2014 (6) TMI 615 - AT - Customs

Imported 'Electronic Sensor Pavers' not entitled to customs duty exemption under Notification No. 21/2002-Cus.

The case involved the entitlement of imported 'Electronic Sensor Pavers' to the benefit of Notification No. 21/2002-Cus. The Tribunal determined that the ... Denial of benefit of Notification no. 21/2002-Cus. dated 1.3.2002 - import of machines - Electronic Sensor Pavers Vogele – Model Super 1800-2 with AB 600-2 TV Screed of working width upto 9.5 meters for laying Bituminous Pavement - Held that:- The only contention of the present respondents is that with the addition of bolt-on extensions, the machine in question is capable of laying bituminous pavement of 7 meters size and above. From the purchase order and from the packing list, we find that the accessories i.e. bolt-on extensions were separately ordered. In a situation when bolt-on extensions are not imported, the relevant question would then be whether the machines still qualify for exemption under Notification 21/2002. As per the product literature, the machines in question are capable of having bituminous pavement from 3 meters to 6 meters i.e less than 7 meters, therefore, we find no reason to take a different view as in the case of Gammon India Ltd. (2013 (4) TMI 598 - CESTAT MUMBAI). - Decided against Revenue. Issues Involved:1. Entitlement of imported 'Electronic Sensor Pavers' to the benefit of Notification No. 21/2002-Cus.2. Interpretation of the term 'Electronic paver finisher (with sensor device) for laying bituminous pavement 7m size and above' in the context of the notification.3. Consideration of machine specifications and their compliance with the notification requirements.4. The impact of accessories (bolt-on extensions) on the eligibility for exemption under the notification.5. Reference to the Larger Bench due to differing views within the Tribunal.Issue-wise Detailed Analysis:1. Entitlement of Imported 'Electronic Sensor Pavers' to the Benefit of Notification No. 21/2002-Cus:The respondents imported 'Electronic Sensor Pavers' and claimed the benefit under Notification No. 21/2002 (Sr. No. 230, item 2 of List 18). The adjudicating authority denied this benefit on the basis that the machine's width was up to 6 meters, whereas the notification required a capability to lay pavements of 7 meters and above. The Commissioner (Appeals) reversed this decision, stating that the machines could lay pavements up to 10 meters, thus qualifying for the exemption. The Revenue appealed this decision.2. Interpretation of the Term 'Electronic Paver Finisher (with Sensor Device) for Laying Bituminous Pavement 7m Size and Above':The core issue was the interpretation of the notification's language. The Tribunal had previously ruled in a similar case (M/s Gammon India Ltd.) that machines with a width of only 6 meters did not qualify for the exemption. The respondents argued that the notification should be interpreted based on the machine's capacity to lay pavements of 7 meters and above, not the machine's physical width.3. Consideration of Machine Specifications and Their Compliance with the Notification Requirements:The respondents provided a manufacturer's catalogue showing that the machines could lay bituminous pavements up to 10 meters. The Tribunal, convinced by this evidence, concluded that the machine's capacity, not its physical width, was the determining factor for the exemption. Thus, the machines imported by the respondents met the criteria for exemption under the notification.4. The Impact of Accessories (Bolt-on Extensions) on the Eligibility for Exemption Under the Notification:The Revenue contended that the machines could only lay pavements of 7 meters and above with the addition of bolt-on extensions, which were considered accessories. The Tribunal had to determine whether the inclusion of these accessories affected the machine's eligibility for the exemption. The Tribunal noted that the accessories were ordered separately and were not essential parts of the machine, thus the machine itself did not inherently meet the 7-meter requirement without them.5. Reference to the Larger Bench Due to Differing Views Within the Tribunal:Given the differing views within the Tribunal, particularly in light of the previous decision in the Gammon India Ltd. case, the matter was referred to the Larger Bench. The specific issue referred was whether the 'Electronic Sensor Pavers Vogele - Model Super 1800-2 with AB 600-2 TV Screed of working width up to 9.5 meters for laying Bituminous Pavement' qualified for exemption under Notification No. 21/2002-Cus.Larger Bench Decision:The Larger Bench was tasked with resolving whether the machines, with the capability to lay pavements of 7 meters and above (including with accessories), qualified for the exemption. The Bench concluded that the machines, as per their product literature, were capable of laying pavements from 3 meters to 6 meters without accessories. Consequently, the benefit of the notification was not applicable to these machines, aligning with the earlier decision in the Gammon India Ltd. case.Final Order:The appeals filed by the Revenue were allowed, and the ruling was pronounced on 3.6.2014.