Tata Electronic Development Vs. Collr. of Cus. - Court Judgment

Excerpt:
1. the appellants assailed the order of the collector of customs (appeals), madras who has upheld the order of the assistant collector by which the item imported by them viz. duo strips and dual purpose gaskets had been denied the benefit of duty free exemption available under notification 206/76 on the ground that the imported item is neither components, spares, stores, etc., required for the manufacture and testing of guided weapons and their accessories, but were in the nature of raw materials. the items had been imported by the appellants on behalf of ministry of defence. the dispute does not relate to the use of the item viz. use in the manufacture and testing of guided weapons and their accessories; the dispute is only in regard to the nature of the imported item, whether components as claimed by the assessees or raw materials as claimed by the department.2. we have heard smt. r. pant. the appellants have asked for a decision on merits. the reason given by the appellate authority in holding that the items imported was in the nature of raw materials is that it consists of two portions viz. foam-like and wire mesh portion; the former is for sealing the moisture content and the latter is for sealing the electro magnetic field. in the form in which it is imported, it cannot be used directly; it is in running length and it has to be cut to size before its application in the specified area.learned dr draws our attention to the order of the tribunal - final order no. 449/88-b2, dated 23-8-1988 in which the tribunal held that only ready for fitment parts would be considered as component parts for machines and since the parts imported were in running length, they did not qualify as components. the appeal of the importers in that case i.e. otis elevators was dismissed by the hon'ble supreme court vide order dated 2-2-1995 as reported in 1995 (78) e.l.t. a219. we, therefore, agree with the learned sdr that the items imported by the appellants herein which are in running length and had to be cut to size before use, are in the nature of raw materials and not components. the fact that ministry of defence has issued a certificate for customs duty exemption does not automatically entitle the appellants to the benefit of notification 206/76, as the applicability thereof is to be considered by the customs authorities, who alone are competent to apply the notification. we, therefore, do not agree with the appellants that once such a certificate has been issued all that remains to be done is to extend the benefit of the notification. in the light of the above discussion, we see no reason to interfere with the finding of the authorities below, hold that the imported item is not covered by notification 206/76, uphold the impugned order and reject the appeal.

Judgment:
1. The appellants assailed the order of the Collector of Customs (Appeals), Madras who has upheld the order of the Assistant Collector by which the item imported by them viz. duo strips and dual purpose gaskets had been denied the benefit of duty free exemption available under Notification 206/76 on the ground that the imported item is neither components, spares, stores, etc., required for the manufacture and testing of guided weapons and their accessories, but were in the nature of raw materials. The items had been imported by the appellants on behalf of Ministry of Defence. The dispute does not relate to the use of the item viz. use in the manufacture and testing of guided weapons and their accessories; the dispute is only in regard to the nature of the imported item, whether components as claimed by the assessees or raw materials as claimed by the Department.

2. We have heard Smt. R. Pant. The appellants have asked for a decision on merits. The reason given by the appellate authority in holding that the items imported was in the nature of raw materials is that it consists of two portions viz. foam-like and wire mesh portion; the former is for sealing the moisture content and the latter is for sealing the electro magnetic field. In the form in which it is imported, it cannot be used directly; it is in running length and it has to be cut to size before its application in the specified area.

Learned DR draws our attention to the order of the Tribunal - Final Order No. 449/88-B2, dated 23-8-1988 in which the Tribunal held that only ready for fitment parts would be considered as component parts for machines and since the parts imported were in running length, they did not qualify as components. The appeal of the importers in that case i.e. Otis Elevators was dismissed by the Hon'ble Supreme Court vide order dated 2-2-1995 as reported in 1995 (78) E.L.T. A219. We, therefore, agree with the learned SDR that the items imported by the appellants herein which are in running length and had to be cut to size before use, are in the nature of raw materials and not components. The fact that Ministry of Defence has issued a certificate for Customs Duty exemption does not automatically entitle the appellants to the benefit of Notification 206/76, as the applicability thereof is to be considered by the Customs authorities, who alone are competent to apply the Notification. We, therefore, do not agree with the appellants that once such a certificate has been issued all that remains to be done is to extend the benefit of the Notification. In the light of the above discussion, we see no reason to interfere with the finding of the authorities below, hold that the imported item is not covered by Notification 206/76, uphold the impugned order and reject the appeal.