TaxTMI 
TaxTMI 
2026 (8) TMI 431
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....corresponding to nine Bills of Entry, concerning certain imported goods, such as "Whims Bottom Parts", "Driving Wheels", "Gaskets" and "Spare Parts for Coke Oven Plant". 2. The facts of the case are that the appellant, namely, M/s. Usha Martin Limited, is engaged, inter alia, in the manufacture of iron and steel products including steel wire ropes, steel wires and allied products. During the Financial Years 2010-11 to 201213, the appellant exported goods worth Rs. 13,15,84,13,708/-. Since the appellant was accorded the status of Trading House, the appellant duly applied for SHIS as specified under Chapter 3 of FTP 2009-14 in form ANF 3E with the Jurisdictional / Regional Authority. The appellant was granted SHIS Scrips @1% of the FOB Value of the exports (i.e. Rs. 13,15,84,136/-) in terms of Para 3.16.1 of the FTP 2009-14, which were split into 18 certificates at the request of the appellant. Further, the appellant purchased 2 SHIS Certificates bearing no. 0310713657 and 0310713796 from M/s. UM Cables Ltd involving duty credit of Rs. 26,17,861/- and 16,16,952/- respectively. 2.1. It is borne out from the records that during the relevant period, the appellant effected imports ....
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....el Melting Shop 40169340 1,01,056 Total 1,01,056 SHIS Certificate No. 0210174638 dated 29-02-12 Bill of Entry No. Item Description Area where utilised Tariff Heading Duty Debit through SHIS Certificate 3651049 dt 28-10- 13 Top Bush J5832.04.01.02 Setting up Coke Oven Plant 40169960 45,001 Main Spring J5802.04.04.05 73209090 8,308 Quenching Spray Pipe 73269099 2,55,470 Driven Wheel For Pusher Car 84179000 26,18,660 Gear Reducer For Pusher Car 84834000 4,29,458 Coupler 84836090 5,35,865 3716641 dated 05- 11-13 Water Cooled Cable (AC21/113198/8500 ) Modernisation of Arc Furnace 85444292 4,22,551 Total 43,15,313 SHIS Certificate No. 0310713657 dated 29-10-12 Bill of Entry No. Item Description Area where utilised Tariff Heading Duty Debit through SHIS Certificate 3307184 dt 18-09- 13 Whims Bottom Part Setting up of Pellet Plant 84749000 26,17,861 Total 26,17,861 SHIS Certificate No. 0310713796 dated 30-10-12 Bill of Entry No. Item Description Area where utilised Tariff Heading Duty ....
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....utilising, wholly or partly, 7 SHIS certificates, such as "Whims Bottom Parts", "Driving Wheels", "Gaskets" and "Spare Parts of Coke Oven Plant" (hereinafter referred to as "subject goods") classifiable under CTH 84749000, 40169340 and 84179000 were neither related to capital goods imported earlier nor satisfied the conditions stipulated under Notification No. 104/2009-Cus. It was further alleged that the appellant had debited customs duty in excess of the permissible limit of 10% of the value of the original SHIS scrip, thereby contravening Paragraph 3.16.3 of the Foreign Trade Policy, 2009-14 as well as Conditions 4(i) and 4(iii) of Notification No. 104/2009Cus., as amended. On the aforesaid basis, Customs duty amounting to Rs. 1,30,06,857/- was proposed to be recovered under Section 28(4) of the Customs Act, 1962, together with interest under Section 28AA, equivalent penalty under Section 114A; confiscation of the impugned goods under Section 111(o) of the Act was also proposed. 5.1. The appellant duly replied to and rebutted all the allegations made in the Notice vide its letter dated 05.01.2017 and appeared for personal hearing on 25.08.2017 wherein it tendered written subm....
