TaxTMI 
TaxTMI 
2026 (4) TMI 761
X X X X Extracts X X X X
X X X X Extracts X X X X
....cation No. 50/2017-Customs dated 30.06.2017 (Sl.No.413 and 414); and thereby paid Basic Customs Duty (BCD) @ 5%, SWS @ 10% and IGST@ 18% at the time of clearance of the goods. 3. During the Post Clearance Audit of the above imports, Department entertained the view that Appellant is not eligible for the benefit of notification No. 50/2017Customs dated 30.06.2017 as they failed to fulfill condition No. 9 of the notification, which they were required to fulfil for claiming benefit under Sl. No. 413 and 414 of the said notification. Accordingly, after following due process of issuing Consultative letter dated 02.03.2022, the reply to which was not found satisfactory, followed by a pre-notice consultative letter dated 31.10.2022 and personal hearing dated 16.12.2022, a show cause notice dated 02.01.2023 was issued to the Appellant by the LAA with the proposals to: - i. deny the duty benefit availed under Serial No. 413 and 414 of Notification No. 50/2017-Cus dated 30.06.2017 read with Notification No. 01/2021 dated 01.02.2021 for the goods imported vide Bill of Entry No. 2295456 dated 01.02.2021 and 29 other bills of entry for not complying with the procedures laid down in C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing the impugned order. 6.1 The Ld. Advocate Mr. M. Karthikeyan appeared and argued for the Appellant and submitted that for all the impugned Bills of Entry (and even earlier), they initially filed them claiming exemption under Sl. No. 413 or 414 of Notification No. 50/2017-Cus. After assessment by the proper officer, they requested the Deputy Commissioner of Customs to recall and reassess the Bills of Entry to include EU bond details in the bond column, and accordingly all the Bills of Entry were recalled and updated to support the exemption claim. 6.2 He further submitted that the Appellant have executed the required end-use bonds/undertakings to comply with the condition that the imported goods would be used for the specified purpose. They further submitted Chartered Engineer's Certificates dated 07.04.2022, 13.12.2022 and 15.12.2022 in respect of the Hyderabad, Tiruchirappalli and Ranipet units respectively to confirm such usage, consistent with the earlier procedure prior to the amendment of notification No. 50/2017-Cus dated 30.06.2017 under which bonds were discharged upon submission of such certificates. 6.3 He contended that the Appellant complied with the end-use....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion to extend such benefits despite procedural lapses, as seen from the following decisions on the applicability of concessional rates specified in Notification No. 50/2017-Cus dated 30.06.2017: - i. Cepheld India Private Limited - 2025 (6) TMI 1899 - CESTAT NEW DELHI ii. Hemogenomics Private Limited - 2025 (10) TMI 820 - CESTAT NEW DELHI 6.7 He submitted that the IGCR Rules, 2017 were amended by Notification No. 02/2021 dated 01.02.2021, changing the filing requirements for exemption claims. The IGCR Rules, 2017 were then amended by way of substitution vide notification No. 07/2022 Cus. (NT) dated 01.02.2022. Prior to the amendment dated 01.02.2021, details about claim of exemption were required to be filed only with the Customs at the port of import, and after the amendment dated 01.02.2022, the same procedure continued. However, during the intervening period between 01.02.2021 and 01.02.2022, the appellant was required to submit the details both with the Customs at the port of import and with the jurisdictional Customs Officer. 6.8 The Ld. Advocate placed reliance on the decisions in Imperial Warehousing Industries Limited [2025 (9) TMI 141 - CESTAT MUMBA....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed and for all the units letters from Chartered Engineers certifying the intended use had been submitted to the Respondent Adjudicating Authority even at the time of hearing pre-consultative notice and further end-use certificate issued by the jurisdictional customs officer at Hyderabad was submitted to the LAA while replying to the SCN. The learned Advocate also placed before the Bench the end-use certificate issued by the jurisdictional customs officer at Tiruchirappalli. On a specific query from the Bench as to why the certificate could not be produced before the LAA, Mr. Karthikeyan said the jurisdictional customs officers did not act on their representations in view of the proceedings initiated at the place of import. The same was taken on record. After a couple of days, Mr. Karthikeyan, the Ld. Advocate, mentioned before the Bench that the end-use certificate pertaining to their unit at Ranipet has also been received from the jurisdictional Customs officer. We permitted him to file the same with the Registry. 7. The Ld. Authorized representative Mr. Sanjay Kakkar stoutly defended the impugned Order and said that the appellant forfeited the right to benefit in view of nonco....
