Per Jyoti Balasundaram:

The issues for determination in the above appeal are as under:

(i) whether the appellants misdeclared the import of complete plant as "check weighing automatic volumetric fillers" and complete labelling equipment system as automatic labelling machine in order to obtain concessional rate of duty, hence rendering the imported goods liable to confiscation and the appellants liable to penalty;

(ii) Whether the imported goods are covered by the OGL provisions during the relevant period or required a licence for import;

(iii) whether the goods were entitled to the benefit of concessional rate of duty in terms of Notification 125/86.

2. The impugned order was passed on 2.9.87 holding that the items imported are not machines as declared but complete plant line, and therefore, not covered by OGL and not entitled to the benefit of Notification 125/86 in terms of Sl.No. 9 and 11 thereof and he also held that the appellants had misdeclared the goods, confirmed the differential duty of Rs. 82,62,000/-, confiscated the goods with option to redeem the same on payment of fine of Rs. 40 lakhs and imposed a penalty of Rs. 10,00,000.

3. Shri D.B. Shroff, learned Counsel for the appellants submits that the issue is covered in their favour by two orders of this Tribunal viz. (i) Collector of Customs, Bombay Vs. Mazda Packaging Ltd. reported in 1994 (69) ELT 283 and (ii) Collector Vs. Purity Flex Packing Ltd. reported in 1994 (69) ELT 293, wherein it was held that the various items of similar imported machines e.g. Multilayer co-extruding machine and multilayer coater/extruder machine are integrally connected with each other to form a complete machine and, therefore, entitled to the benefit of Notification 125/86. Learned Counsel further submits that since OGL entries are identical to the entries in the Notification, they have to be interpreted in the same manner. He contends that the check weighing automatic volumetric filler is a complete automatic machine even though consisting of several parts, since the item to be filled is a pesticide which is highly toxic, and the whole purpose of the system would be lost if the capping and bunging had to be done manually and check weighing has to be done manually, and the entry in the Notification itself suggests that the complete automatic line would be covered thereunder. He relies upon the offer and order confirmation to support his stand that what has been imported is an volumetric checking weighing filler. Therefore, the entire machinery is covered by the OGL entry. He also relies upon Notes 3 and 4 of Section XVI of the Customs Tariff Act to lend support to his argument that the entire line imported is a single machine covered by the OGL entries and the Notification. As regards the automatic labeling machine, he submits that since they only automatically label bottles or cans and have no other function, they are machines covered by the relevant OGL entries as well as Notification. The trade understanding as well as the understanding of the technical sense is that the imported items are automatic volumetric check weighing fillers and labelling machines. He cites the decision of the Privy Council in the case of Corporation of Calcutta Vs. Cossipore and Chitpor Municipality reported in AIR 1922 PC 27 for the definition of machinery and the decision of the Supreme Court in the case of CIT Vs. Mir Mohd. Ali reported in 1964 53 ITR 165 for the definition of 'machinery' and submits that the word machinery cannot be given a narrow meaning and all the various parts of machine acting in combination with one another to give a definite and specific result together constitute a machine. He refers to the definition of the capital goods in the OGL to contend that the word 'machinery' must be given a wider meaning so as to include a combination of machinery or plant or a line. Since the imported items are complete automatic machines, the charge of misdeclaration is unwarranted and baseless and