Judgment:
1. The issue for determination in this appeal is the eligibility of materials/sub-systems for Digital Electronic International Gateway Exchanges imported by the appellants herein to the benefit of Notification 59/88-Cus. in terms of SI. No. (iv)3 of the Table annexed thereto - the benefit has been denied by the lower authorities for the reason that the Notification covers complete Digital International Gateway Exchange but does not cover sub-systems thereof.
2. We have heard Shri Pradeep Jain, learned Advocate and Shri K.K. Jha, learned DR. The appellants imported Digital Electronic International Gateway Exchanges two and a half years prior to the date of the present import which is November, 1992 and the benefit of Notification 59/88 was extended thereto. The complete exchange provides compatible International signalling with local exchanges and with the International exchanges of distant countries. It consists of many sub-systems like main processor, PCM systems, Digital codes senders and receivers, common channel signalling sub-system etc. The capacity of the exchange is mainly determined by the main processor unit. In the present case, the exchange imported earlier is equipped with the main processor which can handle up to 16 lakhs calls attempts in one hour.
The exchange purchased from M/s. Ericsson in 1990 has the main processor unit capable of handling 16 lakhs call attempts per hour but since the traffic requirements at that time were less, the appellants did not import the other sub-systems dimensioned to the full capacity of the exchange receiving 30,000 International lines. The present import was for the purpose of increasing the capacity of the already imported exchange from 690 to 3900 lines by purchasing the requisite add on modules of the various systems of the exchange, 3. The Bill of Entry in this case, describes the goods as "Digital Electronic International Gateway Exchange, as per the invoice attached" and the invoice describes the goods as "materials for Digital Electronic International Gateway Exchanges at Delhi for their first expansion". The appellants claimed assessment under Customs Tariff sub-heading 8517.30 together with the benefit of Notification 59/88 and paid the duty of Rs. 5,93,77,809/-. According to the department, the goods fall under sub-heading 8517.90 and the Notification benefit was not available and therefore, the appellants were liable to pay total duty of Rs. 9,92,75,442/-. The amount was paid by the appellants under protest and subsequently, refund was claimed of duty of Rs. 3,96,97,637'/- paid in excess.
4. The appellants admit that the imported item is a Sub-system for Digital Electronic International Gateway Exchange and they did not dispute the classification under sub-heading 8517.90 which covers parts of electrical apparatus for the telephony or ... and telecommunication apparatus for digital line system. The invoice also shows that the imported goods consist of Trunk and Signalling Sub-system, Group Switching Sub-system, Central Processor Sub-system. Common Channel Signalling Sub-system, Central Processor Subsystem. Wherever exemption has been extended to sub-systems. Notification 59/88 makes a specific mention to this effect, for example, at SI. No. (i) 23, SI. No. (vii) 48 and SI. No. (viii) 16. Sub-systems of item at SI. No. (iv) claimed by the appellants are not specifically mentioned. Therefore having regard to the clear wording of the Notification, sub-systems are not covered thereunder. The argument of the learned Counsel for the appellants that subsequent import of the sub-system was to increase the capacity which was initially lesser, does not advance the case of the appellants relating to claim for exemption from duty under the Notification. The question of reading in intention of the legislature, which according to the appellants, was to provide for exemption even to sub-systems, does not arise in the face of clear wording of the Notification which covers only 'Digital Electronic International Gateway Exchange' at SI. (iv) 3 of the table annexed thereto and which is claimed by the appellants. Since sub-systems are not covered therein, the benefit of the notification has rightly been held not to be available to the imported goods.
5. Accordingly, we see no infirmity in the impugned order and therefore, confirm the same and reject the appeal.