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Dipen Enterprise Vs. Collector of Customs - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Decided On
Judge
Reported in(1983)LC1338DTri(Mum.)bai
AppellantDipen Enterprise
RespondentCollector of Customs
Excerpt:
.....at para 5(11) and (13) respectively he argued that the goods did not fall within the definition of consumer goods as held by the lower authorises. he further pointed out that consumer goods were not defined in the am 80 policy book. shri nankani submitted that the main point to decide in the appeal is whether the diallers and the controlling device were consumer goods. the appellate collector had held that these were additional attachments. the advocate submitted that this finding was wrong. after assembly, the items were marketed and these increased the performance of the telephone instrument and were correctly classifiable as spares. in answer to the query, he further clarified that the goods were imported in such quantity, that these would produce the necessary number of diallers and.....
Judgment:
1. This is an appeal under Section 129A of the Customs Act filed by M/s. Dipen Enterprises against the order No. S/23-B-Air-709/tOPAS dated 24-7-81 of the Deputy Collector of Customs, Bombay and Order No.S/49-545/81-PA dated 6-9-82 of the Appellate Collector of Customs, Bombay, levying and upholding respectively a fine of Rs. 75,000/- in lieu of confiscation of 46 post parcels containing Telephone Diallers and Toll Call Restrictors valued at Rs. 71,749/-. The learned Advocate who appeared for the appellants stated that he has filed copies of the invoices which would indicate the value of diallers at Rs. 30,295/- and the value of the parts of telephone restrictors at Rs. 41,454/-raaking a total of Rs. 71,749/-. In reply from the Bench he clarified that the goods were not imported as assembled units. He explained that the import of the goods in question had been made under the OGL in Appendix 10, Sr. No. 4 as permissible spares other than those included in Appendix 3. The appellants had submitted Licence No. 2875 dated 27-7-79 duly endorsed by the J.C.C.I. & E. Bombay permitting the appellants to import OGL items in terms of paras 173(1) and (2) of the AM 80 Policy.

The appellants claimed clearance of the parts of telephone diallers and telephone control device as spares as per para 173^1) of the Policy/Book. However, the department did not permit the clearance of the consignments on the grounds that they held that the clearance of the goods was not permitted as they fell within the scope of entry at Sr. No. 664 of Appendix 3 and hence not allowed to be imported under the OGL. in other words, the department held them as consumer electronic items. The Deputy Collector, further held that these goods would also fall under item 65 of the Appendix 4 of the AM 80 Policy.

The learned Advocate has pointed out the Dy. Collector's findings from his order-in-original. He has explained that the same entry at Sr. No.644 of Appendix 3 was repeated at Sr. No. 65 of Appendix 4. The learned Advocate explained briefly the functions of the telephone dialler and the controlling device. He has submitted the manufacturer's printed pamphlets for the two items with a request to keep the same on record.

To recapitulate the function of the controlling device is to have a locking arrangement whereby STD calls would be blocked by locking the device and keeping it unobtrusively from the telephone instrument. The diallers retained 32 Nos. in memory and this could be dialled at any time, making the phone calls easier. Shri Nankani explained that these two instruments were therefore meant to be used with the telephone and they were spares for the telephone. The learned Advocate referred to the definition of spare in the policy at para 5(11). He argued that the goods satisfy the definitions of the spares and accessory at para 5(11) and (13) respectively He argued that the goods did not fall within the definition of consumer goods as held by the lower authorises. He further pointed out that consumer goods were not defined in the AM 80 Policy book. Shri Nankani submitted that the main point to decide in the appeal is whether the diallers and the controlling device were consumer goods. The Appellate Collector had held that these were additional attachments. The Advocate submitted that this finding was wrong. After assembly, the items were marketed and these increased the performance of the telephone instrument and were correctly classifiable as spares. In answer to the query, he further clarified that the goods were imported in such quantity, that these would produce the necessary number of diallers and control devices as mentioned in the invoice. In the end he submitted that these items do not fall within the Appendix 3 and hence the licence tendered by the importers should be accepted for the clearance of the goods and the orders of the Dy. Collector and the Appellate Collector should be set aside and the appeal should be allowed.

