2023 (7) TMI 727 - AT - Customs

Imported membrane systems qualify for exemption under Notification No. 14/2004-Cus. Department's appeal rejected.

Commissioner of Customs (Air), New Custom House, Chennai Versus M/s. RBR Knit Process Pvt. Ltd.

The Tribunal held that the imported goods qualified as membrane systems under Notification No. 14/2004-Cus, making the appellant eligible for exemption. ... Eligibility for concession under Project Import Scheme - Koch Membrane Systems - benefit of N/N. 14/2004-Cus. denied - Department has contended that the imported goods are merely Membranes and not Membrane System - HELD THAT:- From the technical literature of the product, it can be seen that the goods are membrane systems. The very same issue was considered by the Tribunal in the case of CC. (IMPORT), MUMBAI VERSUS ROCHEM SEPARATION SYSTEMS INDIA LTD. [2009 (11) TMI 272 - CESTAT, MUMBAI]. The Tribunal after considering the issue held that the Reverse Osmosis Membrane Filtration System will fall within the meaning of “plant” used in the definition of water supply project, in the notification 14/2004. Apart from this, in the present case, the respondent has furnished the installation certificate which mentions the goods as “effluent treatment unit with reverse osmosis to deliver water for re-use”. From the documents, it is convincing that the goods imported are membrane systems and are eligible for the exemption under Notification No.14/2004-Cus. The decision relied by the Ld. AR in the case of Pure & Cure Technology Vs. Commissioner of Customs, Mumbai [2018 (12) TMI 617 - CESTAT MUMBAI] appearing for the Department is not applicable to the facts of this case, as the said decision relates to Notification No. 6/2006-CE dated 01.03.2006 which is for water purification equipment specified in the said notification. There are no merits in the appeal filed by the Department, the same is dismissed. Issues:The judgment involves the interpretation of Notification No. 14/2004-Cus dated 08.01.2004 regarding the eligibility of the appellant to avail exemption on imported goods, specifically Koch Membrane Systems, under the Project Import Scheme. The key issue is whether the imported goods qualify as Membrane Systems or merely Membranes for the purpose of exemption under the said notification.Summary:1. The appellant registered under the Project Import Scheme and deposited 2% of the project value for clearance of goods without duty. Customs Receipt audit raised concerns that the Reverse Osmosis Plant, being a composite machinery, is not eligible for concessional duty under Project Imports. A demand notice was issued, leading to an appeal before the Commissioner (Appeals) who set aside the original authority's order, prompting the Department to approach the Tribunal.2. The appellant argued that the imported goods are Membranes, not a Reverse Osmosis Membrane Filtration System, emphasizing that only parts/components of Water Supply Projects are eligible for the benefit of the Notification No.14/2004-Cus. Reference was made to a previous Tribunal case to support the appellant's position.3. The respondent's counsel contended that the imported goods are Membrane Systems based on the technical literature and brochure provided. The counsel highlighted a previous Tribunal case where a similar system was considered a 'plant' under the definition of a water supply project.4. The Tribunal considered the technical literature of the product and concluded that the imported goods are indeed membrane systems, eligible for exemption under Notification No.14/2004-Cus. A previous decision cited by the Department was deemed inapplicable to the current case, as it pertained to a different notification for water purification equipment.5. The Tribunal found no merit in the Department's appeal and dismissed it, affirming the eligibility of the respondent to avail the exemption under the mentioned notification.(Order pronounced in open court on 17.07.2023)