TaxTMI 
TaxTMI 
2025 (2) TMI 1296
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....S00-0-06 MAS GP4 20KW External Battery (Static Converter for ADP' by classifying it under Customs Tariff Item (CTI) 8504 4090, under Bill of Entry (B/E) No. 5582746 dated 25.09.2021 and self-assessed the same with applicable Basic Customs Duty (BCD) 'NIL', by claiming full exemption from BCD applicable from the tariff rate 20% ad valorem vide Serial No. 4 of Notification No. 25/2005-Customs dated 01.03.2005 plus IGST at 18% adv., in terms of Section 17(1) of the Customs Act, 1962. The said B/E was processed through Customs Automated System/Indian Customs Electronic Data Interchange System (herein after referred to as EDI, in short), and the self-assessment done was facilitated under Risk Management System (RMS) of EDI; and thereafter at the time of granting Out Of Charge (OOC), the Customs officer had verified the notification benefit claimed by the appellants-importer, by raising a query to submit the catalogue of the imported goods. Accordingly, the appellants submitted the product catalogue to the customs officer who had observed that the imported goods are used in small & medium-sized data centres, banks, medical facilities, medical devices, telecom & media infrastructure, tran....
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....ification benefit. He stated that the appellants in respect of imports made in Chennai, had initially approached the Hon'ble High Court of Madras in W.P.4095 of 2012 feeling aggrieved against the order of the Commissioner of Customs (Appeals) in common Order-in-Appeal Nos. 468-547/2013 dated 28.03.2013 and against Hon'ble High Court's dismissal order dated 06.11.2014 of their case, subsequently they had approached before the Division Bench in W.A. 425 of 2016 which was also dismissed vide Hon'ble High Court's order dated 06.02.2016 on the grounds of alternate remedy available to them. The said case was appealed before the Tribunal, and after the case was finally heard the Co-ordinate Bench of the Tribunal at Chennai, wherein it had passed the Final Order No. 40419/2024 dated 15.04.2024, by holding that the exemption benefit at Serial No.4 of Notification 25/2005-Customs dated 01.03.2005 is eligible to the goods i.e., UPS imported by them. 3.2 Learned Advocate submitted that the since there is no dispute in classification of imported goods declared by the appellants, and all the grounds based on which the impugned order had denied the customs duty exemption have been examined by ....
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....bsence of mains power, which is different from static converter; (iii) UPS is for use with several machines and equipment and not only for ADP machines, and since exemption entry for 'static converter' refers to limited use, goods having multiple use should not be given exemption benefit. 6.3 In order to address the above issue of eligibility to exemption notification, we would like to refer to the Serial No. 4 of Notification No. 25/2005-Customs dated 01.03.2005 which is extracted and given below: Notification No. 25/2005-Customs dated 01.03.2005, as amended EXEMPTION TO SPECIFIED GOODS OF CHAPTERS 84 AND 85 *** "In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts following the goods of the description specified in column (3) of the Table below and falling within the heading, sub-heading or tariff item of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) as are specified in the corresponding entry in column (2) of the said Table, when imported into India, from the whole of the duty....
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...., from the whole of the duty of customs leviable thereon under the said First Schedule, namely :- Table S. No. Heading, Sub - heading or Tariff item Description of goods (1) (2) (3) 1. 8472 90 Automatic teller machines 2. 8473 10 00 Printed circuit assemblies of word processing machines (1) (2) (3) 3. 8473 40 Printed circuit assemblies for automatic teller machines 4. 8504 40 Static converters for automatic data processing machines and units thereof, and telecommunication apparatus Exemption entry of Sl. No. 4 after amendment vide Notification No. 67/2017-Customs 14.07.2017 [TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) Notification No. 67/2017 - Customs New Delhi, the 14th July, 2017 G.S.R. (E) .- In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of....
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....inition', if any, provided in the Customs Tariff Act. In the absence of any statutory definition, or any guideline provided by HS explanatory notes, the trade parlance theory is to be adopted for ascertaining as to how the goods are known in the common trade parlance for the purpose of dealing between the parties. 6.7 On the above basis, we have examined the scope of coverage of goods under various sub-heading/tariff items of sub-heading 8504, which are extracted and given below: "Tariff Item Description of goods (1) (2) 8504 ELECTRICAL TRANSFORMERS, STATIC CONVERTERS (FOR EXAMPLE, RECTIFIERS) AND INDUCTORS xxx xxx 8504 40 - Static Converters 8504 4010 --- Electric Inverter --- Rectifier: 8504 4021 ---- Dip bridge rectifier 8504 4029 ---- Other 8504 4030 --- Battery chargers 8504 4040 --- Voltage regulator and stabilizers (other than automatic) 8504 4090 --- Other xxx xxx" On plain reading of the description of the goods covered under six tariff items of the sub-heading 8504 40 for 'static converters' it clearly transpires that various type of goods such as (i) electric inv....
