ORDER
Harish Chander, Member (J)
1. M/s. Nikon Systems Pvt. Ltd., NOIDA, have filed an appeal being aggrieved from the order-in-original No. 63/87, dated 29.9.1987 passed by the Additional Collector of Customs, New Delhi. Briefly the facts of the case are that the clearing agents of the appellant had filed three bills of entry on behalf of M/s. Nikon Systems Pvt. Ltd., NOIDA (U.P.) in the Customs I.C.D., Pragati Maidan, New Delhi for clearance of the goods mentioned against each bill of entry detailed below:
——————————————————————————–
B/E. Description of goods declared for clearance in Col. 6 of No. of cartons No. Bill of Entry. -------------------------------------------------------------------------------- 196 C.T.V. Components - Plastic Extruded/Parts 102 197 Colour Picture Tube with deflection yoke 100 198. C.T.V. Components 110 (i) capacitors, IC's Resistors, Rectifiers, Delay Line, connectors, Potentiometer, Transistors, PCBs Degainising Oil (ii) I.F. Toner (iii) Remote Control -------------------------------------------------------------------------------- The appellant had attached the following documents along with the bills of entry: (a) Bill of Entry No. 196
(i) Invoice No. 24282/PF/86, dated 29.12.1986 for US $ 2,950.00 CIF New Delhi for 100 Plastic Extruded/Moulded Parts with Metal fitting issued by M/s. Pawa Brothers Trading Pvt. Ltd., Singapore.
(ii) Packing List dated 29.12.86.
(iii) Certificate of origin No. 000562, dated 3.1.87 issued by Singapore Indian Chamber of Commerce showing that the goods are of Japan origin.
(iv) Insurance Policy No. 502/81/1/125725/87, dated 2.1.87 issued by M/s. United Insurance Co. Ltd., Singapore.
(v) Bill of Lading No. 226682, dated 30.12.86 issued by M/s. American President Lines Ltd. at Singapore for 102 Kgs. Numbering 1-100,105 and 111.
(vi) Photo copy of certificate (Registration as a small scale Industrial Unit) No. 5329, dated 23.12.86 issued by Area Development Officer, Directorate of Industries, NOIDA, Distt. Ghaziabad.
(vii) Annexure to Appendix II-A showing allotment of code No. D 8503106, dated 23.12.85.
(viii) Declaration under Section 46 of the Customs Act, 1962 signed by the Importers that the contents of invoice, Bill of Lading and declaration made in the bill of entry is true and correct in every respect.
(b) Bill of Entry No. 197
(i) Invoice No. 24282/CJ/86, dated 29.12.86 for US $ 6,500.00 CIF New Delhi for 100 sets colour picture tube with Deflection yoke issued by M/s. Pawa Brothers Trading Pvt. Ltd. Singapore.
(ii) Packing List dated 29.12.86
(iii) Certificate of origin No. 000563, dated 3.1.87 issued by Singapore Indian Chamber of Commerce showing that the goods are of Japan Origin.
(iv) Insurance Policy No. 502/81/1/125724/87, dated 2.1.87 issued by M/s. United Insurance Co. Ltd. at Singapore.
(v) Bill of Lading No. 226872, dated 30.12.86 issued by M/s. American President Lines Ltd. at Singapore for 100 Pkgs (Cartons) numbering 1-100.
(vi) Declaration under Section 46 of the Customs Act, 1962 signed by the Importers that the contents of invoice bill of lading and declaration made in the bill of entry is true and correct in every respect.
(c) BUI of Entry No. 198
(i) Invoice No. 24282 dated 29.12.86 for US $ 7,100.00 CIF New Delhi for 100 sets of Electronic components issued by M/s. Pawa Brothers Trading Pvt. Ltd., Singapore.
(ii) Packing List dated 29.12.86.
(iii) Certificate of Origin No. 00054, dated 3.1.87 issued by Singapore Indian Chamber of Commerce showing that the goods are of Japan Origin.
(iv) Insurance Policy No. 502/81/1/125726/87, dated 2.1.87 issued by M/s. United India Insurance Co. Ltd. at Singapore.
