2018 (10) TMI 275 - AT - Customs

Tribunal dismisses Revenue's appeal on limitation grounds, highlights importance of timely notices & exemption interpretations.

C.C., Kandla Versus M/s Reliance Port & Terminals Ltd.

The Tribunal dismissed the Revenue's appeal based on the issue of limitation, emphasizing the importance of timely issuance of Show Cause Notices and the ... Extended period of Limitation - EPCG Scheme - benefit of Concessional rate of duty - benefit denied on the ground that the assessee have imported the goods i.e. consumables and since word ‘consumables’ was deleted from the scope of N/N. 97/2004-Cus dated 17.09.2004 by way of amendment through N/N. 72/2007-Cus dated 21.05.2007 - confiscation - recovery of differential duty with penalty, interest etc. Held that:- The respondent have obtained the EPCG license wherein the description of goods was clearly declared as consumables. The bills of entry also bear the same description. The objection by the department is not on the basis of the material fact but on the interpreting of Notification No. 97/2004-Cus. It was clear to all that the word consumables was deleted in the exemption entry under EPCG Scheme, therefore, there is no mis-declaration or suppression of fact on the part of the respondent. This case is solely on the interpretation of the word interpreting of exemption entry of capital goods in the Notification 97/2004-Cus dated 18.09.2004. Moreover the Revenue in its appeal has not made any ground on the issue of limitation which appears that the Revenue has given up the issue of limitation, therefore, the demand is clearly hit by limitation. Appeal dismissed - decided against Revenue. Issues:1. Interpretation of Notification No. 97/2004-Cus regarding EPCG Scheme eligibility for imported goods.2. Confiscation of goods, recovery of differential duty, and imposition of penalties.3. Time limitation for issuing Show Cause Notice (SCN) and invoking extended period.Analysis:Issue 1: Interpretation of Notification No. 97/2004-CusThe case involved the import of Grout Bags, Class G Cement, and Polyisocyanurate Insulate Foam under the EPCG Scheme. The dispute arose when the DRI contended that the goods were consumables and not eligible for the concessional rate of duty under the scheme due to an amendment deleting the word 'consumables' from the notification. The Additional Commissioner Customs ordered confiscation of goods, recovery of differential duty, and penalties. The Commissioner (Appeals) later allowed the appeals, interpreting the notification and setting aside the demand on the ground of time bar.Issue 2: Confiscation, Duty Recovery, and PenaltiesThe appellant argued that the imported goods were consumables and not capital goods as per the amended notification, thus not eligible for the exemption. The appellant contended that the goods were essential for the initial installation of pipelines and should be considered as capital goods. The respondent emphasized that the goods supported, sterilized, and insulated pipelines during installation, making them plant accessories or equipment falling under capital goods. The Tribunal noted that the demand was time-barred as the goods were imported in 2007-2008, and the SCN was issued in 2011, beyond the normal period. The Tribunal upheld the order on the ground of limitation, as there was no misdeclaration or suppression of facts by the respondent.Issue 3: Time Limitation for SCN and Extended PeriodThe Tribunal found that the demand was hit by limitation, as the appellant had declared the goods as consumables in the EPCG license and bills of entry, without any objection from the department during the normal period. The case revolved around the interpretation of the exemption entry of capital goods in the notification, with the Revenue not raising any grounds on the issue of limitation in their appeal. Consequently, the Tribunal dismissed the Revenue's appeal solely on the ground of limitation without delving into the merits of the case.In conclusion, the Tribunal dismissed the Revenue's appeal based on the issue of limitation, emphasizing the importance of timely issuance of SCN and the interpretation of exemption entries in notifications regarding the eligibility of goods under schemes like EPCG.