M/S. ICI (INDIA) LIMITED Vs. CC, CALCUTTA

JUDGEMENT

(1.) BY this order -in -appeal 13.7.92 Collector of Customs, Calcutta rejected an appeal filed by the present appellants against the order -in -original dated 8.11.90 passed by the Assistant Collector holding that the Automatic Flow Forming Machine imported by the appellants for manufacture of rigid copper wire compete with tools were classifiable under Chapter heading 82.07 of the Schedule to the Customs Tariff Act and not under heading No.84.62. The differential customs duty amounting to Rs.16,15,326 was confirmed against the appellants. The lower authorities also held that the goods were not covered by exemption Notification No. 40/78 -Cus.

(2.) Appearing for the appellants Shri R. Suramaniam, Ld. Consultant submitted that the Collector in the order in appeal had wrongly rejected the appellants' contentions as to the lack of jurisdiction on the part of the Assistant Collector to initiate proceedings under Section 28(2) of the Customs Act. He submitted that in terms of Section 46 of the Customs, Act, upon the goods arriving at the port of entry, the importer was required to file a Bill of Entry for home consumption or warehousing of the goods and upon the Bill of Entry being filed, it, becomes incumbent upon the concerned proper officer of the customs Department to assess the goods in the manner prescribed under Section 17 of the Act. In the case of the appellants the Bill of Entry was assessed by the Proper Officer after perusal of all the documents. Thereafter the customs authorities had duly classified the goods as falling under heading No.8462.99 and allowed the benefit under Notification No.40/78. Appellants had thereafter paid the duty as assessed, and the concerned Customs officers had allowed clearance of the goods under Section 47 of the Act. Unless the assessment order was set aside by the appropriate authorities under the Act in the manner prescribed the question of alleging any short levy or short payment of customs duty within the meaning of Section 28(1) could not arise. The goods had been classified as falling under heading No.8462.99 with consequential benefit under Notification No. 40/78 -Cus. There is no provision in Section 28 enabling the Collector to reverse an assessment order passed under Section 17. Section 17 provides not only for valuation of the goods for the purposes of levying duties of customs but also classification thereof. Such an order of assessment can be altered or set aside only in the manner prescribed under Section 129 -D. Only on the passing of an order by the appropriate authority under Section 129D for realisation of any short paid or short levied duties of customs arose. The collector on the other hand had mis -interpreted the relevant provisions of the First Schedule to the Customs Tariff Act. The Ld. Consultant also contended that the SCN itself was time barred having been issued beyond the period of six months required under Section 28(1). He submitted that the SCN was issued and received by the appellants only on 14.6.88 whereas the assessment had been completed by the Customs authorities on 14.12.87 and the appellants had also paid the customs duties thereof as assessed. In view thereof the period of 6 months ended on 13.6.88. Further, for purposes of construing the "relevant date" under Section 28(3) the relevant date was the date payment of duty which was 14.12.87.

(3.) LD . SDR, Shri A.K. Agarwal, defending the impugned order referred to the cross objection filed by the Deptt. and submitted that the SCN was issued to the appellants on 14.6.88 asking them to show cause why customs duty amounting to Rs.16,15,326 short levied could not recovered and why the items should not be classified under heading 82.07. It is no doubt true that the item was earlier allowed to be classified under heading 8462.99 with exemption under Notification No.40/78. The Customs authorities had later on found that the goods were in the nature inter -changeable tools. The benefit of Notification No.40/78 was not available to such goods since the exemption under that Notification was available only in respect of goods falling under Chapter 84. Ld. SDR referred to the Tribunal decision in New Haven Steel ball Corporation Ltd Vs Collector of Customs, [ : 1991(56) ELT 761] in which the Tribunal had taken into consideration the earlier decision on Pure Wall and Associates Ltd Vs Collector of Customs [ : 1984 (15) ELT 490]. It was held in the later case that heading 82.05 was identical in description to heading No.82.05 of CCCN. As regards the expression "interchangeable tools" under heading 82.05 meant tools which are inter -changeable between the various types of machines, hand tools machine tools or power operated hand tools. Interchangeability of the tools, therefore, has to be with reference to a particular machine and not the tool itself. it did not mean that the tool itself should be capable of performing different types of jobs. In the case of the goods imported by the according to the DR, one set of tools being fitted at the time of importation of Automatic Flow Forming Machine and another set of tools being supplied separately, the criterion of interchangeable tools as given by the Tribunal in the case of New Haven Steel Ball Corporation Ltd, supra, was satisfied.