TaxTMI 
TaxTMI 
2024 (4) TMI 1341
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.... Description of goods 4[4 8504 40 Static converters for automatic data processing machines and units thereof, and telecommunication apparatus, other than static converters for cellular mobile phones] 2. On examination of the goods it came to notice that the goods are also capable of being used in other places especially as inverters and the applicability of the notification was doubted by the department. The goods were thus assessed provisionally in terms of Section 18 of the Customs Act 1962. Later the appellant was issued a query to justify the claim. After due process of law, the original authority held the goods to be classified under 8504 40 90 and also held that the benefit of Notification No. 25/2005 dated 01.03.2005 at Serial No. 4 is not eligible to the appellant as the imported goods can be used for various purposes and are not for use only for automatic data processing machine and telecommunication apparatus. Against such order, the appellant filed appeal before Commissioner (Appeals) and vide common impugned order the Commissioner (Appeals) upheld the order passed by the adjudicating authority. Hence, this appeal. 3. The Ld. Counsel Shri Raghavan Ramab....
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....learance by payment of duty under protest. Therefore, the Appellant filed appeals against these 79 Bills of Entry as well. 3.7 The Commissioner (Appeals) vide Common Order-in-Appeal Nos. 468-547/2013 dated 28.03.2013 ('Impugned Order') dismissed the appeals filed by the Appellant. In the Impugned Order, the Commissioner by placing reliance on the Explanatory Notes to Budget Speech held that the intention of the Government is to exempt goods which are directly used in the IT industry, or such goods required for manufacture of the above goods subject to enduse condition. However, the Appellant being a trader cannot vouchsafe that the goods will be used only in IT industry. Further, the Commissioner (Appeals) observed that in case of ambiguity in notification, benefit must go to the State. 3.8 Aggrieved by the Impugned Order, the Appellant filed W.P. No. 18676 of 2013 before Hon'ble Madras High Court which was dismissed by the Ld. Single Judge on the ground on alternate remedy vide order dated 06.11.2014. Against this order, the Appellant also filed W.A. 425 of 2016 before the Division Bench of the Hon'ble Madras High Court which also dismissed the Writ Appeal vide order dated 0....
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....not capable of use with ADP machines. Further, as stated hereinabove, from a perusal of the relevant portions of the international standards as per which the subject goods have been certified, it is evident that the subject goods are designed and intended for use with ADP machines. Therefore, when the Appellant squarely falls within the terms of the exemption notification, the denial of exemption under the exemption notification must be set aside. A.5 It is also pertinent to note that the exemption notification does not mandate any proof of end use criteria being met and the same cannot be read into the Exemption Notification. Further, that as the imported goods can also be used for another purpose on account of additional features does not bar the Appellant from claiming the Exemption. A.6 The Impugned Order has failed to consider the above facts and has held that as the subject goods are capable of other uses the benefit under the exemption notification cannot be allowed. In this regard, the Impugned Order as well as the OIO have placed reliance on Explanatory Notes to Budget Speeches of the relevant financial year. A.7 The Appellant submits that the reliance on explanat....
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....us' are eligible for exemption. The goods (UPS Systems) imported by the appellant is capable of multiple uses like domestic, industrial, critical applications, industrial networks, severs, telecommunications and Health care etc. The UPS system which are used for such application other than automatic data processing machines and units thereof, and telecommunication apparatus are not eligible for exemption under the notification. The importer was asked to execute end use bond to protect the interest of revenue. This was refused by the importer in their reply dated 11.01.2012 stating that there is no such condition stipulated in the notification. This itself would show that the goods imported by the appellant is capable for use other than automatic data processing machines and units and telecommunication apparatus. 5. The Ld. AR argued that the exemption notification has to be understood by the plain language used in the notification without ignoring the objects and reasons for which the exemption notification has been issued by the Government. The purpose of issuing the notification should not be defeated. Further, the person who claims exemption must establish that he is eligible....
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....ot disputed by the department that the imported goods are capable for use in ADP machines. The benefit of exemption has been denied stating that these goods can be put to use for other purposes also. The notification does not say that the goods have to be used only for IT industry as alleged by the department. The words of the notification are very clear and does not give rise to any ambiguity. When there is no ambiguity in the language of the notification the benefit of the concessional rate of duty cannot be denied by adding words into the notification. 9. The Commissioner (Appeals) observed that the appellant has not furnished any evidence, vouching the end use and has not fulfilled condition of notification. In the reply dated 11.01.2012 the appellant submitted that there is no such condition stipulated in the notification therefore not able to execute such a end use bond. In para 17 it is noted by the adjudicating authority that the goods are not eligible for benefit of the notification as the goods are not meant for use only for automatic data processing machines and telecommunication apparatus. The relevant finding of the adjudicating authority in para 17 is reproduced as....
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....s.77,54,295.20/. The imported goods were self-assessed by the importer who claimed benefit of notification aforesaid for exemption from payment of Basic Customs as Duty in respect of imported goods "Static Converter for Data Processing Equipment." The said benefit was however not claimed in respect of Charger for UPS. The imported goods were assessed provisionally, in view of related party transactions and due process of law followed thereto. During the course of examination, the authorities observed that the Home UPS viz. the goods at Item No. 1 & 2 of the Bill of Entry/Invoice were nothing but household inverter without battery and that the said goods were meant to be used for appliances, such as Tube light, Energy Saving Lamps, TV etc. In view of the aforesaid, the department was of the opinion that Item No. 1 & 2 described in the invoice filed along with the Bills of Entry, as Home UPS were mere power supply units for Data Processing Equipments and were not eligible to be treated as "Static Converter for use in Data Processing Machines," to which the notification applied to. xxxx xxxx xxxx xxxx 5. We note that the said notif....
