C.N.B. Nair, Member (T) - (1.)The appellant M/s. Ellora Time Limited is a manufacturer, inter alia of telephone. The appellant had also excise licence as a manufacturer of telephone.
(2.)In August 1995, the appellant imported at Kandla Port two consignments and sought their customs clearance as part of telephone. The invoice dated July 28, 1995 which covered the import, described the goods as "Materials for corded telephone for model No. TH -956". The import comprised 15,000 pieces each of different parts of telephone instruments. The parts were themselves grouped under 11 headings like plastic moulded, adhesive cushion, pressure pad, receiver/transmitter, switches capacitor/dies, diod etc. The consignments were packed in 386 cartons. The only parts which were not included in the consignments are "Main PCB and Dial side PCB" (remarks in the invoice). While the appellant claimed classification of the items under Tariff heading for parts, the Customs took the view that the correct classification is as telephone instrument itself under heading No. 8517.10 of the Customs Tariff and 8517.00 of the Central Excise Tariff. In adjudication, Commissioner of Customs upheld the view that the consignments should be treated as "telephone instrument". The Commissioner relied on Rule 2(a) of General Rules for the interpretation of Customs Tariff Schedule concluding that import was of incomplete or unfinished telephone instrument. The present appeal challenges that finding.
(3.)The contention of the appellant is that it had manufactured printed circuit board (PCB) in India and manufactured telephone instruments in India by assembling the imported components and the domestically manufactured printed circuit boards. It is being submitted that it is clear from the invoice, packing and other relevant aspects of the transaction that the goods were being bought and sold as parts only and not as telephone instruments, incomplete or unfinished telephone instrument. Learned Counsel has also pointed out that each part was being valued separately and billed accordingly in the invoice. Much case law has also been cited by both sides.