2023 (7) TMI 667 - AT - Customs

Customs Duty Exemption Upheld in Appeal Decision

The Commissioner of Customs Versus M/s. GE India Industrial Pvt. Ltd.

The Commissioner of Customs Versus M/s. GE India Industrial Pvt. Ltd. - TMI Issues Involved:1. Denial of benefit of Basic Customs Duty (BCD) exemption under Notification No.21/2002-Cus. and Notification No.12/2012-Cus.2. Alleged violation of condition No.45(ii) of the notification by the respondent.Summary:Issue 1: Denial of BCD ExemptionThe appeal was filed by the Department against the order passed by the Commissioner, who dropped the proceedings initiated by the show cause notice alleging that the respondent wrongly availed BCD exemption under Notification No.21/2002-Cus. dated 01.03.2002 read with Notification No.12/2012-Cus. dated 17.3.2012. The respondent imported Wind Operated Electricity Generator (WOEG) parts and availed BCD concession, which required furnishing a certificate from an officer of the Ministry of Non-Conventional Energy Sources and an undertaking to use the goods for the specified purpose.Issue 2: Alleged Violation of Condition No.45(ii)The Department argued that the respondent violated the condition by selling the imported parts instead of using them for the specified purpose. The original authority observed no violation of conditions and dropped the proceedings. The Department contended that the respondent should have used the goods themselves and not sold them to customers.Respondent's DefenseThe respondent argued that they entered into two separate agreements with customers: one for supply of WOEG parts and another for erection and commissioning. They claimed that they fulfilled the conditions of the exemption notification by assembling the parts at the customer's site. The respondent cited a High Court judgment in the case of Nordex Pvt. Ltd. vs CC Tuticorin, which supported their interpretation that transporting parts directly to the customer's site does not violate the conditions of the notification.Tribunal's AnalysisThe Tribunal noted that the adjudicating authority found that the imported parts were utilized for the specified purpose of manufacturing WOEG, fulfilling the condition No.35(ii) and 45(ii). The Tribunal also referred to the High Court's judgment in Nordex India Pvt. Ltd., which addressed the practical necessity of transporting parts directly to the customer's site for assembly. The High Court held that the condition of using the goods for the specified purpose was met even if the parts were transported to the customer's site.ConclusionThe Tribunal concluded that the demand proposed in the show cause notice was based on a misconception of facts and law. The judgment of the High Court in Nordex India Pvt. Ltd. was found to be squarely applicable. Therefore, the appeal filed by the Department was dismissed, and the impugned order was upheld.(Pronounced in court on 17.07.2023)