2023 (5) TMI 146 - AT - Customs

Tribunal grants importer exemption, rejects department's interpretation of Customs Act.

The Tribunal ruled in favor of the appellant, holding that the person holding themselves as the importer could avail of the exemption under Notification ... Interpretation of statute - Section 2(26) of Customs Act - Scope of the term Importer - High Sea Sale - Adjudicating authority treated the appellant neither the importer not the owner - Exemption on items of Machinery apparatus required for setting up of a Solar Power Generation Project, when imported into India - applicability of N/N. 01/20-Cus dated 06.01.2011 - High Sea Agreement were genuine agreements or not - HELD THAT:- In the course of the findings of the Commissioner there has been no discussion as to whether the person who holds himself as importer and whom the Ministry Of Renewable Energy also accepted as an importer can at the time of import, be prevented from availing benefit of Exemption Notification No. 01/2011-Cus., dated 06.01.2011 - It is to be noted that conditions (1)& (2) of the exemption notification refers to 'importer’ and condition (2) refers to post import condition of 'used for the purpose’ and not of self-use or use in own project etc. Department is not making any case of breach of post import condition in the present instance. It is a fact that there is no claim to the contrary in this matter by M/s. MEIL or PESL, that they were the owners of the goods and hence importer. Department has of its own after clearance of the goods gone on to say that High Sea Sales Agreement being in genuine, the persons whoheld out himself as an importer is not so. The department it appears is proceeding on incorrect basis that only owner alone can be importer for Sec2(26) and not the person holding itself as an importer. Once this notion is discarded and person holding itself as an importer taken as included in purview of Section 2(26), all high sea sales agreement or their authenticity is relegated to irrelevance. Further, there being no dispute to the title of the goods or claim to the contrary, rather shows that there was consensus or not disagreement between the parties, which clearly points out that everything actually happened with some understanding or agreement, oral or otherwise. It is clear from the observation that between the person causing the import or the owner, the choice of filing Bill of Entry has to be exercised by coming forward and filing Bill of Entry and once that exercise is done, then no one can subsequently resile from the consequences, which flow from such choice/election - It is therefore found that that terming of import as improper, even when there is no contest to the ownership, and the person claiming to be importer continues to hold himself as an importer and the Ministry issuing certificate continues to treat the appellant as the importer, is not maintainable. Reliance also placed in the decision of the Hon’ble Bombay High Court in HAMID FAHIM ANSARI VERSUS COMMR. OF CUS. (IMPORT), NHAVA SHEVA [2009 (5) TMI 84 - BOMBAY HIGH COURT] where it was held that In so far as respondents/Customs Authorities is (sic) concerned, they have not pointed out to us any provision under the Customs Act or any Rule or Regulation framed thereunder by which the person having valid IEC Number and having paid the custom duty is prevented from importing goods. At the highest, if the petitioner has obtained IEC number by misrepresenting the Ministry of Commerce and Industry and Director General of Foreign Trade, it is for that body to take action”. It is thus abundantly clear that department cannot self assign to itself the duty of declaring bad in law the certificate issued to the importer by Ministry of Renewable Energy or decide title of the goods, even when no one is disputing ownership. And existence or otherwise of High Sea Sales Agreement makes no difference under Section 2 (26) of the Customs Act, 1962 regarding documented and claimed “Importer”. In the face of irrelevance of high sea sales agreements in view of requirements of Section 2(26), Frustra probatur quod probatum non relevant (that what is proved in vain when proved is not relevant) applies in the instant case. The finding to the contrary, by the learned Commissioner is accordingly set aside with consequential relief in penalty - appeal allowed. Issues Involved:1. Interpretation of Section 2(26) of the Customs Act, 1962.2. Validity of High Sea Sales Agreement.3. Eligibility for exemption under Notification No. 01/20-Cus dated 06.01.2011.Issue 1: Interpretation of Section 2(26) of the Customs Act, 1962The primary issue revolves around the interpretation of the term 'importer' under Section 2(26) of the Customs Act, 1962. The department argued that M/s. MEIL, being the real owner of the goods, should be considered the importer, not M/s. APCA. The appellant contended that they held themselves as the importer by filing the Bill of Entry and producing the necessary certificate from the Ministry of New and Renewable Energy, which was neither withdrawn nor cancelled. The Tribunal found that the department's interpretation was incorrect and that the person holding themselves as the importer could avail of the exemption.Issue 2: Validity of High Sea Sales AgreementThe department challenged the genuineness of the High Sea Sales Agreement, suggesting it was executed merely to claim the exemption. The Tribunal noted that there was no discussion by the Commissioner on whether the person holding themselves as the importer could be prevented from availing the exemption. It was concluded that the existence or otherwise of High Sea Sales Agreements was irrelevant under Section 2(26) as long as the person held themselves as the importer.Issue 3: Eligibility for Exemption under Notification No. 01/20-Cus dated 06.01.2011The appellant claimed exemption for machinery required for setting up a Solar Power Generation Project under Notification No. 01/20-Cus dated 06.01.2011. The Tribunal observed that the exemption notification's conditions referred to the 'importer' and did not specify self-use or use in one's project. Since there was no breach of post-import conditions and no dispute over the title of the goods, the appellant was deemed eligible for the exemption.Conclusion:The Tribunal set aside the findings of the learned Commissioner, granting consequential relief in penalty to the appellant. It was emphasized that the department could not self-assign the duty of declaring the certificate issued by the Ministry of Renewable Energy as invalid or decide the title of the goods when no one disputed ownership. The Tribunal's decision was pronounced in open court on 02.05.2023.