(v) Bill of Lading No. 226871, dated 30.12.86 issued by M/s. American President Lines Ltd. at Singapore for 110 cartons bearing numbers 1-100,101-104,106-110 and 112.
(vi) Photo copy of Registration Certificate No. 5329 as mentioned against bill of entry No. 196 above.
(vii) Photo copy of letter No.ADO/NOIDA/Import/AU/86-87, dated 21.1.87 issued by the Joint Director of Industries, NOIDA for concessional rate of customs duty.
(viii) Declaration under Section 46 of the Customs Act, 1962 signed by the Importers that the contents of the invoice, bill of lading and declaration made in the bill of entry are true and correct in every respect.
2. The bill of entry No.198 was subsequently amended and the appellant had deleted the words “P.C.B.s” which were initially mentioned against item (i) of the bill of entry after connectors and added after item (iii) “Remote Control”. The appellant had also amended the value after pasting a sheet of item (i) from Rs. 73.066/- to Rs. 30,868/- and of item (iii) from Rs. 10,626/:- to Rs. 52.814/-. Item (i) attracts duty @ 50% + 25% (No CVD claiming exemption under notification No. 232/83) and item (iii) attracts duty @ 100% + 40% + CVD £ 15%. The appellant had claimed clearance under O.G.L. Appendix 6, list 8, Part I, S.No.516 in respect of goods under import against bill of entry No.196,197 and 198. A part of consignment covered by Bill of Entry No.198 had been claimed against import licence No. P/K/3027843, dated 10.9.85 and also submitted letter of authority for the import licence for Rs. 45.000/-. There was an information that M/s. Nikon Systems Pvt. Ltd., NOIDA had imported 100 sets of Sony 2092 TV in SKD condition covered by the above mentioned bill of entry and, therefore, the bills of entry were called for investigation by the Special Investigation Branch of the Custom House. On examination of three consignments, it appeared that the goods under import were components of Sony TV 2092 MEZ Television which had been dismantled from complete sets. The following items were found either misdeclared or had not been declared :-
(1) Bill of Entry 196
(i) Gift Boxes : Not declared
(ii) Screws & Nuts : Declared as Metal Parts.
(2) Bill of Entry 197
(iii) Metal frames were found fitted with colour picture tubes in addition
to declaration of colour picture tubes with deflection yoke.
(3) Bill of Entry 198
(iv) Speakers & tweeters : Declared as tweeters
(v) Antena Socket Assemblies : Declared as Antena & Sockets
(vi) AC Cord assemblies with
switches : Declared as Harness with
connector and switches
(vii) Electrolytic capacitors
(set of 12) : Declared Electrolytic
capacitors (set of 8)
(viii) Transistor heat sink
assembly : Declared as Transistors.
It also appeared that the value declared for the goods was on the lower side. The adjudicating authority was of the opinion that the price of Sony 2092 ME TV which was equivalent to Model 2090 MEZ was US $ 285.00. This price was charged by M/s. Sony Corporation Tokyo, Japan vide invoice No.RB 875-AO, dated 24.4.86 and after allowing the discount of 15% the value of one set in SKD would come to US $ 242.50 CIF and the total value of the goods under import was as under:-
——————————————————————————–
Bill of Entry No.196 - US $ 3,200.00 or Rs. 41,188.50
Bill of Entry No.197 - US $ 6,500.00 or Rs. 85,695.45
Bill of Entry No.198 - US $ 14,550.00 or Rs. 1,91,826.00
--------------------------------------------------------------------------------
US $ 24,250.00 or Rs. 3,19,710.00
--------------------------------------------------------------------------------
The learned Addl. Collector was of the view that there was misdeclaration of the value of all the three bills of entry to the tune of Rs. 1,01,515.00 and the goods were liable to confiscation under Section 111(m) of the Customs Act, 1962. It was further observed that the following goods did not conform to the description in the invoices:-
——————————————————————————–
Invoice description Goods actually found Value appraised
--------------------------
per pcs/set Total for 100
pcs/sets
--------------------------------------------------------------------------------
1. Cabinet Fitted with metal frames US $ 29.50 Rs. 38,892.55
etc. (declared)
2. Tweeters Speaker & Tweeters as- US $ 4.00 Rs. 5,273.57
semblies
3. Transistors Transistor heat Sink as- US$2.85 Rs. 3,757.42
sembly
4. Electrolytic capacitors (set Electrolytic capacitor(setUS$4.50 Rs. 5,932.76
of 8) of 12)
5. Not declared (a) Metal fittings (screws,US $ 0.50)
nuts etc.) ) Rs. 3,296.00
)
(b) Gift Boxes _ US$2.00)
--------------------------------------------------------------------------------
CIF Rs.43,639.00 asses- Rs. 57,152.30
Sable
--------------------------------------------------------------------------------
The learned Addl. Collector was of the view that the goods were liable to confiscation under Section 111(1) and 111(m) of the Customs Act, 1962.
