MOLEX (I) LTD. Vs. COMMISSIONER OF CUSTOMS, BANGALORE

JUDGEMENT

(1.) THE appellant is engaged in the manufacture of excisable goods of Chapter 85 of the Schedule to the Central Excise Tariff Act, 1985. After obtaining the requisite registration from the department under the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 [hereinafter referred to as the 1996 Rules or the said Rules] for import of specified goods at concessional rate of duty for manufacture of electronic connectors and harnesses, they imported various specified goods (inputs) during the period from 27 -8 -1996 to 1 -4 -2002 and cleared the same at concessional rate of duty under successive Notifications viz. No. 64/95 -Cus., dated 16 -3 -1995, 13/97 -Cus., dated 1 -3 -1997 and 25/99 -Cus., dated 28 -2 -1999.

(2.) UPON receipt of intelligence that the appellant was misusing the above benefit, a Preventive Unit of the department visited their factory on 6 -9 -2000 and conducted verification of records, during which it was noticed that the imported inputs had been used in the manufacture of parts of connectors viz. housings, terminals etc. and these products were cleared from the factory. It was also noted that housings, terminals etc. (parts of connectors) were not specified as finished goods in the above Notifications. As part of further investigations, the officers recovered the relevant records along with samples of goods (housings, terminals and connectors) from the factory, recorded statements of the Finance Manager and the Executive Director of the company and also gathered an experts opinion from the Indian Institute of Science, Bangalore. The Finance Manager stated that, in the declarations filed under Rule 173B of the Central Excise Rules, 1944, the fully assembled connectors were classified under Heading 85.36 and terminals, housings etc. in disassembled condition were classified as parts of connectors under Heading 85.38. The Executive Director endorsed the above statement. The appellants catalogue also showed certain housings to be so designed as to be used with certain terminals to make connectors. The investigators also found that certain housing was classified under sub -heading 8538.00 and described as parts of connector in an invoice dated 31 -8 -2000, under which the item was cleared from the factory. The experts opinion also, by and large, supported the findings of the investigators.

(3.) THE goods specified in column No. 3, against a given entry (serial number) in column No. 1 of any of the Notifications, could be imported at the concessional rate of duty prescribed in the Notification if it was to be used in the manufacture of the finished goods specified in column No. 4 against the same serial number by following the procedure set out in the 1996 Rules. The entries in column No. 2 (classification of the imported goods, i.e., Chapter of the First Schedule to the Customs Tariff Act, 1975), column No. 3 (description of the imported goods) and column No. 4 (description of the finished goods) against the entries (serial numbers) 33, 79 and 112 in column No. 1, respectively, of Notifications 64/95, 13/97 and 25/99 read identically as follows : -