2. Shri C.M. Gidwani Senior departmental representative has contended in reply that the invoices for the goods indicated that the diallers and the control devices were imported in sets and' in identical quantity. The goods were therefore not spare parts of the diallers or control devices. The diallers and control devices as such are imported in semi-knocked down condition. The same could be assembled without much of skill. For diallers sockets and pins were provided and they could be put together. As regards control devices, the electronic circuit was just required to be put in the metal container to complete the instrument. Thus, no specalised equipment or skill was necessary to assemble the instruments. 'These had been imported in two, separate mails. But the number indicated that they were complete units. The department had relied on that entry No. 644 in Appendix 3 to hold that these were consumer electronic items. Shri Gidwani read out the aforesaid entry. He pointed out that the entry included kits/ready to assemble seats The only dispute was whether the goods were consumer items. He explained that the names of items furnished in entry 644 was by way of illustration and the list was therefore not exhaustive.

Telephone was a consumer item and therefore the diallers and the locking devices were also consumer items as these were attachments for the telephone and could not be used independently. The diallers and the controllers were sold as such after assembly. Both were consumer items.

Even if the parts were to be taken into account as the goods have been imported in S. K. D. condition, the same were also consumer goods and the imports would be bit by the same provisions of the I. T. C. policy.

Shri Gidwani also relied on the quotations from the supplier and submitted a copy to the Tribunal and pointed out that the goods were imported in S.K.D. condition and they were not spare parts as claimed by the importers. Therefore the ban under Sr. No. 644 of Appendix 3 was attracted as the goods were not directly usable. He cited the example of T.V. games, Video Cassette recorders, amplifiers, etc, from the entry at Sr. No\ 644 to show that these could not be used by themselves but they had to be used with other items like T. V., telephone sets, public address system. Shri Gidwani emphasised that the dialler and the controlling device with the telephone would meet the consumer need and therefore these were consumer items) Referring to the definition of "spare" in the policy, he further, contended that in the case of control device the metal case was not liable to be broken or damaged and therefore there was no question of its being replaced and therefore the goods under import being treated as spares. In the case of electronic circuit, he explained that the same position would hold good, if the circuit got burnt out the same would be thrown, away, the dialler did not satisfy the definition of spares even though it had been imported in two parts. For the aforesaid reason, Shri Gidwani submitted that the orders of the Deputy Collector of Customs and the Appellate Collector of Customs were legal and proper and; therefore they should be maintained and the appeal should be dismissed.

3. Advocate Shri Nankani in reply had contended that skill was required for assembly of the dialler and the control device and therefor it was not correct to say that they could be assembled without much of effort.

We referred to the invoice description of the article. He further, contended that the entry at Sr. No. 664 of Appendix 3 was exhaustive and he buttressed his argument to show that instead of the word "namely" the word "including" was used. He further, pleaded that an attachment to the consumer goods would not necessarily mean that the attachment was a consumer item, "Attachment" was defined in the I.T.C.policy and as per this definition the same need not be a complete consumer item. He, further, drew our attention to the quotation from the supply to say that the goods were not imported in an assembled condition. Even amplifier was used with the public address system and it was an attachment of the same system. For the aforesaid reasons, he repeated his submission for giving the relief.

4. We have examined the arguments of the appellants and the respondents. We find that the scope of entry at Sr. No. 644 of Appendix 3 is very wide. The illustrations mentioned therein are not exhaustive but only examples of the consumer goods sought to he covered by the aforesaid entry On the basis of the functions discharged by the control devices and the diallers, we find that they are attachments to the telephone and they cannot be anything but consumer goods. Accordingly, we find that the ban on the import under Sr. No. 664 of Appendix 3 is attracted and the licence is not valid for the clearance of the goods in question. In this view, we find) that the orders of the lower authorities are correct and legal. The same are confirmed and the appeal is dismissed.


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