intersil (India) Limited Vs. Collector of Customs - Court Judgment

Excerpt:
1. the above appeal arises out of the order of collector of customs (appeals), bombay denying the benefit of notification no. 227/79 to time recorders imported by the appellants herein for installation in their works at the export processing unit (seepz), bombay on the ground that time recorders were in no way to be considered as promoting exports of electronic goods. in this case the appellants were manufacturing ics. the claim of the appellants is that the time recorders are very sophisticated machines and were imported to increase production efficiency. they serve the purpose of accurately monitoring production of the workers, enabling the appellants to compute their productivity in terms of the ic units produced per hour. the appellants claim that these imported items have minimised the waste of time of the workers for punching the cards and the extra time saved has resulted in increased production of ics during the same number of working hours and at the same cost.2. notice of today's hearing was issued to the appellants. however, none has appeared nor is there any request for adjournment, therefore, we proceed to hear the ld. dr and proceed with the case. "goods imported for use in santa cruz electronics export processing zone. in exercise of the powers conferred by sub section (1) of section 25 of the customs act, 1962 (52 of 1962), and in suspersession of the notification of the government of india in the ministry of finance (deptt. of revenue and insurance) no. 79-customs, dated the 16th october, 1974, the central government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods specified in the annexure to this notification (hereinafter referred to as goods) when imported into india for use within the santa cruz electronics export processing zone (hereinafter referred to as the zone) comprising of plot no. f-1 in the maharashtra industrial development corporation's marel industrial area and enclosed by the boundaries specified in paragraph 2, in connection with the manufacture or packaging of electronic goods for export out of india, or with the promotion of such exports of electronic goods, from the whole of the duty of customs leviable thereon under the first schedule to the customs tariff act, 1975 (51 of 1975), and the additional duty, if any, leviable thereon under section 3 of the second mentioned act, subject to the following conditions namely...."6. tools, jigs, gauges, fixtures, moulds, dies, instruments and accessories.8. office equipment, spares and consumables thereof.9-12 . . . .4. the claim of the appellants that the goods in question have been imported to india in connection with promotion of exports of electronic goods is not acceptable as the time recorders in no way promote the export of electronic goods. they are only to be considered as an apparatus designed for recording the time intervals and therefore they cannot be brought within the scope of any one of the categories specified in the annexures to the above mentioned exemption notification. the orders of the authorities below proceed on the basis that the item will compute wages and enforce discipline and result in the workers' performance increased and not for the betterment of the production of the export of ics. the appellants have not placed any convincing arguments in support of their contention to the benefit of the notification. hence, having regard to the nature of the items imported and the scope of the notification, we see no reason to interfere with the orders of the appellate authority and accordingly confirm the same and reject the appeal.while i agree with my learned colleague, i would also like to mention that in the order-in-original it has been mentioned that the goods have been described as 'time recorder' and classified under heading 91.01/11 in the bill of entry. this heading reads as follows:- clocks and watches of all types; time of day recording apparatus; apparatus with clock or watch movements or with synchronous motor, for measuring, recording or otherwise indicating intervals of time; time switches with clock or watch movement or with synchronous motor; parts of all the above articles;(1) not elsewhere specified 100%(2) watches, all sorts; and parts thereof 100% 44(3) clocks, all sorts, and parts therof 100% 44 5. the customs tariff deals with machinery, office equipment, tools and jigs and watches separately, but in their appeal memorandum petitioners have referred to all possible things; from their point of view the goods could be either machinery or tools, jigs, gauges, fixtures, moulds, dies, instrument and accessories or they could be treated as office equipment for all they care. however this is certainly not the way we could look at an item(s) either for classification or for exemption notification purposes and it was required on the part of the person claiming the benefit of an exemption notification to exactly specify the item and indicate the basis on which the claim is being made. no one has appeared before us and neither any catalogue, technical literature or any other material has been produced before us to show that the item attracts any of the serial numbers indicated in the annexure to the notification. i therefore, entirely agree with my ld. colleague and reject the petition.

