Importers & Institutions Must Pay Duty on Imported Equipment Despite Alleged Commercial Use

The Tribunal upheld the Commissioner's order directing the importers, a Cricketing Institution and Charitable Trust, to pay duty on the depreciated value of Mega Vision Colour Matrix Score Board and Flood Lighting equipment imported under an exemption order. The Tribunal found that the equipment's use during matches did not constitute commercial use as alleged by the Revenue. Consequently, the appeal by the Revenue was rejected, and the Commissioner's order was upheld.

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Issues:
Violation of condition (ii) of the exemption order dated 19-12-95 regarding commercial use of imported equipment.

Analysis:
The case involved an appeal by the Revenue against the order passed by the Commissioner of Customs, Mumbai. The respondents, a Cricketing Institution and Charitable Trust, imported Mega Vision Colour Matrix Score Board and Flood Lighting equipment under an ad hoc exemption order. The dispute arose when the Revenue alleged that the equipment was used for commercial purposes during test matches at Wankhede Stadium, post the Wills World Cup tournament. The Revenue issued a show cause notice proposing a demand of duty, interest, and penalty for the alleged violation of condition (ii) of the exemption order.

The respondents contended that they did not violate the conditions as the equipment was used for staging matches, not for commercial purposes. They highlighted that the equipment remained at the original spot, was not loaned or gifted, and the profits from ticket sales were not directly linked to the installation of the equipment. The Ministry later permitted the use of the equipment for commercial purposes with payment of duty on the depreciated value. The Commissioner determined a depreciated value and directed the importers to pay duty accordingly.

The Tribunal analyzed the arguments and evidence presented. It noted that the Revenue's case relied on the profits from ticket sales post the World Cup, but concluded that the equipment's installation for matches did not amount to commercial use. The Tribunal agreed that the equipment was used as intended, and the profits made were not solely due to the equipment. The Tribunal upheld the Commissioner's order on determining duty based on the depreciated value as per the Ministry's directive. Consequently, the appeal by the Revenue was rejected, and the impugned order was upheld.

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