3. The appellant had sought clearance of the goods against REP Import Licence No. P/L/3027843, dated 10.9.85 valid for import in term of para 30(1) of 1977-78, Vol. II as were required for use in the appellant’s factory during 1977-78 subject to restrictions laid down therein and also subject to the conditions that the licence would not be valid for item covered by Appendix 2 Part A and canalised item covered by Appendix 5 Part B of the Import and Export Policy 1985-88 Vol. I, under S. No.122 of Appendix 2B of the Import Policy Consumer goods in SKD conditions were not allowed. The learned Addl. Collector was of the view that the following items were covered by S. No. 610 of Appendix 3-A of Import Policy 1985-88 required valid licence :-
——————————————————————————–
For 100 pcs.
——————————————————————————–
(i) Cabinet sub-assembly @ 29.50 Rs. 38,892.55
US $
(ii) Picture Tube with yoke 65.00 Rs. 85,695.45
(iii) PCB's (Populated) (set 32.00 Rs. 42,188.53
of 5 PCS)
(iv)Transistor heat sink as- 2.85 Rs. 3,757.42
sembly (set of 4 pcs)
(v) Speaker tweeter assemb- 4.00 Rs. 5,273.57
ly
(vi) Antena Socket assembly 1.50 Rs. 1,977.59
(vii) Switch harness assy 1.25 Rs.1,947.39
The under-mentioned items were also not covered by OGL.
(viii Electrolytic capacitors 0.75 Rs. 988.79
(ix) Metal fittings (screws, 0.50 Rs. 659.20
nuts)
(x) Gift boxes 2.00 Rs. 2,636.80
--------------------------------------------------------------------------------
CIF Rs.1,73,829.32 Assessable Rs.1,83,717.2
--------------------------------------------------------------------------------
Thus the import of goods valued Rs.1,73,829.32 (CIF) (assessable Rs.1,83,717.29) appeared to be without the cover of a valid import licence and were liable for confiscation under Section 111(d) of the Customs Act, 1962. The appellant vide their letter dated 13.3.87 requested for waiver of issue of show cause notice and had also requested for personal hearing. The appellant had pointed out that the goods imported by them were not complete kits and all the items were declared in the invoice/packing list and the licence produced by them had been accepted by I.C.D. for clearance of similar goods vide para 30(1) of 1977-78 policy and the appellant had bonafide belief that the goods were covered and requested for a lenient view. The goods were re-examined and the Addl. Collector was of the view that the goods were sub-assemblies of colour TV 20″ of Sony KV-2092 as mentioned above. At the time of personal hearing vide their letter dated 13th April, 1987 the appellant had submitted that:
(a) they have cleared similar consignments through I.C.D. vide Bills of Entry Nos.1070,1071 and 1072, dated 19.7.86 against the licence which has also been submitted for clearance of the present consignments;
(b) the declared value in the above mentioned bills of entry had been accepted;
(c) the accepted value of SKD component set as accepted in the earlier consignment is US $ 160.50;
(d) Colour picture tubes of the similar specification and of the same manufactures have been allowed clearance under the above consignment under OGL;
(e) it was their first import against the above mentioned bills of entry Nos.1070,1071 and 1072 and the consignment under import was second consignment; (f) similar consignments had been imported by M/s. Rishi Electronics and M/s. Rhythem Electronic Systems; (g) submitted a list of items to be purchased from the local market;
(h) the components under import were discrete electronic components and some of the components were covered under List 8 Part I of Appendix 6. In view of this, the components as such would, under no circumstances, be covered under entry No. 610 of Appendix 3-A of 1985-88 policy as amended upto date.
