ESTER INDUSTRIES LTD Vs. CC

JUDGEMENT

(1.) THE appellants imported one Barometeric Condenser and two Jacketed Air Chambers and Diffusers and claimed clearance of these goods as parts of reactor. The goods were confiscated under Section 111(d) of the Customs Act, 1962 under the impugned order. The ground for confiscation is that these goods are complete machines falling under Heading 8419.89 of the Customs Tariff in terms of the HSN Notes and that licence was required for their import. A penalty of Rs. 50,000.00 has also been imposed on the appellants.

(2.) THE appellants have contended in their appeal that the goods are parts of machine/machinery already installed and used in the factory of the appellants and these parts have been imported for replacement of defective parts. They have contended that parts are specifically exempted from import licence under Import -Export Policy 1992 -97 pages 672 and 673. The appellants have submitted a diagram and write -up in support of their submission that these goods are functional parts of the plant and machinery. They have submitted that these goods are classifiable under Heading 8419.90 as parts under the Import Policy. During personal hearing, Shri R. Santhanam, learned Counsel submitted on behalf of the appellants that the grounds taken in the impugned order for holding that the goods are prohibited for import were that in terms of the Explanatory Notes to HSN, the goods are classifiable under Heading 8419.89 and that the appellants themselves had classified the goods so in their Bill of Entry. Shri Santhanam submitted that this view is erroneous. He explained that the Explanatory Notes to Customs Tariff are applicable only for the purpose of classification of goods to customs duty under the Customs Tariff and not for the purpose of Import Policy. In this context, he referred us to the final order No. 603/98 -B2, dated 27.9.1998 of the Tribunal wherein the Tribunal held that Explanatory Notes to Customs Tariff are not applicable for the purpose of classifying goods under Import Policy. Shri Santhanam also submitted that the appellants' classification of the goods for the purpose of customs duty is not relevant to the Import Policy. Shri Santhanam specifically referred to the technical write -up filed by the importer describing the goods and submitted that from the write -up and sketch it is clear that these items are parts of machinery. The write -up and sketch are reproduced below:

(3.) HEARD Shri S. Ramanathan, learned D.R. for the Revenue. He reiterated the findings in the impugned order and submitted that the appellants themselves had claimed these goods as independent machines for the purpose of customs classification. Therefore, their claim that the goods are parts has no credibility. He also submitted that the customs classification is valid in respect of Import Policy as both follow the same classification.