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....rted goods and the scope of coverage of goods under the sub-heading 8504 40, and the exemption entry vide Serial No. 4 of Notification No. 25/2005-Customs dated 01.03.2005, as amended, we are of the considered view that the impugned order denying the customs duty exemption benefit to the imported goods in the present case, does not stand the legal scrutiny. 7. In this regard, we find that the Co-ordinate Bench of the Tribunal in the case of self-same appellants vide Final Order No. 40419/2024 dated 15.04.2024 have carefully examined various objections raised by the department in disallowing the custom duty exemption to the appellants. On analysis of the various case laws on the issue, the Tribunal had come to the conclusion that denial of such customs duty exemption under Serial No. 4 of Notification No. 25/2005-Customs dated 01.03.2005 is not justified and therefore set aside the order of the Commissioner (Appeals). The relevant paragraphs of the said order is extracted and given below: "8. Heard both sides. The issue to be decided is whether the appellant is eligible for the benefit of exemption at Serial No.4 of the Notification 25/2005 dated 01.03.2005. The relevant....
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....cating authority. The finding of the Commissioner (Appeals) is as under: From the plain reading of the above it is clear that the intention of the Government is to exempt either the goods which are directly used in the IT industry or such goods required for manufacture of the above goods subject to end-use condition are only exempted for the payment of basic customs duty. The assessee being a trader had not come out with any unimpeachable evidence to show that the impugned goods are directly used only in the IT industries. The appellant being a trader cannot vouchsafe that the goods will be used only in the IT industries. With such an uncertainty the condition and purpose of the notification cannot be fulfilled. 11. The adjudicating authority as well as the Commissioner (Appeals) has relied on the Explanatory notes of the budget speech to hold that the object of the notification was to exempt goods for IT and Telecommunication industry only. The notification does not use the word 'only'. When the plain language of the notification is clear and unambiguous, the department ought not to have relied on extraneous aids to interpret the notification. 12. The ap....
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....e Madras High Court in the W.P. No.18676 of 2013 in the case of Socomec UPS India Pvt. Ltd. for denying the exemption benefit, is incorrect. This is for the reason that the facts referred to in the relied upon case are different, and it is applicable only in a situation where there is an ambiguity or doubt regarding an exemption provision and it has stated how the same should be resolved. This is not applicable in the present case, since there is no doubt about the scope of coverage of the goods under the exemption entry, and vide amending Notification No. 67/2007-Customs dated 14.07.2017, the scope of exemption was subsequently restricted by excluding 'static converters' for cellular mobile phones. In any case, after the outcome of this case, the Tribunal has passed the Final order dated 15.04.2024 extending the exemption to the appellants. The relevant paragraph of the said judgement of Hon'ble Madras High Court is reproduced below: "18. In any each bill of entry has to be independently assessed and there is sufficient jurisdiction for the Assessing Officer to call for the information from the importer, more so, when the importer claims full exemption of basic Customs Du....
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....phs of the said order is extracted and given below: "11. A machine which has got multi-function must be classified according to its principal function. The principal function as far as UPSS is concerned is of a static converter. When it is so understood, relying on the interpretative rules, it can be classified invoking Rule 3 therein as falling under subheading 8504. As observed by the Apex Court in Dunlop India Ltd. & Madras Rubber Factory Ltd. v. Union of India - 1983 (13) E.L.T. 1566, "when an article has, by all standards, a reasonable claim to be classified under an enumerated item in the Tariff Schedule, it will be against the very principle of classification to deny it the parentage and consign it to an orphanage of the residuary clause". When UPSS falls under 8504 as an enumerated item, it cannot be consigned to an orphanage of the residuary clause 8543. 12. In view of what has been stated above, it is our considered opinion that Uninterrupted Power Supply System is classifiable under Tariff subheading 8504 as contended by the manufacturer and not under 8543 as taken by the departmental officers. The result therefore is that the orders impugned in this ap....
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....y of 5% is extended to specified machinery/equipment which are meant for use in textile industry vide S. No. 250 of Notification No. 21/2002-Cus., dated 1-3-2002. List 30 of the said Notification specifies labeling machine at Sl. No. 84 therein. The intention of the Notification is to allow concessional duty for labeling machines which are for use in textile industry. The field formations have noticed import of Labeling machines of general purpose which can be used not only in textile industry but also in other industries. Labeling machines, imported by trading firms are normally used for general purposes and not in textile industry alone. But importers of such machines are claiming concessional rate of duty under the said notification by declaring them as machinery/equipment for use in textile industry. Rejection of the claim of the importers may not be found sustainable as the imported labeling machines can be used also in textile industries. Labeling machines being an omni-bus term, the Notification gives room for unscrupulous importers to avail of unintended benefit. Decision : The Board deliberated upon the language of the notification. The expression used in the noti....