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Hindustan Teleprinters Limited Vs. Collector of Customs - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu
Decided On
Reported in(1986)(7)LC79Tri(Chennai)
AppellantHindustan Teleprinters Limited
RespondentCollector of Customs
Excerpt:
.....madras, found that a consignment declared to contain electric typewriters, component parts of electric typewriter in semi-knocked down condition was not covered by licence no. p/d/2227424 dated 1-9-1982 as the goods were in effect complete typewriters, the import of which is not permitted during the policy period april-march 1982-83 in terms of sl.no. 77 of appendix 4. he also noted that there were excess goods of the value of rs. 13,968/- not declared in the bill of entry. he ordered the confiscation of both the typewriters and the excess items less key tops (the latter valued at rs. 13,968/-) under section 111(d) and (m) of the customs act, 1962 read with section 3(2) of the import and export (control) act, 1962 and fixed a fine in lieu of confiscation of rs. 2 lakhs. in coming to.....
Judgment:
1. In his order referred to supra, the Collector of Customs, Madras, found that a consignment declared to contain electric typewriters, component parts of electric typewriter in semi-knocked down condition was not covered by Licence No. P/D/2227424 dated 1-9-1982 as the goods were in effect complete typewriters, the import of which is not permitted during the Policy period April-March 1982-83 in terms of Sl.

No. 77 of Appendix 4. He also noted that there were excess goods of the value of Rs. 13,968/- not declared in the Bill of Entry. He ordered the confiscation of both the typewriters and the excess items less key tops (the latter valued at Rs. 13,968/-) under Section 111(d) and (m) of the Customs Act, 1962 read with Section 3(2) of the Import and Export (Control) Act, 1962 and fixed a fine in lieu of confiscation of Rs. 2 lakhs. In coming to this conclusion the Collector noted that the licence presented was for the importation of "components of electric typewriters in S.K.D. condition according to the lists attached". The goods were not components in S.K.D. condition but mere complete typewriters without side covers, back cover, bottom cover, top cover, cable with plug and socket pin and some key tops [::, ?; 5/8, 7/8, 1/3, and 2/3]. In a letter No. M/ETP/1 dated 7-2-1983, the appellants, M/s.

Hindustan Teleprinters Limited had stated that they do not have special assembly jigs and fixtures for locating the working elements of the machine and these were intended to be made available to them by their collaborators at a future point of time.

2. Before us the representative of the appellant urged that the goods do not constitute a complete typewriter; they have just been put together as an act of mere packing for convenience of transport and easy handling. They require to be subjected to 17 different operations, details of which are set out before the Collector. The importation of the individual components in the list attached to the licence is permitted. Mere putting them together for purposes of packing would not constitute importation of a complete typewriter, importation of which is not permitted.

3. He also stated that there is no definition of the term 'SKD' which refers to semi-knocked down condition. To what extent an item should be dismantled to reach the SKD condition is a matter to be decided in the light of trade practices. In the present case, he claimed that the goods were in S.K.D. condition. He also referred to the value of the imported goods as indicating 30% of the sale price of the article, the basis on which recommendations were made by the Director General of the Technical Development to the licensing authority and the licence actually issued. This factor has been wrongly taken into account by the Collector without appreciating the full data.

4. The Senior Departmental Representative on the other hand, pointed out that by their own admission, the appellant did not have the jigs and fixtures for assembly of electric/electronic typewriters imported.

The goods have not been merely packed but assembled omitting odd items here and there, such as side cover and key tops to make it appear as if the article is not a complete typewriter. Though there is no definition of the term 'SKD', the licence is not valid for a semi-dismantled unit.

The term SKD refers to components themselves-in other words, only the components can be in SKD condition. The operations said to be done in India after importation are merely maintenance operations. Considering the value of the offending goods, the order of the Collector fixing a fine in lieu of confiscation of Rs. 2 lakhs is not excessive particularly when it is kept in view that the goods are prohibited items.

5. We have considered the arguments of both sides. The licence description reads 'Components of Electric Typewriters in SKD condition as per lists attached'. The list itself enumerates 162 items of parts.

The end-products are shown as (1) Teleprinters and other ancillary equipments, (2) Electric typewriters. From a description of the article as set out in the Collector's order, it is clear that what has been imported is not components of the electric typewriters in SKD condition, but a near complete typewriter. The assembly or manufacture of the electric typewriters has reached a near complete stage, except for the provision of side covers, front cover, provision of a few inconsequential keys (which were found separately in the same consignment) and the provision of connecting power line with plug. We also had occasion to see the item in Court. We are satisfied that what is imported is not component parts in semi-knocked down condition but nearly a complete built up electric typewriter. Thus whatever be the decision regarding the nature of the goods as imported-a complete typewriter or not the importation in a nearly complete assembled condition is not the same as importation of components in SKD condition. One can understand groups of components in SKD condition, but not all of them put together as a near complete typewriter.

Accordingly, we find that importation is not covered by the licence in force.

6. We also note that according to Schedule I to Import Control Order 1955, as set out in the Handbook of Import Export Procedures for 1982-83, "Each heading number in Col. (1) corresponds to the respective Chapter and heading number of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and each entry in Col. (2) has the same scope and meaning as the corresponding Chapter and heading of the said first Schedule." Typewriters are covered by Entry No. 84.51 in Chapter 84 of Section XVI of Schedule 1 of Appendix 2 of the Handbook referred to supra and its scope is similar to the merged Heading 84.51/55 in the Customs Tariff Schedule. The scope of the entries in the Customs Tariff Schedule are governed by the Interpretative Rules; Rule 2(a) provides that when an article at the time of import has reached such a stage of completion that it more or less approximates to the final article, it will be classified as the complete article itself. Thus, the term 'typewriter' for the Customs Tariff Schedule, and hence the Import Trade Control schedule, would cover the near complete article imported by the appellant. In this view of the matter also, the importation is prohibited, because of Entry No. 77 in Appendix 4 of the Policy for the April-March 1982-83.

7. Though it was claimed on behalf of the appellants that the goods have merely been put together for purposes of convenience of transport and they are in SKD condition according to trade practice, no particular evidence regarding the latter has been submitted either to the Collector or before us. Putting together of various components in the finished product precisely in the same way as needed for the final operation of a typewriter is not an act of mere packing. In this view we reject the plea made on behalf of the appellant.

8. In the result we find that the order of the Collector is maintainable on facts and in law. The fine in lieu of confiscation is not high. The appeal is accordingly dismissed.


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