The appellant had further referred to their correspondence with the suppliers. The learned Addl. Collector did not accept the contention of the appellant. He was of the view that the goods imported were not all SKD packs but there were certain discrete components also and were not complete parts of sub-assemblies forming colour TVs. The learned Addl. Collector was of the view that the goods worth Rs. 1,83,717.29 were imported without cover of any valid licence and the total value as per invoice was Rs.1,73,829.00 and the assessed value was Rs. 1,83,718.00. He was also of the view that the goods worth Rs.57,152.30 did not conform to the description as given in the invoice and as such were liable to confiscation under Section 111(m) and 111(1) of the Customs Act, 1962. On the point of valuation, he did not accept the invoice value on the ground that the CIF invoice value price of the present goods was US $ 165.60 per kit (Sony brand) and the CIF price of complete colour TV was US $ 285.00 per unit (vide invoice of Sony Enterprises, Japan dated 24.4.86 for model KV 2090 which was similar to model 2092 or the mail order catalogue price of US $ 434.00 per set of Sony model No.2092 E. The learned Addl. Collector had resorted to determine the value under Rule 8 of the Customs Valuation Rules, 1963 read with Section 14(1)(b) of the Customs Act, 1962. He had adopted the CIF value of TV model 2090 as US $ 242.50. He was also of the view that the goods valued at Rs. 173829/- (Rs.183718/- assessed) were not covered by OGL or licence submitted and were liable to confiscation under Section 111(d) of the Customs Act, 1962 and further the goods valued at Rs. 57,152/- as assessed were also liable to confiscation under Section 111(1) and 111(m) of the Customs Act, 1962. He had ordered the absolute confiscation of 100 pieces of PCBs valued at Rs. 42,189/- (as assessed) and the remaining item valued at Rs. 1,41,528.00 (as assessed) may be redeemed by the importer after a payment of fine of Rs. 1,00,000/- under Section 125 of the Customs Act, 1962 and had also imposed a penalty of Rs. 25,000/- under Section 112(a) of the Customs Act.
4. Being aggrieved from the aforesaid order, the appellant has come in appeal before the Tribunal.
5. Shri G.L. Rawal, the learned advocate with Miss Neerja Mehra, Advocate has appeared on behalf of the appellant. He has reiterated the facts and stated that the issue to be decided is whether the goods imported are sub-assemblies in terms of ITC serial NO. 610 Appendix 3 Part A or entry 565 electronics items Appendix 6 List 8 Part 1 AM 1985-88 Policy. Shri Rawal has argued that certain REP licences were issued under registration scheme for the Policy AM 1977-78. A scheme was sponsored by virtue of which an importer was also entitled to import certain articles. The question was whether the licences filed by the appellant covered the import or not. He has further argued that the appellant is a transferee of REP licence. He has referred to the scope of sub-para (2) of Para 31 of AM 1977-78 Policy. In terms of para 31(1) “If the nominee is a manufacturer of the product exported (i.e. a manufacturer of a product falling in the same serial number or sub-serial number, as the case may be, in which the exported products falls), the REP licence obtained by him will be valid for import of any raw materials, required for use in the licence-holder’s factory in the same manner and subject to the same restrictions as laid down in the case of a manufacturer exporter in para 30.” (2) If the nominee is a manufacturer of any other product not covered by sub-para (1) above, the REP licence obtained by him will be valid for the import of raw materials, components, consumable stores and packing material covered by his actual user licence/Release Order issued since 1st April, 1976. This will be subject to certain conditions/restrictions. Shri Rawal has argued that the colour picture tube imported is fitted with yoke and yoke comes fitted with all the picture tubes. The appellant has imported TV cabinets and cabinets are fitted with screws and the importation was of transistors with heat sink. The revenue authorities were of the view that since sub-assembly fell under S.No. 610 of Appendix 3 Part ‘A’, the licence holder was only entitled to import raw materials for wire ropes. Serial No. 610 of AM 1985-88 Policy of Appendix 3 Part ‘A’ reads as follows:
“610. Kits/ready to assemble sets, assemblies, sub-assemblies, modules, and combination thereof of all electronic items (excluding items mentioned in App. 6 List 8-Part I appearing at Sr.No. 609 but excluding electronic discrete components (unless individually mentioned elsewhere in this Appendix).”