Judgment:
1. The above appeal arises out of the order of Collector of Customs (Appeals), Bombay denying the benefit of Notification No. 227/79 to time recorders imported by the appellants herein for installation in their works at the Export Processing Unit (SEEPZ), Bombay on the ground that time recorders were in no way to be considered as promoting exports of electronic goods. In this case the appellants were manufacturing ICs. The claim of the appellants is that the time recorders are very sophisticated machines and were imported to increase production efficiency. They serve the purpose of accurately monitoring production of the workers, enabling the appellants to compute their productivity in terms of the IC Units produced per hour. The appellants claim that these imported items have minimised the waste of time of the workers for punching the cards and the extra time saved has resulted in increased production of ICs during the same number of working hours and at the same cost.

2. Notice of today's hearing was issued to the appellants. However, none has appeared nor is there any request for adjournment, therefore, we proceed to hear the Ld. DR and proceed with the case.

"Goods imported for use in Santa Cruz Electronics Export Processing Zone. In exercise of the powers conferred by sub section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), and in suspersession of the notification of the Government of India in the Ministry of Finance (Deptt. of Revenue and Insurance) No. 79-Customs, dated the 16th October, 1974, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods specified in the Annexure to this notification (hereinafter referred to as goods) when imported into India for use within the Santa Cruz Electronics Export Processing Zone (hereinafter referred to as the Zone) comprising of plot No. F-1 in the Maharashtra Industrial Development Corporation's Marel Industrial Area and enclosed by the boundaries specified in paragraph 2, in connection with the manufacture or packaging of electronic goods for export out of India, or with the promotion of such exports of electronic goods, from the whole of the duty of Customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), and the additional duty, if any, leviable thereon under section 3 of the second mentioned Act, subject to the following conditions namely...."6.

Tools, jigs, Gauges, Fixtures, Moulds, Dies, Instruments and Accessories.8.

Office Equipment, spares and consumables thereof.9-12 . . . .

4. The claim of the appellants that the goods in question have been imported to India in connection with promotion of exports of electronic goods is not acceptable as the time recorders in no way promote the export of electronic goods. They are only to be considered as an apparatus designed for recording the time intervals and therefore they cannot be brought within the scope of any one of the categories specified in the annexures to the above mentioned exemption notification. The orders of the authorities below proceed on the basis that the item will compute wages and enforce discipline and result in the workers' performance increased and not for the betterment of the production of the export of ICs. The appellants have not placed any convincing arguments in support of their contention to the benefit of the notification. Hence, having regard to the nature of the items imported and the scope of the notification, we see no reason to interfere with the orders of the appellate authority and accordingly confirm the same and reject the appeal.

While I agree with my learned Colleague, I would also like to mention that in the Order-in-Original it has been mentioned that the goods have been described as 'Time Recorder' and classified under Heading 91.01/11 in the Bill of Entry. This heading reads as follows:- Clocks and watches of all types; time of day recording apparatus; apparatus with clock or watch movements or with synchronous motor, for measuring, recording or otherwise indicating intervals of time; time switches with clock or watch movement or with synchronous motor; parts of all the above articles;(1) Not elsewhere specified 100%(2) Watches, all sorts; and parts thereof 100% 44(3) Clocks, all sorts, and parts therof 100% 44 5. The Customs Tariff deals with machinery, office equipment, tools and jigs and watches separately, but in their appeal memorandum petitioners have referred to all possible things; From their point of view the goods could be either machinery or tools, jigs, gauges, fixtures, moulds, dies, instrument and accessories or they could be treated as office equipment for all they care. However this is certainly not the way we could look at an item(s) either for classification or for exemption notification purposes and it was required on the part of the person claiming the benefit of an exemption notification to exactly specify the item and indicate the basis on which the claim is being made. No one has appeared before us and neither any catalogue, technical literature or any other material has been produced before us to show that the item attracts any of the serial numbers indicated in the annexure to the notification. I therefore, entirely agree with my Ld. Colleague and reject the petition.