Customs, Excise and Gold Tribunal - Delhi
Masters Medical Equipment vs Collector Of Customs on 2 May, 1995
Equivalent citations: 1995ECR315(TRI.-DELHI), 1995(80)ELT101(TRI-DEL)
ORDER P.K. Kapoor, Member (T)
1. This is an appeal against the order dated 30-11-1994 passed by the Collector of Customs (Appeals), New Delhi. The appellants imported a consignment of "Fidelity cassettes" against Bill of Entry No. 264191, dated 13-9-1994. The goods were described by the importers as "Fidelity Photographic Cut Film Holder Cassettes for Multi-format Camera for Recording Ultrasound and CT Images." The cassettes in question were declared by the importers as classifiable under Heading 90.33 of the Customs Tariff and assessable at 'Nil' duty as parts of medical equipment in terms of Notification No. 123/94. By his order dated 28-9-1994 the Assistant Collector held that "Fidelity Cassette" in question was not eligible for exemption under Notification No. 123/94 since it was only an accessory and not a component part of C.T. Scan/Ultra sound camera. Being aggrieved by the order passed by the Asstt. Collector, the appellants filed an appeal before the Collector (Appeals) who confirmed the Asstt. Collector's finding that 'multi-format camera' being a complete item in itself and the disputed 'Fidelity Cassettes' being only an accessory of such cameras, it was not eligible for exemption under Notification No. 65/88 as amended by Notification No. 123/94, dated 3-6-1994.
2. On behalf of the appellants, Shri N. Singh, Ld. Consultant submitted that the appellants are engaged in the manufacture of Multi-format Cameras. He added that the imported "Fidelity Cassettes" being essential components of such cameras, they were eligible for exemption under Notification No. 65/88 as amended by Notification No. 123/94, dated 3-6-1994. He stated that the Customs authorities had allowed the clearance of two earlier consignments imported by the appellants by extending the benefit of the exemption under Notification No. 65/88 (as amended) but in respect of the disputed consignment they had taken the incorrect and illegal stand that the 'cassettes' in question were accessories and not component parts of 'Multi-format Camera'. He contended that the 'Fidelity Cassette' has to be deemed as an essential part of the camera since it can be operated only after the 'Cassette' loaded with film is loaded into the camera. He reiterated his stand that the lower authorities had erred in denying the exemption under the said notifications on the ground that "Fidelity cassette" is in the nature of an accessory and the 'Multi-format Camera' was a complete product even without the 'Fidelity Cassette'. In support of his contentions, he cited the following cases :-
Sandip Agarwal v. Collector of Customs -1992 (62) E.L.T. 528 Kumudam Printers (P) Ltd. v. Collector of Customs -1992 (59) E.L.T. 568 CCE, Chandigarh v. Kashmir Vanaspati -1987 (31) E.L.T. 218 Godrej & Boyce Mfg. Co. Ltd. v. CCE, Bombay - 1994 (71) E.L.T. 429
3. On behalf of the Revenue, Shri K.K. Jha, ld. SDR submitted that from the catalogue of 'Fidelity Manufacturing Company' filed by the appellants, it was evident that 'Multi-image Camera' is a complete equipment even without the 'Multi-image cassette' since the users of such cameras have to obtain "Multi-image Cassettes" of various sizes and specifications from independent suppliers of such cassettes. He also referred to the extract from the manufacturers catalogue filed by the appellant wherein 8"x 10" "Film Cassette" has been listed along with 8 other items including the instruction manual, lens cleaning kit, Study Return Kit etc. as items which could be ordered depending upon the requirements. He contended that from the available literature it was evident that the "Film Cassette" in question was only an accessory, and not a component part of the "Multi-image Camera". He therefore pleaded for the rejection of the appeal. In support of his contentions he cited the following decisions :-
Precision Rubber Industries v. Collector of Central Excise - 1990 (49) E.L.T. 170 (Bom.) Wipro Infotech Ltd. v. Collector of Central Excise - 1994 (69) E.L.T. 82 (Tri.); and Indian Farmers Fertilizers Cooperative Ltd. v. Collector of Customs -1986 (26) E.L.T. 778 (Tribunal)
4. We have examined the records of the case and considered the submissions made on behalf of both sides. It is seen that the only question that arises for consideration in this case is whether "High Fidelity Multi-image Cassette" which holds film meant for exposure in a "Multi-image Camera" can be deemed as eligible for the benefit of exemption under Notification No. 65/88 as amended by Notification No. 123/94, dated 3-6-1994.
5. It is seen that the Notification No. 65/88 was amended by Notification No. 123/94, dated 3-6-1994 to include "Automatic/Laser multi image and multiformat cameras" at Sl. No. 94 in List (C) covering "other medical equipments" in Notification No. 65/88. The following proviso was also added after the Table annexed to the notification:
"Provided that the component parts of the goods mentioned in the Table above shall be exempted from so much of that portion of the duty of Customs leviable thereon under the said First Schedule, as is in excess of 15% ad valorem, when imported into India for the manufacture of the said goods."