He has referred to the impugned order at internal pages 5 to 7 where the learned Collector has discussed the details of ITC angle and the value. Shri Rawal has argued that the licence appears at page 92 of the paper book and the same was produced in respect of bill of entry No.1072 and a sum of Rs. 40,932/- was debited. He has referred to a judgment reported in 1978(2) ELT 552 in the case of Mercantile Express Co. Ltd. v. Assistant Collector of Customs and Others where it was held that the Customs authorities bound by their own decision. Since as per earlier verdict the clearance was allowed, the same should be allowed. Shri Rawal has further argued that a simple perusal of the order-in-original will show that though the Collector has himself admitted in the order that it is not a complete TV, but he has assessed it as a complete TV. He has also argued that the allegation of under invoicing is not correct in law as there is no direct evidence as to under invoicing. He has referred to the judgment of the Supreme Court in the case of Mahinder Singh Gill reported in AIR 1978 SC 851 at 858. He has laid special emphasis on para No. 8 of the said judgment. He has referred to the order-in-original at page 50 internal page 8. He has referred to a judgment of the Tribunal in the case of Takara Electronics of the Tribunal vide Order No. 607/85-A dated 6th August, 1985 where 60% discount was given on the mail order price. He has also referred to the judgment of the Hon’ble Supreme Court in the case of Tara Chand reported in AIR 1971 S.C. 1558. Shri Rawal, the learned advocate, had pleaded that the goods imported by the appellant are covered by ITC policy and the valuation declared by the appellant is correct and the appeal needs to be allowed. Alternatively, he has pleaded that the fine and the penalty are excessive.
6. Shri V.M. Doiphode, the learned senior departmental representative, has argued that the importation was unauthorised and has argued that when in a particular system the components are more than one, it is to be treated as a sub-assembly. The total value of the goods comes to Rs. 3,19,710/- and the goods which are not covered are valued at Rs.1,73,829/-. The appellant had imported 100 T.V. sets. He has referred to the invoice of Sony Corporation in favour of Welcome Group, Maurya Sheraton, New Delhi, which appears at page 57 of the paper book and has also referred to annexure ‘B’ which appears at page 58. He has also referred to Para 31 of Nomininee Manufacturers ITC Policy and Para 25 of the ITC Policy which relates to the nominee manufacturer. On the point of valuation, he has argued that the origin of the goods is Singapore, though the goods are of Japanese make. He further states that 40% discount on mail catalogue is normally given. He has referred to para 23. He has also stated that there was misdeclaration of value on the part of the appellant. In support of his argument, he has referred to a South Regional Bench decision in the case of Hindustan Teleprinters reported in 1986(24) ELT 111. Shri Doiphode states that for the quantum of tine and penalty he leaves it to the Bench. He has pleaded for the rejection of the appeal. Alternatively, on the quantum of fine and penalty he leaves it to the Bench.
7. In reply Shri G.L. Rawal, the learned advocate, has again pleaded for the acceptance of the appeal.
8. We have heard both the sides and have gone through the facts and circumstances of the case. The main plea of the appellants is that the goods imported by them are not sub-assemblies but are components. The Revenue’s main plea is that the goods imported are kits/sub-assemblies which fall under Sl. No. 610 of Appendix 3-A of Import Policy 1985-88. Sl. No. 610 reads as below :-
“610. Kits/ready to assemble sets, assemblies, sub-assemblies, modules and cobination thereof of all electronic items (excluding items mentioned in App.6 List 8 – Part I appearing at Serial No. 609 but excluding electronic discrete components (unless individually mentioned elsewhere in this Appendix).
