Full Judgment
2. Arguing for the appellants ld. Advocate submits that suppliers had wrongly claimed all these items under the heading bearings. Only Items 3 & 5 indicated in order of Collector are bearings and the remaining items are not bearings. This was subsequently clarified by the foreign supplier vide certificate placed at page 48 of the appeal papers. They also made an additional ground that these bearings are classifiable under Tariff Item 85.03 as these were specifically tailor made as spare for diesel generating sets and therefore, could be cleared as spares under OGL.
3. Ld. DR strongly opposing the pleas of the appellants submits that Machinery Expert clearly indicated that the impugned goods are bearings which were restricted item and licence was valid for import of goods valued at Rs. 3 lakhs. To the extent the appellants imported goods totally valued at Rs. 6,81,076/-, there was clearly contravention of Import Trade Regulation.
4. We have heard both sides. The goods comprise Cam Shaft Metal, Big Eng. Metal of Piston and Piston Pin Metal. These can be considered as bearings. We have gone through the inspection report of Machinery Expert to which Additional Collector has referred to in his written order. We reproduce the relevant extract from the report: Item (ii): This item has been described as 'Cam Shaft metal Fig. No. 330-2301-19 (10 sets)'. On examination it was found that each set consists of 2 pieces of split type "this walled bearing" and 1 piece of "thick bush bearing". The set of this walled bearing and thick bush bearing packed separately. These are used as the cam-shaft of the engine.
Hem (vi): This item has been described as 'Big Eng. metal of Piston and Conrod Fig. No. 3880-1901-14'. On each set consists of 2 (two) piece are used at the big eng. of the correcting rod of the engine.
Item (vii) : This item has been described as Piston Pin Metal : Fig.
No. 3380-1901-13. On examination it was found' sheel type this walled bush bearing'. It is used at smaller end of the connecting or over the piston pins.
Items (Hi) & (v) : These have been described as 'Main Bearing Metal : Fig. 3380-400-2 and 6'. These were found at 'Split type thick walled bearings'. These are used in the crankshaft of the engine.
As stated above the items enumerated in Annexure 'A' are engine bearing (walled and bush type). Further as regards to material it, very clear from the 'operational manual' that these are bimetal/trimetal bearings. These are covered by the entry at S. No. 489, Appendix 3, Part A of AM 1988-91".
From this it is clear that what has been described as Cam shaft metal comprises two pieces of split type "this walled bearings" and one piece of thick bush bearing. Similarly metal described as main bearing metal were found to be split type thick walled bearings.
5. Going through the "Book of the Car" edited and designed by Drive Publications Ltd. Berkeley Square House, London, to minimise friction and to support all the rotating points of a car's mechanism - parts fall into two main types. Plain bearings, in which the moving part rotates in a shell or inner, with adjacent surfaces usually separated by a film of oil or grease; and roller bearings in which the load is brone by balls or rollers.
Again dealing with cam shaft the publication indicates that cam shaft is carried on 3 or 5 bearings mounted in the block.
It is pertinent to mention here as pointed out by Addl. Collector himself that the Inspection Report of Machinery Expert of Customs was not contested by their own engineer. Considering the detailed report of machinery expert and other technical aspects relating to bearings, we are satisfied that there is no infirmity in the order of Collector (Appeals) in regard to his finding arrived at in regard to the character of the goods. We have also not been able to persuade ourselves to accept the plea that since these bearings are classifiable as spares under Heading 85.03 for use principally or solely with diesel generating set, they could be cleared under OGL as spares. Entry 489 of Appendix 3 Part A of AM 1988-91 policy mentions the words engine bearing and bushes. It is claimed that even if these are treated as engine bearings these bearings being spare bearings could be cleared under OGL as spares. Addl. Collector has fully dealt with this plea.
Once the value restriction has been placed on bearings, the same bearings cannot be imported as spares without any value restriction. We are, therefore, not in a position to accept that the character of the case would change even if the plea regarding classification of the Customs Tariff Act is accepted.
6. In view of what is mentioned hereinbefore, we are satisfied that on merits there is no infirmity in the order of Addl. Collector.
Considering however that the appellant is actual user who was not engaged in trading. We are of the view that ends of justice would be met if redemption fine is reduced from Rs. 7 lakhs to Rs. 3.5 lakhs.
Ordered accordingly. We do not consider any modification in regard to penalty is merited. Subject to this modification, the appeal is otherwise rejected.