2013 (10) TMI 1258 - AT - Customs

Imported catalysts eligible for benefits under Notification 97/2004-Cus as spares; extended limitation period inapplicable.

RELIANCE INDUSTRIES LTD. Versus COMMR. OF CUS. (EXPORTS), NHAVA SHEVA

RELIANCE INDUSTRIES LTD. Versus COMMR. OF CUS. (EXPORTS), NHAVA SHEVA - 2013 (293) E.L.T. 679 (Tri. - Mumbai) Issues Involved:1. Denial of benefit under Notification 97/2004-Cus. for imported catalysts.2. Nature of catalysts as consumables or spares.3. Applicability of extended period of limitation due to alleged suppression of facts.Issue-wise Detailed Analysis:1. Denial of Benefit under Notification 97/2004-Cus.:The appellant challenged the order confirming customs duty, penalty, and redemption fine, arguing that the imported catalysts were eligible for benefits under Notification 97/2004-Cus. They claimed the catalysts were covered under the EPCG scheme, which allowed import of capital goods, including catalysts, for existing plants. The Revenue denied this benefit, stating that catalysts were consumables, which were omitted from the Notification by an amendment in 2007. The appellant argued that the catalysts were spares, not consumables, and thus still eligible for the benefit.2. Nature of Catalysts as Consumables or Spares:The appellant contended that catalysts should be considered spares as per the Foreign Trade Policy (FTP) and EPCG scheme, which allowed import of catalysts for existing plants. They argued that the deletion of the word 'consumables' from the Notification did not affect the import of catalysts as spares. The Revenue argued that catalysts were consumables as they were substantially or totally consumed in the manufacturing process and thus not eligible for the benefit under the amended Notification. The Tribunal found that the FTP and EPCG scheme treated catalysts as distinct from consumables and allowed their import as spares, supporting the appellant's contention.3. Applicability of Extended Period of Limitation:The appellant argued that the extended period of limitation could not be invoked as there was no suppression of facts. They had declared the catalysts in the bills of entry and claimed the benefit under the EPCG licence, which was cleared without any objection from customs authorities. The Revenue argued that the appellant misdeclared the catalysts to avail duty exemption and thus the extended period of limitation was applicable. The Tribunal found that the appellant had acted in accordance with the EPCG licence and FTP, and the customs authorities were aware of the nature of the goods. Therefore, the allegation of suppression was not sustainable, and the demand was time-barred.Conclusion:The Tribunal held that the appellant was entitled to the benefit of Notification 97/2004-Cus. as amended, for the imported catalysts, which were considered spares under the FTP and EPCG scheme. The deletion of the word 'consumables' from the Notification did not affect the import of catalysts as spares. The Tribunal also found that the extended period of limitation was not invocable as there was no suppression of facts by the appellant. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief.