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Hindustan Aluminium Corporation Vs. Collector of Customs - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Calcutta
Decided On
Reported in(1984)(16)ELT654Tri(Kol.)kata
AppellantHindustan Aluminium Corporation
RespondentCollector of Customs
Excerpt:
.....required for replacement or expansion. he has pleaded that in view of the definition of capital goods and spares, the goods in question is not a spare. he has also cited item no. 449 of appendix 5 of am 82-83 policy. sub-item 5 of item no. 449 of appendix 5 is inclinometer and 449 is civil engineering instrument. he has also drawn attention to appendix 15 of am 79-80 policy and has referred to sub-para 3 of para 12. the learned junior departmental representative has submitted that the item could not be imported under o.g.l. and as such the appeal filed by the appellant should be dismissed.5. in reply shri j.n. roy, the learned authorised representative has pleaded that it is not a capital goods and it fully comes under the definition of spare. the description on the invoice fully.....
Judgment:
1. Hindustan Aluminium Corportion Ltd., Calcutta has filed an appeal being aggrieved from Order No. CAL-CUS-1295/83, dated 20th June, 1983 passed by the Collector (Appeals), Calcutta.

2. Briefly the facts are that the appellant is a manufacturer of various aluminium products having their plant at Renukoot, U.P. In the said plant, the appellant possesses two units of Rotary Kiln for processing of raw materials through heat treatment. The Rotary Kiln is fitted with the Inclinometer for setting the inclination of the Kiln according to the predetermined requirements. The appellant had imported an Inclinometer to be used in the Rotary Kiln. The Revenue had taken it to be a complete independent unit and, therefore, not eligible under the O.G.L. The Assistant Collector had held that the importation of the goods was without a proper licence, and is prohibited under Section 11 l(d) of the Customs Act, 1962 read with Section 3(2) of the Import and Export Control Act, 1947 of the Government of India, Ministry of Commerce and Industry Order No. 17/65, dated 7-12-1965. The goods were confiscated under Section 111(d) of the Customs Act, 1962 and a fine of Rs. 3300/- was imposed. Being aggrieved from the order passed by the learned Assistant Collector of Customs, Air Cargo Complex (Import), Calcutta, the appelant had filed an appeal before the Collector (Appeals), Calcutta. The Collector (Appeals) had confirmed the order passed by the lower authorities and the appeal was rejected. Being aggrieved from the aforesaid order the appellant has come in appeal before this Court.

3. Shri J.N. Roy, the learned advocate has appeared on behalf of the appellant. He has reiterated the facts stated above and- has explained the working of this Inclinometer in the Rotary Kiln. He has submitted that under Appendix 10 which deals with the import of items under O.G.L. vide Serial No. 4 the Inclinometer is permissible spare and the appellant being an actual industrial user is entitled to import the same. He has also referred to the definition of Spare in Serial No. 11 of Para No. 5 of AM 79-80 Policy. He has pleaded that Spare means a part or sub-assembly for substitution, i.e. ready to replace an identical or similar part or sub-assembly, if it becomes faulty or worn out, and includes an accessory (or attachment) in the same regard. He has submitted that the value of the Inclinometer is just Rs. 3348/- whereas the appellant is a big company and the capital goods are more than Rs. 8 crores. He has pleaded that it should be accepted as a spare as the same falls under O.G.L. He has made an alternative plea that in case the above argument is not accepted then he resorts to the argument that there was no Appendix 30 in AM 79-80 Policy. The same was added in 82-83 Policy. He has pleaded that the appellant's appeal should be accepted and the order as to the imposition of penalty should be quashed.

4. Shri A.K. Chatterjee, Junior Departmental Representative has appeared on behalf of the Revenue and has stated that the appellant has not provided any catalogue. He submitted that the explanation as to the functional submissions should not be accepted as this Inclinometer can independently work. He has also referred to the definition of Spare at Serial No. 11 of para 5 of AM 79-80 Policy. He has submitted that in view of this definition this is a complete instrument itself. He has also referred to the definition of capital goods as per Serial No. 8 of para 5 of AM 79-80 Policy. As per definition of Serial No. 8 Capital Goods means any plant, machinery, equipment or accessories required by an investor for production of goods or for rendering services including those required for replacement or expansion. He has pleaded that in view of the definition of Capital Goods and Spares, the goods in question is not a spare. He has also cited Item No. 449 of Appendix 5 of AM 82-83 Policy. Sub-item 5 of Item No. 449 of Appendix 5 is Inclinometer and 449 is Civil Engineering Instrument. He has also drawn attention to Appendix 15 of AM 79-80 Policy and has referred to sub-para 3 of para 12. The learned Junior Departmental Representative has submitted that the item could not be imported under O.G.L. and as such the appeal filed by the appellant should be dismissed.

5. In reply Shri J.N. Roy, the learned authorised representative has pleaded that it is not a capital goods and it fully comes under the definition of spare. The description on the invoice fully explains the case of the appellant that it is a spare and this description, has been accepted by the Revenue under secsion 46 of the Customs Act, 1962. He has submitted that the appellant's appeal should be accepted.

6. After hearing both the sides and keeping in view the facts and circumstances of the case I find that the only point for decision is whether or not the Inclinometer can be considered as a spare for the Rotary Kiln in terms of the Import Policy. The Inclinometer is an instrument for milling inclination and it can function without Kiln too. The acceptance of classification by the Revenue cannot lead to the inference that the same is also covered in the AM Policy for the year 79-80. I feel that the finding arrived at by the Collector (Appeals) is correct in law and facts. I, therefore, uphold the same. However, I feel that the penalty imposed is excessive. The same is reduced to Rs. 1,650/- (Rupees one thousand six hundred and fifty only). The Revenue is directed to refund the excess amount if already paid by the appellant within two months from the date of the order. For statistical purposes the appeal is dismissed.


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