CC Vs. FLEX INDIA LTD.

JUDGEMENT

(1.) THE captioned three appeals have been filed by the Revenue. As the three appeals arise out of the same order, they were heard together and are being disposed of by this common order.

(2.) THE facts of the case briefly stated are that Directorate of Revenue Intelligence acting on specific information searched the factory premises of the respondent herein. On inspection of the consignment cleared under Bill of Entry No. 101490 dt. 15.10.1990 they found that the consignment consisted of Embossing Machine with hot oil unit and control panel and Electroforming Machine/tank with control cabinet and control panel. These goods were cleared under OGL in terms of Appendix I Part B Item No. 2, Section No. 4 of Import Export Policy 1990 -93. Importers claimed classification of goods under Chapter Heading 8443.60 and the benefit of the Notification No. 59/87. Statements of S/Shri A.K. Chaturvedi, Managing Director, Pradeep Tyle, General Manager and K.L. Alreja, Manager Liaison were recorded and a Show Cause Notice was issued to them asking them to explain as to why the goods imported without a valid import licence should not be confiscated, why Customs duty amounting to Rs. 19,93,467/ - should not be demanded on Electroforming Machine and Rs. 2,35,650/ - on the mother shim of nickel should not be demanded and why penalty should not be imposed. In reply to the SCN the appellant submitted that Electroforming Machine was an essential accessory of Polyester Embossing Machine that Appendix I, Part B, S. No. 4 shows the description of the goods as "book binding machinery for hard cover and paper back binding including automatic folding machines, collating machine, adhesive binding machines, staple stitching machines, book sewing machines, Cases making machinery, embossing machines". It was, therefore, argued for the respondent herein that embossing machine was covered under Section No. 4 of Appendix I, Part B. It was submitted by them that they were actual users and the goods imported were capital goods and were covered by S. No. 4 as indicated above. They also submitted that actual users (Industrial) is defined in para 7(3) which reads "7(3) Actual User (Industrial) shall mean an industrial undertaking, be it in the large scale, small scale or cottage industries sector, engaged in the manufacture of any goods for which it holds a valid licence or Registration Certificate from the appropriate Government authority, wherever applicable.

(3.) IT was also submitted by the respondent herein that the SCN was issued on 9.5.1991 and served on them on 11.5.1991 seeking recovery of differential duty amounting to Rs. 22,29,072/ - with the Bill of Entry No. 101490 dt. 15.10.1998 in respect of duties of Customs as assessed were paid on 24.10.1990. Thus the SCN was beyond a period of six months from the date of payment of Customs duty. It was argued that there was no wilful mis -statement or collusion or suppression of facts to invoke the extended period of five years. It was also submitted that SCN was issued by the Assistant Director; that in case the extended period is invoked, the SCN should have been issued only by the Collector in terms of Sub -section I of Section 28 of the Customs Act, 1962. It was submitted that both on jurisdiction and the ingredients for invoking extended period beyond six months, the SCN is ab -initio void and warrants being set aside. The ld. Commissioner after hearing the various contentions and submissions made by the appellant observed "it is, therefore, not relevant to consider this issue at the stage of adjudication. However, it is apparent that machinery for packaging, manufacturing was also permitted to be imported under OGL and there was no intention to place the Polyester Embossing Machine under the list of restricted items. He further observed that it is apparent that imported machinery is installed at the factory of the importers and mat it has not been traded. He also held that the respondents herein are actual users (Industrial) for this machinery" on the question whether Embossing Machine includes Electroforming Tank or not. Ld. Commissioner held that Electroforming Tank and Polyester Embossing Machine are part and parcel of the same machine and functionally they are not independent for each other. On the question of classification of the goods, the Ld. Commissioner held that "I am, therefore, not able to persuade myself to accept the department's case that Electroforming Tank needs to be re -classified under Heading 84.89 as against Heading 8420.11 under which the goods were classified by the Department on examination of the goods and were assessed accordingly".