PIONEER EMBROIDERIES LTD. Vs. COMMISSIONER OF CUSTOMS, MUMBAI

JUDGEMENT

(1.) The Appellant/Assessee herein had purchased 12 sets of second hand embroidery machines along with essential auxiliary machines from one foreign supplier known as M/s. Texchemie, Hong Kong (hereinafter referred to as 'M/s. Texchemie' for short). These were 23-24 years old machines which were exported to M/s. Texchemie by M/s. Moojin International Corporation, Korea (hereinafter referred to as 'M/s. Moojin' for short). M/s. Moojin supplied 12 Jacquard Control Device Reading System, one Reading System and one Card Pressed System. The Assessee herein, thus, purchased 12 sets of second hand embroidery machines from M/s. Texchemie and 12 Jacquard Control Device Reading System from M/s. Moojin. It is not in dispute that these second hand embroidery machines were non-computerised. The second hand embroidery machines as well as Jacquard Control Device Reading System were imported together. The Appellant wanted to take benefit of the concessional rate of duty in terms of Serial No. 89 of List 10 of the Notification No. 11/97-Cus. dated 1-3-1997 which mentions "Computerised embroidery machine". In these circumstances, the question which fell for consideration was as to whether the aforesaid machines imported by the Assessee can be treated as computerised embroidery machines.

(2.) The Commissioner, after adjudicating the matter, held that the old machines were non-computerised and merely because the Jacquard Control Device Reading System was installed in these machines after its import into India thereby making the same as computerised machines, would not give it a character of "computerised embroidery machines" at the time of import. The Customs, Excise & Service Tax Appellate Tribunal (hereinafter referred to as 'CESTAT') has affirmed the aforesaid view of the Commissioner resulting into dismissal of the appeal filed by the Appellant-Assessee against the order of the Commissioner [2004 (178) E.L.T. 933 (Tri. - Bom.)]. It is this judgment of the CESTAT which is in appeal before us. The matter rests on the meaning that is to be assigned to General Interpretative Rule (GIR) 2(a), which reads as under:-

(3.) The CESTAT has held that the two articles, viz., old mechanical embroidery machines on the one hand and the Jacquard Control Devices System on the other, were not independent and complete by themselves and were incomplete or unfinished articles. It is also found, as a fact, that the Jacquard Control Devices System were installed on the textile machines after importation and customs clearance at the premises of the Appellant and only thereafter, the said machines have become computerised textile machines.