2013 (12) TMI 706 - AT - Customs

Tribunal Upholds Denial of Tax Benefit for Imported Goods

COMMISSIONER OF CUS. (EXPORT), NHAVA SHEVA Versus BANG OVERSEAS LTD.

The Tribunal upheld the Commissioner (Appeals) order denying the benefit of Notifications No. 46/2002 and 40/2006 to the Respondents. It found that the ... Denial of benefit of Notifications No. 46/2002 and 40/2006 - Clearance of 100% Cotton yarn dyed woven fabrics - Held that:- when exports were made shipping bill was filed with Customs Authorities and in the shipping bill a declaration to the effect that it is under DFIA scheme would have been made. In such a situation, customs officers also should have verified the specifications. Having allowed export of motors with input specifications as bearings upto 50 mm bore, it may not be appropriate for the customs authorities to insist on technical specifications at the time of import of bearings. Further, we also find that the specifications provided in the DFIA authorization have to be considered as sufficient for the customs purposes since the specifications are based on goods exported under a shipping bill. Therefore the responsibility to ensure that exporter gives a proper declaration while making exports in the shipping bill lies on both customs as well as DGFT authorities and having missed the bus at the time of export, it may not be correct to insist on specifications from a transferee of DFIA. Further, we also take note of the fact that DGFT is supposed to ensure that all the requirements have been fulfilled before allowing transferability - appellants are eligible for the benefit of Notification No. 40/2006-NT - Following decision of GLOBAL EXIM Versus COMMISSIONER OF CUSTOMS (EXPORT), MUMBAI [2010 (4) TMI 366 - CESTAT, MUMBAI] - Decided against Revenue. Issues:Appeal against Commissioner (Appeals) Order-in-Appeal denying benefit of Notifications No. 46/2002 and 40/2006; Nexus between goods exported and imported; Interpretation of Notification conditions; Comparison with previous Tribunal decision.Analysis:The case involved an appeal by the Revenue against the Commissioner (Appeals) Order-in-Appeal denying the benefit of Notifications No. 46/2002 and 40/2006. The dispute centered around the nexus between the goods exported and imported. The Revenue argued that the imported goods were of higher quality than the exported goods, citing proviso (i) of Notification No. 40/2006-Cus. The Respondents, however, relied on a previous Tribunal decision and the DFIA issued by the DGFT to support their case.The Tribunal examined the submissions and records, noting that the imported fabrics were confirmed to be 100% cotton fabrics as per the DFIA Licence submitted by the importers. The Tribunal emphasized that the goods imported should have a connection with the goods exported, as per the conditions of the Notification. It was observed that the conditions imposed by the department were extraneous to the Notification's provisions.Referring to the Tribunal decision in the case of Global Exim, it was highlighted that the imported materials should match the quality, technical characteristics, and specifications of the materials used in the resultant product. The Tribunal found that the department had not been able to establish a case against the Respondents. The decision in the Global Exim case was deemed applicable to the current case.Ultimately, the Tribunal upheld the Commissioner (Appeals) order, stating that there was no reason to interfere with it. The Revenue's appeal was dismissed as devoid of merit. The judgment was dictated and pronounced in court, bringing the legal proceedings to a conclusion.