Final Order Nos. 1874 & 1875/98 arising from in Appeal Nos. E/1238/92-B2 & E/1242/92-B2. Case: Wipro Ge Medical Systems Ltd. Vs Commr. of Customs, Bangalore. CEGAT (Customs, Excise & Gold (Control) Appellate Tribunal) & CESTAT (Customs, Excise and Service Tax Appellate Tribunal)

Case NumberFinal Order Nos. 1874 & 1875/98 arising from in Appeal Nos. E/1238/92-B2 & E/1242/92-B2
CounselFor Appellant: Shri Rajesh Chander Kumar, Advocate and For Respondents: Shri R. Victor Thiagaraj, SDR.
JudgesShri S.L. Peeran, Member (J) and V.K. Ashtana, Member (T)
IssueCentral Excise Act, 1944 - Section 2(f)
Citation1999 (106) ELT 169 (Tribunal)
Judgement DateSeptember 29, 1998
CourtCEGAT (Customs, Excise & Gold (Control) Appellate Tribunal) & CESTAT (Customs, Excise and Service Tax Appellate Tribunal)


V.K. Ashtana, Member (T), (South Zonal Bench At Madras)

  1. These 2 appeals are on same issue and hence they are heard together and considered by a common order.

  2. Appeal No. C/1238/92-B2 is against Order-in-Original No. S8/14/92 ICD, dated 30-10-1992 and Appeal No. C/SB/1242/92-B2, dated 25-11-1992, both passed by Collector of Customs.

  3. Briefly, the issue involves import of 2 sets of CAT scan system, allegedly in SKD/CKD condition under two Bills of Entry, each involving a declared value of Rs. 70,96,984/- which was reassessed by the impugned order to Rs. 1,54,05,000/-. Appellants face penalty of Rs. 7 lakhs and Redemption Fine of Rs. 15 lakhs. They claimed exemption under Notification No. 66/88-Cus., dated 1-3-1988 while in its stay order, Hon''ble Tribunal directed deposit of duty @ 40% ad valorem (BED) under Notification No. 65/88-Cus., dated 1-3-1988.

  4. The two issues for consideration are - 

    (i) whether imported goods are a CAT scan system in SKD/CKD condition, or merely parts thereof; and

    (ii) whether goods are under-valued and have been correctly reassessed to the higher value in impugned order?

  5. Heard learned Advocate Shri Rajesh Chander Kumar for appellants and learned SDR Shri R. Victor Thiagaraj for department.

  6. Learned Advocate submits that with respect to Appeal No. C/1242/92-B2 covering Bill of Entry No. 594, dated 16-7-1992.

    (i) goods are parts of CAT scanner;

    (ii) hence exemption under 66/88-Cus., dated 1-3-1988 is available and

    (iii) goods are wrongly reassessed to higher value.

    In support of (i) and (ii) above he submits that:

    (a) Out of 6 components, only 5 are imported and the power phase convertor (Transformer etc.) is manufactured by them to suit specific design of the system as such high load of current cannot be drawn in India on a single phase. Without this component, system cannot work;

    (b) All imported components are unpacked and systematically assembled and tested at each stage. These operations involve about 30 stages as charted in appeal and are done by trained technical staff in a factory put-up on expenditure of about Rs. 1.2 crores. Hence, this is not a screw-driver technology. Tests include alignment and software integration;

    (c) These operations amount to ''manufacture'' of a new CAT scan system and Department required them to pay Central Excise Duty on it as manufacturer thereof under sub-heading 9022.00 of CETA, 1985; and

    (d) Technical opinion of Indian Radiological & Imaging Association is that without these 30 operations, the system is not workable. Exporters also certify that it is not a complete system.

  7. Learned Advocate further argues that in view of following decisions, Interpretative Rule 2A (applied by ld. Collector in impugned orders) cannot be applied to deny benefits under Notification 66/88 (supra):-

    1997 (90) ELT 57 (Tribunal) - Nippon Precesion Bearings

    1996 (16) RLT 646 (Tribunal) - Maruti Udyog.

  8. Learned Advocate further argues that even assuming that the said Rule 2(a) is applicable, even then the goods imported are not a complete system in view of...

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