Capital goods treatment for rolling-mill work rolls supports full SHIS benefit and defeats extended limitation in an interpretational dispute.

Imported work rolls for rolling mills are treated as capital goods, not mere spare parts, because the tariff classification places them separately and the policy definition is wide enough to cover them. On that basis, full utilisation of SHIS scrip benefit under Notification No. 104/2009-Customs was held allowable. A bona fide interpretational dispute, especially where conflicting tribunal views existed on the same question, was held insufficient to establish suppression for invoking the extended limitation period, so the extended-period demand was unsustainable. The order confirming demand was set aside with consequential relief.

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Issues: (i) Whether work rolls imported for rolling mills are capital goods by themselves and eligible for full utilisation of SHIS scrip under Notification No. 104/2009-Customs dated 14.09.2009; (ii) whether the demand for the extended period was barred by limitation.

Issue (i): Whether work rolls imported for rolling mills are capital goods by themselves and eligible for full utilisation of SHIS scrip under Notification No. 104/2009-Customs dated 14.09.2009.

Analysis: The tariff classification specifically places rolls for rolling mills under CTH 8455 30 00, distinct from other parts under CTH 8455 90 00. On the facts, the rolls were integral to the functioning of the rolling mill and were not mere spare parts. The definition of capital goods in the notification was treated as wide enough to cover such goods. The Tribunal also relied on the consistent view that where the same goods are accepted as capital goods under EPCG, a different stand cannot be taken under SHIS when the policy definition is identical.

Conclusion: The issue is answered in favour of the assessee. Work rolls are capital goods and not spare parts, and the benefit of the SHIS scrip was allowable in full.

Issue (ii): Whether the demand for the extended period was barred by limitation.

Analysis: The controversy was one of interpretation and had already been the subject of adverse and favourable tribunal decisions on the same legal question. In that setting, the assessee's claim was held to be bona fide, and suppression was not established for invoking the extended period.

Conclusion: The issue is answered in favour of the assessee. The extended-period demand was unsustainable on limitation grounds.

Final Conclusion: The order confirming demand was set aside and the appeal succeeded with consequential relief as per law.

Ratio Decidendi: Where the tariff classification and policy definition show that imported rolls for rolling mills are capital goods, the customs authorities cannot recharacterize them as mere spare parts to restrict SHIS entitlement, and a bona fide interpretational dispute will not justify invocation of the extended period.

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