The appellants main plea is that the importation is not unauthorised, the appellants have placed reliance on Import Trade Control Policy Volume II (For Registered Exporters) April, 1977 – March, 1978. Paras 23, 25(b) 31(1) and 31(2) are reproduced below :-
“23. All registered exporters can transfer their REP entitlements! or REP licences in favour of a manufacturer/manufacturers by nominating such manufacturer(s) in accordance with the provisions for nominations laid down in this part. Requests for such transfer by nomination can be made either in the import application or after the issue of the licence. However, in the case of merchant-exporters, the request for transfer should be made at the time of applying for the licence except in cases covered by sub-para 24(2) in which such request can be made after the issue of the licence.”
“25. Nomination may be made in favour of:-
(a) xx xx xx xx (b) a manufacturer of any other product."
“31(1). If the nominee is a manufacturer of the product exported (i.e. a manufacturer of a product falling in the same serial number or sub-serial number, as the case may be, in which the exported product falls), the REP licence obtained by him will be valid for import of any raw materials, components, consumable stores and packing materials required for use in the licence-holder’s factory in the same manner and subject to the same restrictions as laid down in the case of a manufacturer – exporter in para 30 above.
(2) If the nominee is a manufacturer of any other product not covered by sub-para (1) above, the REP licence obtained by him will be valid for the import of raw materials, components, consumables stores and packing materials covered by his actual user licence/Release Order issued sicne 1st April, 1976. This will be subject to the following conditions/restrictions: –
(a)xx (b)xx (c)xx (d)xx”
The definition of “Actual User (Industrial)”, “Component” and “Part” as per paras (3), (10) and (15) of Import & Export Policy for April, 1985 – March, 1988 (Chapter I Introduction & Definitions) are reproduced below.-
“(3) “Actual User (Industrial)” shall mean an industrial undertaking be it in the large scale, small scale or cottage industries sector, engaged in the manufacture of any goods for which it holds a licence or Registration Certificate from the appropriate Government authority, wherever applicable”
“(10) “Component” means one of the parts of sub-assemblies or assemblies of which a manufactured product is made up and into which it may be resolved and includes an accessory (or attachment).”
“(15) “Part” means an element of a sub-assembly or assembly, not normally useful by itself and not amenable to further disassembly for maintenance purposes. (It could be a component, spare or accessory – depending upon the nature of it use/requirement).”
The appellants had claimed clearance of the goods under OGL Appendix 6, List 8, Part I, Sl.No. 516 in respect of the goods under import against Bill of Entry Nos. 1%, 197 and 198. The appellants had sought clearance of the following goods:-
——————————————————————————–
For 100 pcs.
—————
(i) Cabinet sub-assembly @ US 29.50 Rs. 38,892.55
(ii) Picture Tube with yoke 65.00 Rs. 85,695.45
(iii) PCB's (Populated) Set of
5 PCS. 32.00 Rs. 42,188.53
(iv) Transistor heat sink assembly (set of 4 2.85 Rs. 3,757.42
pcs.)
(v) Speaker tweeter assembly 1.00 Rs. 5,273.57
(vi) Antena socket assy 1.50 Rs. 1,977.59
(vii) Switch harness assy 1.25 Rs. 1,947.39
The under-mentioned items are also not covered by OGL.
(viii) Electrolytic capacitors 0.75 Rs. 988.79
(ix) Metal fittings (screws, nuts) 0.50 Rs. 659.20
(x) Gift Boxes 2.00 Rs. 2,636.80
--------------------------------------------------------------------------------
CIFRs.1,73,829.32 Assessable Rs.1,83,717.29
--------------------------------------------------------------------------------
against REP import licence No. P/L/3027843 dated 10th September, 1985 valid for import of item in terms of para 30(1) of 1977-78, Vol. II. The learned adjudicating authority has held that plastic cabinet is sub-assembly. Plastic extruded finds its place under Sl. No. 516 of List 8 Part I, Appendix 6. Screws are moulded in the cabinet and the same are part of the cabinet for fixing the picture tube. The presence of the screws in the cabinet cannot make it sub-assembly. We are of the view that merely because screws are moulded in the cabinet, the same cannot be treated as sub-assembly.
