Case Law Details
JH-Welltec Machines (India) Pvt. Ltd. Vs Commissioner of Customs (NS-I) (CESTAT Mumbai)
No Anti Dumping Duty applicable if plastic injection mould Machine was completely manufactured using Domestic Equipment
Conclusion: Anti-dumping duty (ADD) was not applicable when plastic injection mould machines(PIMM) were completely manufactured using domestic equipment. Since manufacturing activity undertaken by assessee and payment of Central Excise duty on such activity was acknowledged and not disputed by the jurisdictional Central Excise authorities, the same could not be questioned by the Customs department without any clinching evidence that such machine in question was imported into India as such or in un-assembled condition, and no further activities were undertaken thereto to complete the process of manufacture and installation etc.
Held: Assessee-company was engaged in the manufacture of Plastic Injection Moulded Machines (PIMM) and was duly registered with the Central Excise department, having jurisdiction over the factory of such manufacture of the excisable goods. PIMM was a machine used for manufacturing a wide variety of plastic products like caps of plastic bottles, automobile parts etc., by injection moulding process. For the manufacture/assembly of the PIMM, assessee had imported various parts from M/s Welltec Machinery Ltd., China. Assessee and the overseas supplier were related persons in terms of Rule 2(2) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 and accordingly, assessee got itself registered with the Special Valuation Branch (SVB), New Custom House, Mumbai for valuation of the imported equipment/parts. Assessee had also claimed that it had domestically procured certain parts and equipment for the manufacture of the complete PIMM and that it had discharged the Central Excise duty liability on the manufacture of such goods. In the matter of import of all kinds of plastic processing or injection moulding machines, an investigation was conducted by the Designated Authority (DA) in the Department of Commerce. In the preliminary findings, vide Notification No. 14/12/2008-DGAD, dated 10.02.2009, the DA had concluded that the subject goods had entered the Indian market from the subject country at prices less than the normal value in the domestic market of the exporting country. The Customs department had conducted an inquiry about horizontal plastic injection moulding machines imported by assessee. They had alleged that assessee had imported such goods from M/s Welltec Machinery Ltd., China in the guise of “parts and components” with the sole intention to evade anti-dumping duty leviable as per notification dated 12.05.2009, as amended by notification dated 23.10.2010. During the search operation at the appellant’s factory, the said officers found that in respect of past consignments, assessee had evaded payment of anti-dumping duty. The Department had concluded that assessee in connivance with its related foreign supplier had adopted various modus operandi and imported assemblies/sub-assemblies of PIMM of capacity between 90 Ton to 750 Ton in SKD/CKD condition by willfully mis-declaring and misclassifying the imported goods as parts, components and spare parts to evade ADD amounting to Rs.19,68,98,069/-. The department had proposed for rejection of the classification of imported parts of PIMM under CTI 8477 9000 /7318 1100 and classified the same under CTI 8477 1000 to confirm the demand of ADD under Section 28(4) of the Customs Act, 1962. The department had issued the show cause notice dated 28.07.2015 to assessee calling upon them to show cause as to why the subject goods seized under the provisions of Section 110, and subsequently released provisionally, shall not be confiscated under Section 111(d) and 111(m) ibid. The declared classification of the imported goods under CTI 8477 9000 / 7318 1100 should not be rejected and to be classified under CTI 8477 1000 for assessment and levy of ADD amounting to Rs.19,68,98,069/- as per notification dated 12.04.2009 and 23.03.2010; interest on the ADD payable under the disputed Bills of Entry should not be charged under Section 28AA ibid; and penalty should not be imposed on the appellants under Section 112(a) and 114A ibid. The Principal Commissioner of Customs had confirmed the proposals made in the SCN. It was held that admittedly since the PIMM, complete in all respects was manufactured in India by using the domestically procured goods also, such imported equipment, should not be subjected to levy of ADD. Therefore, the adjudged demands confirmed in the impugned order could not be sustained for judicial scrutiny. Further, it was not the case of Revenue that assessee did not pay central excise duty on the PIMM manufactured by them in their factory located in Ahmedabad. Since, manufacturing activity undertaken by assessee and payment of Central Excise duty on such activity was acknowledged and not disputed by the jurisdictional Central Excise authorities, the same could not be questioned by the Customs department without any clinching evidence that such machine in question was imported into India as such or in un-assembled condition, and no further activities were undertaken thereto to complete the process of manufacture and installation etc.
FULL TEXT OF THE CESTAT MUMBAI ORDER
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