AI Drafter 
TaxTMI 
TaxTMI 
2021 (7) TMI 1027
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....ngine (Turbo-jets, turbo-propellers and other gas turbines: Turbo-jets: Of thrust exceeding 25 KN) and CTH 7326 19 90 for Engine Stand (Other articles of iron or steel: Forged or stamped, but not further worked: Other: Other); the appellants are not eligible for the benefit of exemption under Notifications, No. 21/2002-Cus., dated 01.03.2002 or Notification No. 12/2012-Cus., dated 17.03.2012, as the imported goods are not classifiable as 'parts of aircraft' by virtue of exclusion under Section Note 2(e) to Section XVII which reads as follows: "(2) the expressions "parts" and "parts and accessories" don not apply to the following articles, whether or not they are identifiable as for the goods of this Section: (e) machines or apparatus of headings 8401 to 8479, or parts thereof; articles of heading 8481 or 8482 or, provided they constitute integral parts of engines or motors, articles of heading 8483". 2. Revenue also holds that the said notifications specifically exempt 'parts of aircraft'; and 'aircraft engines' being distinct goods, the exemption meant specifically in respect of 'parts of aircraft' cannot be extended to 'aircraft engines'; in cases where the legislatur....
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....34/15/2014-TRU dated 10.07.2014 clarified that "aircraft engines and parts thereof" are eligible for customs duty exemption under Sl. No. 454 of Notification No.12/2012-Cus., dated 17.03.2012 when imported for servicing, repair or maintenance of aircrafts used for scheduled operations subject to fulfillment of conditions specified therein. 3. Learned Counsel submits that it was never their intention to export the aircraft engine and the stand to any foreign territory, as the replacement aircraft engine along with the stand were readily available at Delhi; the airway bill, export invoices and shipping bills filed by Appellants with the Delhi Customs clearly mention the consignee as "Inter Globe Aviation Limited, Engineering Department, Bangalore International Airport Ltd. (BIAL), Devanahalli - 560 300, Bangalore, Karnataka, India; the exported goods were never imported into Germany as it never crossed the Customs Frontiers in Germany; no Bills of Entry were ever filed with the Frankfurt Customs authorities in Germany; therefore, the goods cannot be said to have been exported from India in the first place and accordingly, cannot be said to be re-imported to India. 4. Learned Co....
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....pters or simulators of aircraft" shall include engines, engine parts, wireless transmission apparatus, wireless receivers, iron and steel washers and screws, ball and roller bearings and other parts." 4.2. He submits that engine stands imported by the Appellants along with the engines are integral part of the aircraft engine as the engine cannot be transported/ stored without the engine stand; the engines stands are commercially known and sold in the market as parts of aircrafts as they have been designed for use solely and principally with the aircraft engines; hence, they qualify to be parts of aircrafts. 4.3. He submits that the department's reliance placed on the Section Note 2(e) and the HSN Explanatory Notes is untenable; Chapter 88 falls under Section XVII of the Customs Tariff. Section Note 2(e) to Section XVII provides as under: '2. The expressions "parts" and "parts and accessories" do not apply to the following articles, whether or not they are identifiable as the goods of this Section: .... (e) Machines or apparatus of headings 8401 to 8479, or parts thereof; articles of heading 8481 or 8482 or, provided they constitute integral part....
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....r Notes; however, if exemption is extended without referring to the tariff heading, then exemption would be available even though for purposes of classification it may be considered to be something else; relevant Sl. No. 346D of Notification No. 21/2002-Cus., dated 01.03.2002 or Sl. No. 454 of Notification No. 12/2012-Cus., dated 17.03.2012 provides exemption to 'parts of aircraft of heading 8802' which are classifiable under 'Any Chapter'; if an exemption is extended in a notification without referring to the tariff heading of the Customs Tariff, then such exemption shall be available to the assessee even though for purposes of classification, it may be considered to be something else under the Customs Tariff. In this regard, reliance is placed on - • CC, Bangalore Vs Maestro Motors Ltd., 2004 (174) ELT 289 (SC) • CCE, Jaipur v. Mewar Bartan Nirman Udyog, 2008 (231) ELT 27 (SC) 4.7. He submits that in the matter of Jasu Shipping Company Pvt. Ltd. v. CC (Import) Mumbai, 2018 (362) ELT 900 (Tri - Mumbai), Hon'ble Tribunal has held that when the parts are, admittedly, not classifiable in the same chapter as the main goods and the exemption not....
