2006 (1) TMI 341

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....adhesive materials) valued at Rs. 26,50,397/- without payment of duty. The import was affected after approvals from the Development Commissioner and subsequent approval of the Board of Approvals. Revenue proceeded against the appellants on the grounds that the imported goods are parts of building materials and are not eligible for duty free clearance in terms of the Notification. The Deputy Commissioner of Customs in his Order-in-Original dated 24-12-2001 held that the goods must be classified as building materials and cannot be classified as capital goods. The post facto approval from the Board of Approvals for import of the said goods was not accepted by the Adjudicating Authority. Hence, he passed an order demanding duty of Rs. 14,94,417....

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.... The Commissioner has stated that it is not clear how the impugned goods could be necessary for export of such services unless extended link is contrived. The appellant is a prestigious centre set up for developing world-wide research and development, therefore requires world class facilities for developing research results and exporting the same. The appellant has a completely computerized environment, which requires air-conditioning at the highest levels. The said materials, which are imported are required to ensure that air-conditioning is effective and is meant to be an energy conserving device. The write-up clearly shows that the said items are required for air-conditioning ductwork. Our attention was invited to the relevant paragraph ....

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....ang), wherein it was held that in case of export oriented unit for the purpose of adjudication under Section 122 of Customs Act, 1962 any matter against such 100% EOU is to be adjudicated only after referring the same to the Development Commissioner. As regards the post facto approval from the Board of Approvals, the learned advocate relied on Apex Court's decision in Auto Tractors Ltd. v. CCE reported in 1989 (39) E.L.T. 494 wherein the Supreme Court allowed a refund claim based on subsequent certification though there was a condition that it must be produced by the parties before clearance. The Commissioner's finding that the impugned goods cannot be termed as capital goods used in connection with export of services is erroneous as per th....

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....ering the services certain goods may be directly used and certain other goods may have indirect use. In the present case, the appellants are mainly engaged in research and development and export of the results of their activities. It is the contention of the appellants that such research activities, as they undertake require a world-class environment. The impugned goods viz., Armaduct sheets and insulation tapes are meant for insulating the roof slap from inside the building for preventing heat radiation into the air-conditioning area. They have been accepted as accessories to the air-conditioners by the Commissioner (A). However, he has come to the conclusion that the impugned goods may not be necessary in connection with the services rend....