1998 (6) TMI 564 - AT - Customs

Tribunal Upholds Denial of Exemption for Imported Goods

ASCOM Versus COMMR. OF CUS., MUMBAI AIRPORT & NHAVA SHEVA

The Tribunal upheld the lower authorities' decision to deny exemption under Notification 11/97 for imported UPS, measuring instruments, and grinding ... - Issues:1. Eligibility for exemption under Notification 11/97 read with Notifications 37/97 and 55/97 against Serial No. 144A of List 8A for Uninterrupted Power Supply (UPS), measuring instruments, and grinding wheels.Analysis:1. The issue in all three appeals was the eligibility for exemption under Notification 11/97. The Assistant Commissioner held that the exemption for UPS was for goods required for setting up a crude petroleum refinery, not for traders importing for stock and trade. The Commissioner (Appeals) upheld this decision, emphasizing the strict interpretation of the conditions for exemption. Similarly, for measuring instruments, the jurisdictional Assistant Commissioner ruled that the exemption could only apply if the instruments were used for setting up a crude petroleum refinery. The Commissioner (Appeals) supported this view, stating that the goods were meant for trade, not for refinery use. Regarding grinding wheels, the Assistant Commissioner held that they were not tools but parts thereof, thus not covered by the exemption. The Commissioner (Appeals) agreed, emphasizing the need to demonstrate that imported goods were required for setting up a refinery, which the appellants failed to do.2. The appellants argued that end use was not a condition for exemption and referred to a similar entry in the original Notification. They contended that the intention of the authorities should be explicit in the Notification's wording. They highlighted that the exemption did not require proof of actual use, relying on legal precedents. The Department argued that the goods' description in the Notification implied the need for use in setting up a refinery. They cited a Supreme Court judgment to resolve any ambiguity in favor of revenue.3. The Tribunal carefully considered the amendments to the Notification and the structure of List 8A. It noted that the conditions for exemption were separately indicated for each serial number, as seen in a similar entry for hotel setup. Unlike other entries, Serial No. 144A did not specify any conditions in the annexure. The Tribunal emphasized that the goods must cross the threshold of being required for setting up a refinery to qualify for the exemption. The appellants' failure to show intended use for refinery setup led to the rejection of their claim. Legal principles were cited to support the strict interpretation of exemption provisions and the burden on the taxpayer to clearly establish eligibility. The Tribunal concluded that the imported goods did not fall within the exemption's description, upholding the lower authorities' decision to deny the exemption.In conclusion, the Tribunal rejected the appeals, ruling that the imported UPS, measuring instruments, and grinding wheels did not meet the criteria for exemption under Notification 11/97. The decision emphasized the need for clear evidence of intended use for setting up a crude petroleum refinery to qualify for the exemption, which the appellants failed to provide. The judgment highlighted the strict interpretation of exemption provisions and the burden on taxpayers to establish eligibility clearly.