this Tribunal in other similar cases, such as, Order No. 1108 of 1986-B2, dated 4-11-1986.
4. The appellants also showed us a sample of the goods as imported and another sample of what they became after undergoing the post-importation manufacturing operations in their factory. They explained the nature of these operations with the help of two samples. We find that these operations have been listed and discussed in the Tribunal's earlier Order No. 537/86-B2, aforesaid.
5. The learned representative of the department relied on a larger Bench judgment of this Tribunal in BHEL's case reported at 1987 (28) ELT 545, in which the scope of the interpretative Rule 2(a) of the Customs Tariff Act, 1975 was dealt with. He argued that the goods as imported had been assigned a part number by the foreign supplier and, in the form imported, they had acquired the proximate shape and outline of the finished connecting rod. The goods, as imported, could not be put to any other use except to process them into connecting rod of motor-cycle. The FOB import value of t II- per piece was quite high for the goods which showed that the goods were something more than a mere crude forging of aluminium. The learned representative of the department urged us to maintain the department's classification in the light of these general considerations discussed in the larger Bench judgment in BHEL's case aforesaid, as had been done by the Tribunal in another case of Sri Rama Vilas Service Limited (Order No. 995/87-B2, dated 27-5-1987) in appeal No. C-793/81-B2.
6. We have given the matter our earnest consideration. On seeing the two samples of the goods as imported and as they became after post-importation operations, we are satisfied that the goods as imported were only rough forgings and they had not undergone any further processing abroad. For example, the narrower end of the forging as imported was a lump of metal while the finished connecting rod had that lump bored and drilled with one big hole and another small one. Besides, a lot of machining had been done on the imported forging in India. The larger Bench judgment of this Tribunal does not lay down any hard and fast general principles but stresses, on the contrary, that each case would have to be decided in the light of its own peculiar facts. We are satisfied that 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. It ma; be that they had no other commercial use except processing into finished connection; rods. But that cannot be an adequate consideration for classifying every rough forging as if it were a finished part of machinery. We do not consider that the value of £ 2/- per piece was suggestive of anything on the point of finishing.
7. The case of Sri Rama Vilas Service Limited is easily distinguishable from that of the appellants. In the case of Sri Rama Vilas Service Limited, the goods were different. The foreign supplier had described them in the import invoice as "Perkins Diesel Engine Components 90-P6/354 Cylinder Head Castings". Sri Rama Vilas had also repeated the same description in their declaration in the import Bill of Entry. Part number of the cylinder head was also shown by the foreign manufacturer in the invoice. In the cases before us, neither the foreign supplier nor the appellants have at any stage declared the goods to be components or connecting rods; they clearly stated that the goods were aluminium forgings for connecting rods. The analogy of Sri Rama Vilas case, therefore, does not apply here.
8. We find no reason to differ from the earlier Bench Order No. 537/86-B2, aforesaid. Accordingly, we hold that the correct classification for basic customs duty was under the Heading 76.08/16 as urged by the appellants.
9. In the four appeals No. C-917 and 1006/81-B2, C-473/82-B2 and C-2823/86-B2, there is a classification dispute regarding countervailing duty also. The department charged the countervailing duty with reference to Item No. 27(b) of the Central Excise Tariff which, inter alia, covered "shapes and sections" of aluminium. The appellants pleaded that the goods as imported could not be considered as shapes and sections. However, they very fairly stated that the earlier Tribunal's order on this point 1987 (28) ELT 134 was against them and that they had nothing further to say. By the process of die-forgings, the imported goods had definitely been shaped into a particular form, though a rough one as yet. We agree with the earlier Tribunal's order that the countervailing duty was correctly charged on the imported forgings.
10. In the result the 10 appeals are allowed with consequential relief to the appellants so far as only the basic customs duty is concerned. On the point of countervailing duty the appeals are rejected.