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....er stage even if the said benefit has not been claimed at the assessment stage under the Bills of Entry; he relies on the Apex Court decision in the matter of Share Medical Care Vs UOI 2007 (209) ELT 321 (SC). He submits in the case of Mohit Overseas Vs Commissioner of Customs, 2016 (335) E.L.T. 18 (Del), the Hon'ble High Court has held the petitioner could avail the provisions of Section 149 of the Customs Act, 1962 based on documents which existed at the time of clearance of imported goods for availing the benefit of the exemption notification which was in existence at the time of import of goods. 8. Learned Counsel submits that the impugned BOEs in the present case have been finally assessed at the time of import and such assessment has not been challenged by the department; hence the assessment attained finality and cannot be reopened by the impugned order; he relies upon Hon'ble Supreme Court in the case of ITC Ltd Vs CCE, Kolkata-IV, 2019 (368) ELT 216 (SC) wherein it was held that the sign/endorsement made on the bill of entry is an order of assessment under Section 17 which is an appealable order and any person including the departmental authorities who are aggrieved by ....
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....) has held that when the principal amount (duty) is not payable due to exemption, there is no occasion or basis to levy any interest, either; no penalty is imposable on an assessee when the issue involved is bona fideinterpretation of terms of an exemption notification. He placed Reliance on • CCE Vs HMM Limited, 1995 (76) ELT 497 (SC) • CCE, Aurangabad VSBalakrishna Industries, 2006 (201) ELT 325 (SC) 12. He further submits that the penalty under the Section 114AA can be imposed when the goods have been exported by forging the documents knowingly or intentionally; the present case does not relate to export at all and even for imports, all the documents presented for imports were genuine and not forged and thus penalty is not imposable under Section 114AA of the Customs Act, 1962. 13. Learned Authorised Representative, appearing for the Revenue reiterates the findings of the OIO. 14. Heard both sides and perused the records of the case. We find that the issues that require consideration in the appeal are as to (a). Whether the goods are to be treated as imported into the country or shifted from Delhi to Bangalore as clai....
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....tention of re-import was not indicated and marks and numbers were not verified by proper officers. Under the circumstances, we find that the argument taken by the appellants does not stand the scrutiny of law. In order to avail the benefit under any notification, the appellants are required to establish the bona fides by following the proper procedure; there was no reason as to why the goods were not declared to be for re-import purposes at the time of loading in Delhi; the appellants would have given proper intimation/declaration to the department so that the department could have carried out the necessary examination/investigation. The facts of the case do clearly indicate that the appellants have filed a shipping bill while loading the goods at Delhi; at the time of movement from Germany to Bangalore and have also filed a bill of entry at Bangalore without making any reference to the intent of re-import etc. Therefore, we find that it is not open to the appellants to claim the same as an after-thought. In view of the same, we have no hesitation whatsoever to hold that the impugned goods are not eligible for exemption contained in terms of notification 94/....