X X X X Extracts X X X X
X X X X Extracts X X X X
....for specified purposes in the manner stated is central to availing of benefit of concessional rate of duty under Notification No. 50/2017-Customs dated 30.06.2017 as amended. The condition stipulated earlier is executing a bond at the port of importation with an undertaking to pay differential duty and condition 9 specified in the amending notification requires to follow the procedure set out in CIGCRD which are intended to prevent misuse and for ensuring the use of the imported goods subjected to concessional rate of duty only for the intended or specified purposes. 9. We are, therefore, of the firm view that noncompliance with CIGCRD, a procedural requirement, cannot come in the way of the appellant enjoying the benefit of the said notification so long as they are able to establish that the imported goods covered by the 27 BsOE were used only for the specified purposes. Under these circumstances, we find force in the argument of the appellant that when there is no dispute as to the compliance with a substantive requirement, the benefit of concessional rate of duty cannot be denied for procedural non-compliance when they have submitted proof to show that the imported items were....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of import instead of before the customs officers at places where the imported goods were meant to be used as per the amended procedure. The submissions of the appellant, that once the Officer at the port of import agreed for assessment under the said Sl. No(s), they would submit a letter to the DC, Customs requesting him to permit to reassess the Bills of Entry for including the details of the bond executed in the bond column for EU bond (sample copies filed by the Advocate for the Appellant) based on the request, the Bills of Entry were recalled for including the said details; and the proper officers also accepted their claim for the exemption as also the end-use bond / undertaking and allowed them the exemption, remain unrebutted. It is thus clear that despite change in procedure from 01.02.2021 requiring the appellant to execute bonds before the customs officers at places of use of the imported goods, the customs officers at the port of import continued to accept the same as per the old procedure unaware of the changes brought about. If it is the case of the department that the appellant was guilty of violation in not having followed the amended procedure, the officers at the pl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nsultative notice is not to make the noticee agree and pay the demand but to find out whether any worthwhile purpose would be served by initiating proceedings proposed under SCN. This is more so as the appellant in this case is a reputed PSU and the imported goods were meant for power generation. We could not ascertain any reasons on the part of LAA to not even consider the End-use Certificate issued by the proper officer at Hyderabad when it was produced before him during adjudication. Thus, as observed by us in the preceding portions of this Order, the LAA was bent upon saddling the appellant with duty liability. 13. Further, viewed from another angle, the dispute in this case primarily relates to interpretation of the amendments made in Notification No. 50/2017-Customs dated 30.06.2017 vide Notification Nos. 02/2021-Customs (NT) dated 01.02.2021 and 07/2022-Customs (NT) dated 01.02.2022. While the department's case is entirely dependent on notification Nos. 02/2021-Customs (NT) dated 01.02.2021 which amended notification No. 50/2017Customs dated 30.06.2017 by way of introducing a new condition to be fulfilled by the Appellant, viz. complying with the procedure prescribed unde....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... whether the declaration required to be filed for claiming SSI exemption is a substantive condition or not, on reference to Third Member, the majority decision held that mere non filing of declaration is only procedural. In support of their contention before the LAA that beneficial exemption should be liberally interpreted, Appellant relied on the decision of the Hon'ble Apex Court in the case of Government of Kerala & Anr. v. Mother Superior Adoration Convent [2021 (3) TMI 93 Supreme Court] wherein the Hon'ble Apex Court followed its earlier decisions in the cases of Commissioner of Customs v. M.Ambalal & Co. [2010 (12) TMI 16 SC], CCE Vs Favourite Industries [2012 (4) TMI 65 SC], Commissioner of Customs Vs M/s. Dilip Kumar And Company [2018 (7) TMI 1826 (SC)]. In the proceedings before the LAA, further reliance was also placed by the Appellant on the judgment of the Hon'ble High Court of Guahati wherein the Hon'ble Court allowed an appeal against the decision of the Tribunal in the case of Vernerpur Tea Estate [2016 (136) ELT 549 (Tri Kol) which upheld the rejection of claim of refund of duty where there was a delay of more than 6 years in claiming refund, and while doing so the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion No. 07/2022-Cus (NT) dated 01.03.2022 is retrospective, then the amendment made vide Notification No. 02/2021 dated 01.02.2021 becomes redundant/otiose. Such an interpretation is not permissible as settled by judiciary by various judgments. 37. It is a well settled principle of interpretation of statute is that, the interpretation should not make a part of the statute as redundant. In the case of Anant HanumantUlahalkar And Anr vs State of Maharashtra and Ors dated 9 December, 2016 it was held that any interpretation which renders the provisions of a Statute redundant, otiose or surplusage has to be avoided. In case of Rao Shiv Bahadur Singh vs The State of UP AIR 1953, SC 394, Apex Court held that "it is incumbent on the court to avoid a construction, if reasonably permissible on the language, which would render a part of the statute devoid of any meaning or application". Further in the case of Shri Balaganesan Metals Vs. Shri M.N. Shanmugham Chetty & Ors AIR [1987] SC 1968, the Supreme Court held that "It is a well settled rule of interpretation of statutes that the provisions of the Act should be interpreted in such a manner as not to render any of its provisions o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1 would become redundant/otiose, which is not permissible as settled by judiciary by various judgments. However, LAA has not cited any case law where it is held that retrospective amendment of any notification resulting in rendering an earlier notification redundant/otiose is not permissible. 