Picture tube with Yoke:- There is a metal ring around the picture tube and the size of the picture tube is 30.7 mm whereas the same should not be 30.3 mm. Thus the size of the picture tube is larger by 0.4 mm. Colour picture tube is Cathode-ray tube. McGraw-Hill Encyclopedia of Science & Technology Vol. II Page 666 (1982 Edition) describes that “the basic elements of a cathodray tube are the envelope, electron gun, and phosphor screen”. Colour picture tube screen is described in the New Encyclopaedia Britannica Vol.18 (1982 Edition) (Page 118) as under:-
“The colour picture tube (Figure 16) contains three electron guns, which produce three separate electron beams. These are deflected simultaneously in the standard scanning pattern over the viewing screen. One of the beams is controlled by the red primary-colour signal and produces a red image. The second beam produces a blue image and the third a green image.
To permit three primary-colour images to be formed simultaneously, the screen is composed of three sets of individual phosphor dots, which glow respectively in the three different colours and which are unformally interspersed over the screen (Figure 16). The “red” beam impinges only on the red-glowing phosphor dots, being prevented from hitting the other two colours, with similar restrictions of the other two beams to the blue and green dots, respectively.
The sorting out of the three beams so that they produce images of only the intended primary colour is performed by a mask that lies directly behind the phosphor screen. This mask contains about 200,000 precisely located holes, each accurately aligned with three different coloured phosphor dots on the screen in front of it. Electrons from the three guns pass together through each hole, but at slightly different angles. The angles are such that the electrons arising from the gun controlled by the red primary-colour signal fall only on the red dots, being prevented from hitting the blue and green dots by the shadowing action of the mask. Similarly, the “blue” and “green” electrons fall only on the blue and green dots, respectively. A major improvement consists in surrounding each colour dot with an opaque black material so that no light can emerge from the portions of the screen between dots. This permits the screen to produce a brighter image while maintaining the purity of the colours. This type of screen (black matrix screen) is more expensive to produce, but in the early 1970s it was widely used in the larger colour tubes.
Thus three separate primary-colour images are formed simultaneously, as the scanning proceeds. The colour dots of which each image is formed are so small and so uniformly dispersed that the eye does not detect their separate presence, although they are readily visible through a magnifying glass. The primary colours in the three images thereby mix in the mind of the viewer and a full-colour rendition of the image results.”
9. A simple look at the figure of the colour picture tube will show that deflection yoke is part of the picture tube and without deflection yoke the picture tube is not a picture tube at all. Envelope, electron gun and phosphor screen are the basic elements of a cathode ray tube. McGraw-Hill Encyclopedia of Science & Technology Vol. II Page 666 (1982 Edition) describes Envelope as under-
“Envelope. This element serves as the vacuum enclosure, the substrate for the phosphor screen, and the support for the electron gun. The envelope of a cathode-ray tube is typically funnel-shaped; its small opening is stopped by the stem. This stem is essentially a disk of glass through which the metallic leads which support and carry applied voltages to the several elements of the gun are sealed. These leads are generally arrayed on one or more circles concentric with the tube axis. Usually the exhaust tubulation, through which the envelope is evacuated during processing, joins the envelope at the center of the stem. In most cases the stem leads are carried through and soldered to tubular pins in a plastic base cemented to the neck of the envelope in the immediate vicinity of the stem. This base serves to protect the stem and the tipped-off exhaust tubulation, as well as to provide means of contact between the tube socket and the elements of the tube itself.
The large end of the funnel is closed by a glass faceplate on the inside of which the phosphor screen is deposited. In most cases the faceplate is spherically shaped to resist the forces of atmospheric pressure. Often, however, an optical or near-optical flatness is desired for certain tube applications. In these cases the faceplate must be substantially thicker.