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....ct, 1975, the Interpretative Rules to the Tariff are applicable and the terms used in the Notification shall be understood by applying the applicable Section Notes and Chapter Notes; however, if exemption is extended without referring to the tariff heading, then exemption would be available even though for purposes of classification it may be considered to be something else; the relevant Sl. No. 346D of Notification No. 21/2002-Cus., dated 01.03.2002 or Sl. No. 454 of Notification No. 12/2012-Cus., dated 17.03.2012 provides exemption to 'parts of aircraft of heading 8802' which are classifiable under 'Any Chapter'. 17. On the other hand Learned Commissioner says that the stand of the department is that the relevant notifications specifically exempt 'parts of aircraft' and the 'aircraft engines' being distinct goods; exemption meant specifically in respect of 'parts of aircrafts' cannot be extended to 'aircraft engines'; he relies upon Hon'ble Supreme Court's decision in the case of Maestro MotoRs. 2004(174) ELT 289(SC)), wherein it was held that the goods must be classified in the same manner both for purposes of payment of customs duty as wel....
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....e noticee, which is not permissible as per law laid down in Saraswati Sugar Mills (supra); entry 446 reads as "parts of gliders or simulators of aircrafts (excluding rubber tyres and tubes of gliders)" whereas Entry 454 reads as "parts (other than rubber tubes) of aircraft of heading 8802"; on a plain reading, it is clear that the scope of both entries is very different; explanation clarifying one Entry cannot be used to clarify scope of another Entry; scope of explanations under condition 71 is different from that of under condition 21 ( for Entry 454); explanation under condition 21 reads as.- the expressions "scheduled air transport services' and "scheduled air cargo service" shall have the meaning respectively assigned to them in Condition 73; Learned commissioner finds that if the contention of the noticee is to be accepted, there was no need for Explanation below Condition 21 as the Explanation 1 below Condition 71 would have sufficed; if the notification chose to borrow the scope of expression "parts of aircraft" from explanation below Condition 71, it would have mentioned clearly so; in view of the above, the appellants contention is not acceptable. 17.3. We find tha....
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....e Circular issued by CBEC would be of any help to the cause of the appellants. 18. Coming to the issue as to whether the issuance of notice under section 28 of Customs Act, 1962 was correct as no appeals have been filed against the assessed bills of entry, we find that the appellants placed reliance on the decision of Hon'ble Supreme Court in the case of ITC Ltd Vs Commissioner of Central Excise, Kolkata IV, 2019 (368) ELT 216 (SC) wherein it was held that the sign/endorsement made on the bill of entry is an order of assessment under Section 17 which is an appealable order and any person including the departmental authorities who are aggrieved by order of self assessment should challenge the assessment by way of filing an appeal against such self-assessment under Section 128 of the Customs Act, 1962; they submit that in the absence of any appeal against the Out of Charge orders for clearance of goods or the Bills of Entry passed by the proper officers of Customs, the said orders of assessment and clearance have attained finality and the same cannot be challenged or negated by issuance of the impugned order. 18.1. Learned Commissioner, on the other hand, finds that the case la....
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....exemption available to 'parts of aircraft' cannot amount to misstatement or mis-declaration with an intent to evade duty; the imported goods are in fact parts of aircrafts, irrespective of their classification under the Customs Tariff; mere claiming an exemption or classification under particular heading on the basis of bona fide belief does not amount to the mis-declaration as held in Northern Plastic Ltd Vs CCCE 1998 (101) ELT 549 (SC); wrong classification cannot be reason to allege mis-declaration as held in. • CCE Vs Ishaan Research Lab (P) Ltd, 2008 (230) ELT 7 (SC) • Chamundi Die Cast (P) Ltd Vs CCE, 2007 (215) ELT 169 (SC) • Densons Pultretaknik Vs CCE reported in 2003 (155) ELT 211 (SC) 19.1.On the other hand, the learned Commissioner finds that the importer has declared the goods as 'aircraft engine' and 'aircraft engine stand' and simultaneously claimed the CTH relevant for 'parts of aircraft' in the respective Bills of Entry; further, the benefit of Notification No. 21/2002-Cus dated 1.3.2002 (Sl. No. 346D) and Notification No. 12/2012-Cus dated 17.03.2012 (Sl. No. 454) has been claimed as 'parts of a....