6. In order to appreciate the considerations which weighed with the Collector (Appeals) in arriving at the finding that the "multi-image and Multi format Camera is a complete product in itself and "Film Cassette" is in the nature of an accessory and not a component part of such camera. We refer to the following extract from the impugned order :-
"The appellants have submitted that the multiformate camera covered by entry at Sl. No. 94 is being manufactured indigenously, and the fidelity cassettes being imported are an essential component part of the cameras, as such, the fidelity cassettes are eligible for exemption in terms of the aforesaid proviso to Notification 65/88. I find that the term "component parts" is a common term which as per dictionary meaning denotes "one of the parts or elements of a machine" - "a constituent part/any of the separate parts of the machine into which it may be resolved". The relevant question is, whether the fidelity cassettes imported by the appellants could be termed as "component part" of the multi format camera being manufactured by the appellants. The appellants have tried to make out that since the film which is used for imaging can be separately purchased and fitted into these cassettes which are referred to as "housing" for the film, the said cassettes cannot be equated with goods like video cassettes or photographic films which are the essential accessories of video cameras or photographic cameras, and that the fidelity cassettes are therefore more in the nature of a component part of the camera. I am unable to accept the appellants' aforesaid contention. The camera as such is a complete product without fitting of the fidelity cassettes, and the said cassette is not a component part of the camera and is more in the nature of an accessory which is used with the camera. It is in the same class as video cassettes or photographic films, which are never treated as component parts of the video camera or the photographic camera. The only difference is that for purpose of convenience etc. the film is separately purchased and fitted into this housing but this fact alone does not make the cassette a component part of the camera. The goods imported are in a way a component part of the "cassette" used with the Multi-format camera and these fidelity cassettes and the film sheets fitted into them constitute the cassettes which are akin to products like photographic films or video cassettes used in video cameras and fall into a different class of goods which are accessories to the cameras and, not component parts of such cameras. I therefore agree with the Assistant Collector of Customs that the equipment imported is not eligible for exemption in terms of Notification 123/94 and is liable to levy of duty on merits, and reject the appeal."
7. The appellants case is that the "Fidelity Cassette" is an essential component of "Multi-format camera" since the camera cannot be operated without the cassettes which are exclusively designed for holding the film to be exposed in the camera. It has been argued that the impugned order holding that the "Cassette" in question in the nature of accessory is contrary to the definition of "accessory". It has also been contended that the benefit of Notification No. 65/88 (as amended) having been extended to the appellants in respect of two earlier consignments the customs authorities were bound to extend the exemption for subsequent imports. In this regard it is seen that in the case of Collector of Central Excise, Chandigarh v. Kashmir Vanaspati (supra) relied upon by the appellants, the Tribunal while defining the scope of the term "component part" had held that a component part goes into composition of another article. The appellants have also cited the decision of the Tribunal in the case of Kumudam Printers (P) Ltd. v. Collector of Customs (supra) wherein it was held that items not listed in the manufacturers catalogue, correspondence and proforma invoice as compulsory accompaniment of imported goods could not be deemed as "accessories" in terms of Accessories (Condition) Rules, 1963.
8. We find that in the case of Koran Business Systems Ltd. v. Union of India reported in 1991 (51) E.L.T. 212 (Bom.), the question whether plates and black shields supplied by the manufacturer along with photo-copying machine could be deemed as part and parcel of the photo-copying machine was examined by the Hon'ble Bombay High Court. The High Court held that plates and black shields which were not built-in parts of the machine and could be purchased separately by customers as per their needs were only accessories and not parts of photo-copying machines even though the plates were used substantially in the same manner as a film or plate is used in a conventional camera. Paras 4 and 5 of the said judgment being relevant are reproduced below :-
"4. Mr. Nankani, learned counsel appearing on behalf of the petitioners, submitted that the order passed on the review application is entirely unsustainable. It was urged that essentiality cannot be the test for inclusion of the items while determining the assessable value of photo-copying machine under Tariff Item No. 33D of the First Schedule. The learned counsel urged that the photo-copying machine becomes a saleable commodity in the market without the plates and black shields. The plates and black shields are required for obtaining results from the machine, but the plates and black shields cannot be treated as part and parcel of the machine. We find considerable merit in the submission of the learned counsel. Tariff Item No. 33D provides for payment of excise duty on office machines and, therefore, while determining the assessable value, what must be taken into consideration is only the value of the machine. It is not permissible to take into consideration the accessories like plates and black shields while determining the assessable value of the machine. It is undoubtedly true that the plates and black shields are required for working of the machine, but that by no stretch of imagination can lead to the conclusion that plates and black shields are part and parcel of the machine. For illustration, film or roll is required for functioning of a camera, or petrol is required for running of car, or ribbon is required for functioning of a typewriter, but neither the film nor petrol nor ribbon can be considered as part and parcel of camera, car or typewriter. The appellate authority has recorded a clear-cut finding that even without plates and black shields, the photo-copying machine is a complete machine and liable for payment of excise duty under Tariff Item 33D. The appellate authority has also recorded a finding that supply of plates and black shields are not dependent upon a particular machine, but are supplied in accordance with the needs of the customers. The appellate authority further recorded a finding that customers can purchase plates and black shields separately as and when need arises. These findings of facts are not disturbed by the reviewing authority and in our judgment, on strength of these findings, the conclusion is inescapable that the value of the plates and black shields cannot be included while determining the assessable value of photo-copying machine.