The envelopes of most types of cathode-ray tubes are glass, although occasionally ceramic or metal envelopes are used.
Some typical cathode-ray tubes are shown in Fig. 1. Cathode-ray tubes are made in a wide variety of sizes. Tubes having faceplate diameters from 1 to 22 in. (2.5 – 55 cm) are produced. Picture tubes having faceplates of rectangular outline are considered standard in the television industry. These faceplates range in diagonal dimension from 8 to 27 in. (20 – 67 cm). Rectangular-faceplate tubes are also fabricated in smaller sizes for use in instrumentation where space availability is restricted.”
A reading of the description of ‘envelope’ will show that the metal ring of the picture tube is an essential element of the picture tube and as such the picture tube with yoke and metal ring has to be treated as picture tube and cannot be treated as sub-as sembly. We are of the view that PCBs also cannot be treated a sub-assemblies. PCBs are components in view of the defination of ‘components’ and ‘parts’ in terms of para (10) and (15) of AM 1985-88 Policy. The learned Collector in his order has himself observed in para 17 “that the goods imported are not all SKD packs but there are certain discrete components also. Further these are not complete parts or sub-assemblies forming colour TVs. As explained by the importers with the help of circuit diagram which they are following in the manufacturing operation, as many as 15 parts are to be locally procured for assembly into a complete equipment. It has been given to understand that these parts if imported from abroad, are costlier than local ones. In any case the findings indicate that the goods imported are not hit by S.No.122 of Appendix 2-B of the Import Policy according to which consumer goods item in SKD condition are not to be allowed”. The appellants had sought clearance of the goods against REP import licence No. P/L/3027843 dated 10th September, 1985 valid for import in terms of para 30(1) of 1977-78 Vol. II as the imported goods are required for use in appellants’ factory. The Respondent has come to the conclusion that imported goods are sub-assemblies only on the assumption that two parts or components after connection becomes sub-assembly. It is not disputed that the appellants are actual users of the goods and the imported items are components and are against actual user licence and para 31(2) of the Policy 1977-78 clearly lays down if the nominee is a manufacturer of any other product not covered by sub-para (1) of para 31 -. REP licence obtained by them will be valid for the import of raw materials, components, consumable stores and packing materials covered by their actual user licence. In the case of transfer by nomination in favour of an actual user industry who is engaged in the industrial activity other than that of the licence holder then such a transfer nominee can import the said components which are used for the manufacture. Earlier import of similar goods was allowed by the revenue authorities. In view of the above discussion we hold that there was no unauthorised importation by the appellants, and all other goods imported are either components or parts and not sub-assemblies.
10. Coming on the valuation aspect the CIF invoice price of the goods is US $ 165.60 per kit (Sony brand), the CIF price of complete colour TV is US $ 285 per unit (vide invoice of Sony Enterprises, Japan dated 24th April, 1986) for model KV 2090 which is similar to model 2092 or the mail order catalogue price of US $ 434 per set of Sony model No. 2092 (E). The Tribunal in the case of Takara Electronics v. Collector of Customs, New Delhi had held that 60% discount should be given on the mail order price. We confirm the findings of the lower authority that the value declared by the appellants was not correct but order that the value which should be adopted in this case should be as per the earlier order of the Tribunal in the case of Takara Electronics v. Collector of Customs, New Delhi (vide Order No. 607/85-A dated 6th August, 1985). In para 23 of the Order-in-original the learned adjudicating authority has mentioned that mail order catalogue price is US $ 434 per set of Sony model No. 2092 (E). This model is similar to the appellants’ model. Accordingly we order that the lower authorities should adopt the value in line with the Takara Electronics case viz., 60% discount has to be allowed on catalogue price of US $ 434.
11. In view of the above discussion we set aside the impugned order and direct the learned adjudicating authority to re-assess the goods in line with the assessment made in Takara Electronics case. Since we have held that there was no unauthorised importation, we set aside the fine in lieu of confiscation at Rs.1 lakh. Further, we are partly upholding the under valuation. We reduce the penalty under Section 112(a) from Rs. 25,000/- to Rs. 10,000/- (Rupees ten thousand only).