2019 (2) TMI 691 - AT - Customs

Tribunal denies exemption for imported machine failing to meet criteria under Customs Notification

The Tribunal ruled in favor of the Revenue in an appeal concerning the eligibility of exemption under Notification No.21/2002-Cus. The machine imported by ... Import of machinery - Electronic Sensor Paver Vogele – Model Super 1800-2 with AB 600-2 TV screen for laying bituminous pavement upto 9 meter width - benefit of N/N. 21/2002-Cus. dated 1.3.2002 (serial No.230) denied on the ground that the imported machine having minimum pavement width of 3 meters, whereas the minimum width of pavement required 7 meters to qualify for the benefit of Notification - Held that:- There is no dispute of the fact that the goods imported by the respondent has been described in the Bill of Entry as “Electronic Sensor Paver Vogele – Model Super 1800-2 with AB 600-2 TV screen for laying bituminous pavement upto 9 meter width”, whereas on examination, the same was found to be that the machine is capable of laying bituminous pavement of 3 meters only. It is also not in dispute that only with addition of bolt-in extensions, i.e. with accessories, the machine could be capable of laying bituminous pavement of 7 meters and above. Reliance placed in the case of COMMISSIONER OF CUSTOMS (IMPORT), MUMBAI VERSUS RAMKY INFRASTRUCTURE LTD AND OTHERS [2014 (6) TMI 615 - CESTAT MUMBAI (LB)], where it was held that the mere import of the accessories with the machine cannot change the basic character of the machine. - the machines in question are capable of laying bituminous pavement from 3 meters to 6 meters i.e. less than 7 meters. - Importer is not eligible for benefit of exemption. The learned Commissioner (Appeals) has erred in extending the benefit of Notification No.21/2002-Cus. dated 1.3.2002 (serial No.230) - decided in favor revenue. Issues:1. Interpretation of Notification No.21/2002-Cus. dated 1.3.2002 regarding the eligibility criteria for exemption.2. Scope of appeal beyond the notice issued to the respondent.Analysis:Issue 1: Interpretation of Notification No.21/2002-Cus. dated 1.3.2002The case involved an appeal by the Revenue against the order-in-appeal passed by the Commissioner of Customs (Appeals) regarding the eligibility of exemption under Notification No.21/2002-Cus. dated 1.3.2002. The respondent had imported a machine for laying bituminous pavement, claiming exemption under the said notification. However, it was found that the machine was capable of laying pavement only up to 3 meters, falling short of the required 7 meters to qualify for the exemption. The Revenue contended that the benefit of the notification was not applicable as the machine did not meet the specified criteria. The Tribunal referred to a previous case and emphasized that the exemption notification should be strictly interpreted. It was noted that the machine, without additional bolt-in extensions, did not qualify for the exemption, as the accessories did not change the fundamental nature of the machine. Citing legal principles, including the need for clear establishment of eligibility for exemption, the Tribunal ruled in favor of the Revenue, setting aside the order-in-appeal and allowing the Revenue's appeal.Issue 2: Scope of appeal beyond the noticeThe respondent argued that the appeal by the Revenue was beyond the scope of the notice issued to them. However, the Tribunal did not accept this argument and proceeded to hear both sides. The Tribunal examined the facts of the case, focusing on the discrepancy between the machine's actual capabilities and the requirements for exemption under the notification. Despite the respondent's contention, the Tribunal found that the machine, as imported, did not meet the necessary criteria for exemption. By considering legal precedents and the strict interpretation of exemption notifications, the Tribunal concluded that the order-in-appeal granting the benefit of the notification to the respondent was erroneous. Consequently, the impugned order was set aside, and the Revenue's appeal was allowed.This detailed analysis of the judgment highlights the key legal issues, arguments presented by both parties, relevant legal precedents, and the Tribunal's decision based on the interpretation of the exemption notification and legal principles.