ORDER
A.J.F. D’Souza, Member (T)
1. The Revision Application dated 15-2-1979 against Order-in-Appeal No. S/49-872/77GS, dated 8-8-1978/16-8-78 passed by the Appellate Collector of Customs, Bombay has been transferred by the Government of India to the Tribunal for disposal under Section 131B(2) of the Customs Act, 1962.
2. A consignment of “Loco Tyres as per Contract No. 73/RS/WTA/61 Tyres/874/l (Semi-finished for Rly. Rolling Stock)” consisting of two types in quantities of 457 and 35 pieces respectively was imported and assessed to duty under Heading 63(28)FN ICT vide Bill of Entry GSI No. 224, dated 13-6-1974. A claim for re-assessment on two counts (1) on revised c.i.f. value and weight and (2) as loco parts under ICT 72(3)/72(a) at 40%. Since the Bill of Lading No. 44 was not declared in the Bill of Entry, which only mentioned. Bill of Lading No. 42 and the only evidence produced is the supplier’s letter that they are forwarding the revised invoice cancelling the earlier invoice dated 30-3-1974 is considered incomplete inasmuch as it is not substantiated why the value had to be amended, the Assistant Collector rejected the claim. Before the Appellate Collector it was contended that the refund was on account of short shipment of “Tyres rolled” and the goods should also be re-assessed under Item 73(3)/72(a) instead of assessment on merits in support of which a certificate from the Deputy Chief Mechanical Engineer, Loco “showing that machinery cost of each type is 4.5%. The appellants were given ten days notice to produce full correspondence in respect of the short shipment and also independent documentary evidence like a letter from the supplier confirming short shipment. No other evidence whether the goods were subsequently cleared on payment of duty or a credit note in respect of the short shipment was produced. The claim on count one was, therefore, rejected as unsubstantiated. As regards the other count, the Appellate Collector observed that the ‘certificate showing cost of the tyres does not give full particulars of machinery (Like bearing and grieving) at various operations of finishing and the certificate is not acceptable”. No other independent documentary evidence having been produced, the appeal on this count was also rejected.
3. In the present appeal it is clarified that this is not a case of shortshipment as presumed by the Appellate Collector but a case of discrepancy due to wrong shipment of two types of tyres instead of one type. Instead of 457 Nos. of type 361 but 380 Nos. of this type were shipped and 77 pieces of type 409 were wrongly shipped. Thus there was discrepancy in the total cost as well as the weight which needed amendment to the original invoice. Accordingly, a revised invoice showing the correct consignment as actually shipped was obtained and is submitted along with the original invoice, the supplier’s letter, as well as the Local Agent’s letter. The amended weight according to the revised invoice is awaited from the suppliers. The ten days notice issued on 27-6-1977 mentioned by the Appellate Collector was not received and hence the appellant was not aware of any information required by him till the rejection order was received. Regarding re-assessment under Item 72(3)/72(a), the ultimate user has furnished the cost of machining for finishing purposes namely 4.5% of the c.i.f. value for type 361, 4.55% for type 409. Being less than 5%, these tyres are eligible for re-assessment in view of Ministry of Finance letter?. No. 355/162/73-Cus. I, dated 9-1-1974. They, therefore, request orders for grant of refund based on the merits of the case.
4. Shri Krishnan reiterated these contentions. He stated that there was a mistake in shipment of the tyres that were ordered and the documents had now been corrected. The goods were actually covered by Bills of Lading Nos. 42 and 44 covering 457 pieces and 35 pieces respectively. Instead of 77 Nos. of type 361/R an equivalent number of type 409/R was wrongly sent under Bill of Lading No. 42. A revised invoice for the value of 380 Nos. Type 361/R and 77 Nos. Type 409/R was obtained on 8-8-1975. A letter dated i7th/20th September, 1974 to M/s. Colmex, Warsaw in this connection clarifying the need for the revised invoice is filed. As regards the other ground, Shri Krishnan stated that the letter dated 9-1-1974 of the Ministry of Finance to the Railway Ministry clearly states that semi-finished components of rolling stock, of which machinery cost, for finishing purposes, is over five per cent of the value are classified under 63(28) ICT and auxiliary duty @10% is leviable and the proposal for levy @ 5% made by the General Manager, Central Railway cannot be accepted. It was clear from this that if finishing cost is less than 5% of, the value of semi-finished components of rolling stock, as certified in this case the components are not classifiable as manufactures of iron or steel but as components of locomotives.
5. Shri Kunhikrishnan, after looking into the documents, agreed that on the basis of the revised invoice, the claim for re-assessment on the value of goods actually received would be admissible. The difference in duty would, however, have to be ascertained by the Assistant Collector. As regards the second ground, the Departmental Representative strongly argued against it. Under the ICT there was no provision corresponding to the Interpretative Rule under the CTA regarding classification of an incomplete or unfinished article in the same manner as the finished article, if it has its essential character. Hence it was the practice to treat semi-finished steel articles as such for purposes of ICT and not as the finished articles. The letter of the Ministry of Finance was being quoted out of contest by the appellants and the goods were rightly classified by the lower authorities.
6. In the circumstances, the Tribunal accepts the first ground and directs that the assessment be revised on the values now furnished. As regards the second ground, prima facie, the goods imported are locomotive tyres and they are designed for the railways, so they cannot be treated as other articles of iron or steel. That they require some machining, in order to fit them to the wheels, is only incidental and does not seem to alter their basic character. The letter of the Government of India, more particularly being of the Ministry of Finance, has to be given due regard. From this it is clear that the request of the appellants to treat these loco tyres as components of locomotives under ICT 72 (3) read with 72(a) is not unreasonable. We, therefore, accept the appeal on this ground also. To this extent we set aside the order appealed against and refer the case back to the Assistant Collector for re-assessment in the light of our findings with consequential relief to the appellants.