2026 (1) TMI 1363 - AT - Customs

Exemption from Basic Customs Duty on Uninterrupted Power Supply under Notification No.25/2005-Cus affirmed; appeals allowed and orders set aside

Interpretation of an exemption notification by plain language determined eligibility of static converters/Uninterrupted Power Supply for exemption from ... Exemption from Basic Customs Duty - Interpretation of exemption notification by plain language - Eligibility of static converters / Uninterrupted Power Supply (UPS) under exemption - Notification No. 25/2005-Cus dated 01.03.2005 - Whether the appellant could have been denied exemption from payment of basic customs duty on the Uninterrupted Power Supply [UPS] imported by the appellant in terms of the Exemption Notification. - HELD THAT:- This issue was examined by a Division Bench of the Tribunal in the own case of the appellant [2025 (2) TMI 1296 - CESTAT MUMBAI], which arose from the passing of the speaking order. The Tribunal held that the appellant is entitled to seek exemption from payment of basic customs duty on the goods under the Exemption Notification. In view of the aforesaid decision of the Tribunal in the matter of the appellant and in the matter of Prostarm Info Systems Ltd [2025 (6) TMI 1020 - CESTAT MUMBAI] which decision has been accepted by the department, the impugned order dated 31st October 2023 passed by the Commissioner of Customs (Appeals), Nhava Sheva in respect of the subsequent 36 Bills of Entry would have to set aside and is set aside. All the 36 appeals are, accordingly, allowed. Issues: Whether the imported Uninterrupted Power Supply (UPS) systems classifiable under CTI 8504 4090 are eligible for exemption from Basic Customs Duty under Serial No. 4 of Notification No. 25/2005-Cus dated 01.03.2005.Analysis: The issue requires construction of Serial No. 4 of Notification No. 25/2005-Cus dated 01.03.2005 which provides exemption for 'Static converters for automatic data processing machines and units thereof, and telecommunication apparatus, other than static converters for cellular mobile phones.' The Tribunal in the appellant's own earlier Division Bench decision held that UPS systems classifiable under CTI 8504 4090 fall within the ambit of the exemption under Serial No. 4. A separate Division Bench of the Tribunal in Prostarm Info Systems Ltd reached a similar conclusion and that decision was accepted by the department. The impugned appeals arise after a prior speaking order led the appellant to self-assess at a higher rate; those prior speaking-order appeals were set aside by the Tribunal. In view of the Tribunal precedents favourable to the importer and the department's acceptance of one such Tribunal order, the subsequent 36 appeals based on the same issue require allowance.Conclusion: The appeals are allowed and the exemption under Serial No. 4 of Notification No. 25/2005-Cus dated 01.03.2005 applies to the imported UPS systems; the impugned orders disallowing exemption are set aside (decision in favour of the assessee).