5. The reliance placed on the decision of this Court in Kosan Metal Products Pvt. Ltd. v. Union of India and Ors., reported in 1981 (8) E.L.T. 725 and the decision of the Supreme Court in State of U.P. v. Kores (India), reported in AIR 1977 S.C. 132, by the learned counsel for the petitioners is very appropriate. Mr. Desai for the department relied upon the decision of the Andhra Pradesh High Court in Jay Engineering Works Ltd. v. Government of India and Ors., reported in 1982 (10) E.L.T. 378, but in our judgment, the said decision does not carry the case of the Department any further. In our judgment, the order of reviewing authority cannot be sustained."
9. In this regard it is also seen that in the case of State of Uttar Pradesh v. Kores (India) Ltd. reported in 1989 (39) E.L.T. 8 (S.C.) the Hon'ble Supreme Court has held that a typewriter ribbon is only an accessory and not a part of the typewriter even though it may not be possible to use the typewriter without a ribbon.
10. From the catalogue of Fidelity Manufacturing Company, one of the largest manufacturers of multi-image cassettes for "Multi-image Cameras", it is seen that they offer a large variety of Cassettes for holding films of varying sizes and for use in different cameras for Ultra Sound, CT and MR Scanning and Nuclear Medicine. It is seen that the catalogue describes the Standard Multi-Image Cassette in the following manner :-
"Standard Multi-Image Cassette Accessory for Matrix, Dunn, Schiff, Tech-nicare General Electric and other imagers."
11. In view of the above discussion and on the ratio of the Bombay High Court judgment in the case of Koran Business Systems (supra), we hold that the "Multi Image Camera" is a complete item in itself and the "Multi-Image Cassettes" are only accessories and not integral parts of such cameras. For this reason we do not find any infirmity in the finding of the Collector (Appeals) that the disputed "Cassettes" were not eligible for the benefit of the exemption under Notification No. 65/88 (as amended).
12. The appellants have contended that having extended the benefit of the exemption under Notification No. 65/88 (as amended) in respect of two earlier imports of "Fidelity Cassettes" by the appellants, the customs authorities were bound to extend the benefit of concessional assessment in terms of Notification No. 65/88 (as amended) in respect of the disputed consignment of "Fidelity Cassettes". In support of their contention they have placed reliance on the Tribunal's order in the case of Godrej & Boyce Mfg. Co. Ltd. v. Collector of Central Excise, Bombay-II (supra) wherein it has been held that in respect of an issue which is once decided and accepted by way of not challenging the same before the appellate authority, any subsequent notice raising it on grounds on which earlier adjudication proceedings and orders passed thereunder had assumed finality has to be rejected ex facie as not sustainable. It is seen that the earlier consignments of "Fidelity Cassettes" were only allowed to be cleared after assessment at the concessional rate of duty in terms of Notification No. 65/88 (as amended) and the question of applicability of the concessional rate of duty in terms of Notification No. 65/88 (as amended) in respect of the said goods was not decided as a result of any quasi-judicial proceedings. Hence, we do not find much force in the appellants contentions that having extended the benefit of the exemption under Notification No. 65/88 (as amended) in respect of two earlier imports of "Fidelity Cassettes" the customs authorities were bound to extend the benefit of the exemption under the notification in respect of all subsequent imports. The Learned Consultant has also cited the Calcutta High Court judgment in the case of Sandip Agarwal v. Collector of Customs(supra) in which the High Court had observed that when the customs authorities have cleared identical goods at identical price in the past they are bound by their own precedents. It is evident that these observations were made in a case relating to the determination of the value of imported goods for the purposes of assessment in terms of Section 14 of the Customs Act, 1962. It has been held by the Delhi High Court in the case of Metal Forgings Pvt. Ltd. v. Union of India reported in 1985 (20) E.L.T. 280, that the principles of estoppel or res judicata are not applicable to tax matters and if an assessee has wrongly classified his goods, then it cannot be taken as an estoppel for claiming a correct or revised classification. For these reasons we are of the view that the judgment of the Calcutta High Court cited by the Learned Consultant also does not help the appellants.
13. In view of the above discussion we do not find any infirmity in the impugned order. The appeal is accordingly rejected.