19. For rejecting the contention of Appellant that a beneficial notification cannot be denied to them merely for a procedural lapse, LAA has relied on the case of Chandra Kishore Jha Vs Mahavir Prasad [AIR 1999 SC 3558] to hold that it is a well-settled principle that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner, which is reiterated in the case of Dhananjay Reddy vs. State of Karnataka [AIR 2001 (SC) 1512]. LAA has failed to appreciate that the case laws on the issue of failure to do a thing in a particular manner cannot by any stretch of imagination negate the settled law through various judicial pronouncements that a beneficial notification cannot be denied merely for a procedural lapse. It is well settled that a decision is an authority only for what it actually decided on particular facts and circumstan....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... be invoked at different stages of interpreting it. When the question is whether a subject falls in the notification or in the exemption clause then it being in nature of exception is to be construed strictly and against the subject but once ambiguity or doubt about applicability is lifted and the subject falls in the notification then full play should be given to it and it calls for a wider and liberal construction..." (Emphasis supplied)" Thus, it is seen that LAA has misread the case law to mean that the entire notification has to be read either strictly or liberally and held that the Notification No. 50/2017-Cus (Sl. Nos. 413 and 414) claimed by Appellant should be strictly construed. However, the principle laid down by Hon'ble Supreme Court in M/s. Wood Papers Ltd. & Ors. (supra) and reiterated in Mangalore Chemicals & Fertilizers Ltd [1991 (55) ELT 437 (SC)] is that the language of the notification has to be applied strictly at the stage of finding out whether the Appellant is eligible for the exemption notification but thereafter, it should be interpreted liberally. Moreover, in M/s. Wood Papers Ltd. & Ors. (supra) which was relied by Hon'ble Supreme Court in Mangalore....
X X X X Extracts X X X X
X X X X Extracts X X X X
....elong to the area of procedure. iii. It is erroneous to attach equal importance to the non-observance of all conditions of a notification irrespective of the purposes they were intended to serve. Since the entire dispute in the instant case is based on non-observance of condition No. 9 of Notification No. 50/2017Customs, the principles emerging out of Mangalore Chemicals & Fertilizers Ltd [1991 (55) ELT 437 (SC)] are relevant for deciding this case. 23. Condition No. 9 of Notification No. 50/2017Customs which is required to be fulfilled by importers claiming benefit of Sl.Nos.413 and 414 of the notification reads as under: - "If the importer follows the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017" The intended purpose of any notification containing the condition that the importer claiming benefit under the notification should follow the procedure set out in Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 can be discerned from Rule (2)(1) of the said Rules which reads as under: - "(1)These rules shall apply to an importer, who intends to avail the benefit of an exemption notificati....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and another for himself cannot be allowed. Therefore, all the above case laws relied upon by the LAA deserve to be rejected. 26. In para 46 of impugned order, LAA has stated that in the case of The Commissioner of Customs (Import), Mumbai Versus Dilip Kumar & Company [2018 (9361) E.L.T. 577 (SC)], the Hon'ble Supreme Court of India observed that: - "Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption claim or exemption notification" "When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue." It is observed that in the submissions to LAA vide letter dated May 23, 2023, Appellant has placed reliance on the decision of Hon'ble Supreme Court in the case of Government of Kerala & Anr. v. Mother Superior Adoration Convent [2021 (3) TMI 93 (Supreme Court)] where while dealing with interpretation of exemption provision contained in the Kerala Building Tax Act, 1975, following the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re convenient and easier for the respondent to carry on the production of the goods undisturbed by the vagaries of the lessor and without any necessity to spend a part of its income on rent. It is not the case of the appellant that there were any mala fides on the part of the respondent in obtaining exemption in the first instance as a unit with a capital investment below Rs. 3 lakhs and increasing the capital investment subsequently to an amount exceeding Rs. 3 lakhs with a view to defeat the provisions of any of the relevant statutes. The bona fides of the respondent have never been questioned by the appellant." 17. Likewise, in State of Jharkhand v. Tata Cummins Ltd (2006) 4 SCC 57 in dealing with a tax exemption for setting up an industry in a backward area, this Court held as follows: "16. Before analysing the above policy read with the notifications, it is important to bear in mind the connotation of the word "tax". A tax is a payment for raising general revenue. It is a burden. It is based on the principle of ability or capacity to pay. It is a manifestation of the taxing power of the State. An exemption from payment of tax under an enactment is an exemptio....