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....f Notification No. 25/2005Cus as the said static converters are not exclusively for Data Processing Equipment." 7. Under the circumstances, we find no merit in denying the exemption benefit referred to supra to the imported goods. Further, in view of our findings that there is nothing amiss in the declaration and nothing has been concealed, we are of the view that the case does not warrant confiscation of the imported goods and imposition of penalties. 8. Under the circumstances, we hold that the impugned goods are eligible for exemption benefits as claimed by the importer/appellant in terms of Notification No. 25/2005 Cus dated 01.03.2005 (vide Sl. No.4) and as referred to in para 4. 9. The order for confiscation of the goods and imposition of penalty is set aside and the appeal filed is allowed with consequential benefits as accrue in law. 12. In the case of Escorts Limited Vs. Collector of Customs, 1990 (47) ELT 68 (T) the question considered was whether the concessional duty can be denied merely because the equipment used for testing purpose in the automotive industry is also usable for general purpose. The Tribunal answered in the negative and ....
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....atrika, Madras v. CC, Madras), wherein it was held that "if, in addition to film processing the machine can perform other function of paper processing as well, exemption cannot be denied", the Tribunal granted the benefit of the notification to the assessee. In the case of T.I. Diamond Chain Ltd., Madras v. CC, Madras (Order No. 278/89-B.2 dated 18-8- 1989), the Tribunal has held that merely because a machinery (Vickers Hardness Tester) could perform other functions, benefit of the exemption cannot be denied. 9. The ratio of the above cited cases fully covers this appeal. The benefit of Notification No. 243/78-Cus., dated 26-12-1978 cannot be denied to the appellant merely because the equipment imported, in addition to its use for testing purposes in the automotive industry, is also used for general purposes. 10. In the light of the above discussion, we hold that the appellant is eligible for the benefit of exemption under Notification No. 243/78-Cus., dated 26-12-1978, set aside the impugned order and allow the appeal with consequential relief. 13. In the case of Daga Nylomet Private Ltd., Vs. Asst. Collector of Customs, 1993 (67) ELT 270 (Cal.) The Hon'ble Hi....
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....ed and amended) relates to the grant of exemption to specified parts falling within Chapter 84 or 85 for the manufacture of electronic goods subject inter alia to the importer executing a bond to pay on demand such sum as may be determined by the Assistant Collector in respect of the goods as are not proved to have been used for the purpose of such manufacture. Reference may also be made to Notification No. 1/91-Cus., dated 1-1-1991 which grants exemption to specified machinery and accessories imported by manufacturers of jute products subject to the importer being an actual user engaged in the manufacture of jute products and subject to the importer producing evidence that the goods had been installed for the purpose of manufacture of jute products. 8. In this case there is no such restriction and as held by the. Supreme Court in the case of Dunlop India Ltd. and Madras Rubber Factory Ltd. v. Union of India and Ors. [1983(13) E.L.T, 1566]: "When there is no reference to the use or adaptation of the article, the basis of end use for classification under a tariff entry is absolutely irrelevant." 20. In the facts of this case it must be held that the constr....
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....produce an extract of such account duly certified by the manufacturer evidencing receipt of the said imported goods in the premises of the manufacturer and he shall also pay duty on demand and in case of failure to do so. These conditions are for importation of the goods described under Heading B of the notification. There is no such condition attached to the goods which are imported under Heading A of the notification. Therefore, the words "for use" in the leather industry has to be interpreted by us. Shri V. Thyagaraj, the learned SDR stated that the words "for use" in the leather industry connotes actual use and not capable of being used. We are unable to accept this contention of the learned SDR in view of the fact that words used in the notification are "for use" in the leather industry. "For use" in the leather industry does not mean actual use. In the decision cited by the learned Counsel viz., 1988 (14) ECR 292, the Hon'ble Supreme Court in Para 10 has held as follows: 10. We are unable to accept the submission of Mr. Bana that, in order to get the exemption it must be shown that the goods in question, namely, the cement supplied by the assessee in this case was ac....
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....ble to the appellants since they are not engaged in the leather industry but are stockists for sale." A perusal of the above decision goes to show that the burden of actual use is not a condition attached to the exemption, as otherwise the notification would have provided for executing a bond and obliging the importer to produce proof of actual use. In any event in the case of the goods falling under Heading A, there was no such condition attached and the conditions attached were only in the case of the goods described under Heading B of the notification. In view of the above, we are not able to agree with the contention of the learned SDR. At this stage, the learned Counsel for the appellants drew our attention to the Collectors' conference where this issue was taken and he also produced a copy of the minutes of the Collectors' conference which is reproduced below: CONFERENCE CONCLUSION: After discussing the issue, the Conference recommended that since question raised by Bangalore Custom House is about the goods which can be used for general purpose also. T.R.U. should re-examine the issue whether the items of general use can be shifted to list `B'. The conferenc....