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....quipment or accessories which are directly or indirectly required in the manufacturing or production process, including those required for replacement, modernization, technological upgradation or expansion. By virtue of the expression 'accessories', the definition of capital goods has been further enlarged to even include parts, sub-assembly or assembly which contributes to efficiency or effectiveness of a piece of equipment without changing its basic functions. Reference in this regard is invited to judgment of this Tribunal in the case of CC (Port) vs M/s Cosmic Ferro Alloys Limited [2024 (8) TMI 674] has observed at para 11.2 and 11.3 that the definition of capital goods is wide enough to include 'spares/part of capital goods' and the restriction of 10% is only with respect to import of components, spares/parts of capital goods imported earlier. It is humbly submitted that such an interpretation advances the objective of SHIS Scheme as discernible from para 3.16.1 of FTP 2009-14 i.e. promote investment in upgradation of technology in as much as a contrary view would lead to absurdity and would imply that while import of components, spares/parts of capital goods imported earlier ....
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....rs, respectively. Therefore, applying the ratio of judgment of this Hon'ble Tribunal in the case of Cosmic Ferro Alloys Limited (supra), it is submitted that the goods imported by the Appellant would be eligible for benefit of exemption under Notification No. 104/2009. (vii) In so far as 10% restriction is concerned, the same applies only to the import of components/spares of capital goods imported earlier, and not to fresh import of capital goods (including accessories) by utilising SHIS. It is an admitted fact that the goods imported by the Appellant did not pertain to capital goods imported earlier and therefore, there is no violation of Notification No. 104/2009. (viii) Notwithstanding the above and in any event, the goods under dispute would be covered by the expression accessories. The impugned order at para 16 has allegedly observed that the items imported by the Appellant do not have any independent and individual function. The said observation further bolsters the contention of the Appellant that items imported by the Appellant were in the nature of accessories in as much as the same contributed to efficiency or effectiveness of the various plants/machine....
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....d period and imposing penalty under Section 114A of the Act is not permissible in law. The expression "suppression" implies a deliberate failure to disclose information which one is legally required to furnish, and the burden to establish such mala fide intent lies upon the Department, as held by the Hon'ble Supreme Court in the case of Uniworth Textiles Ltd. v. CCE [2013 (288) ELT 161] (iii) In the facts of the present case, the impugned order observes at para 43 that the Appellant itself declared the goods imported by it as parts and spares. Moreover, the SHIS Scrips were duly presented to the Customs officer at the time of import as required in terms of condition no. 3 appended to Notification No. 104/2009. In spite thereof, the impugned order alleges that the Appellant suppressed the actual nature of goods imported. (iv) Thus, it is quite evident that the allegation of suppression is wholly unsustainable in as much as the Revenue was in complete know of things and thus the Revenue has failed to discharge its burden. D. Impugned Order is bad in law and ex-facie illegal in so far as the show cause notice has not been adjudicated within the time limit pr....
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.... plant or machinery to qualify for benefit of Exemption Notification No. 104/2009 (i) Exemption Notification No. 104/2009 nowhere stipulates that accessories have to be imported along with the plant or machinery to which they pertain. The only exception pertains to components/spares of earlier imported capital goods, which is not the case in the instant matter. If the contention of Revenue were to be accepted, it would lead to absurd results and defeat the very objective of the SHIS Scheme, i.e., promoting technological upgradation. It cannot be the legislative intent to allow import of capital goods only in single consignments while denying the benefit for larger capital goods imported in multiple consignments. Reliance in this regard is placed on the judgment of CESTAT Chennai in the case of CC, Chennai Vs. M/s. JSW Steel Ltd. [2016 (340) E.L.T. 262 (Tri. - Chennai)]. H. The Appellant was not required to furnish any undertaking as stipulated in terms of Condition 5A of Notification No. 104/2009 (i) It has been alleged in the impugned order that the Appellant did not furnish the undertaking as stipulated in terms of Condition 5A of the Notification No. 1....
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....anation has been provided, which defines "capital goods" as under: - "Explanation, - For the purposes of this notification,- (i) "Capital goods" means any plant, machinery, equipment or accessories required for manufacture or production, either directly or indirectly, of goods or for rendering services, including those required for replacement, modernization, technological up gradation or expansion. It also includes packaging machinery and equipment, refractories for initial lining, refrigeration equipment, power generating sets, machine tools, catalysts for initial charge, equipment and instruments for testing, research and development, quality and pollution control. Capital goods may be for use in manufacturing, mining, agriculture, aquaculture, animal husbandry, floriculture, horticulture, pisciculture, poultry, sericulture and viticulture as well as for use in services sector." 10.1. On going through the said definition, we find that the same covers all the items in question being accessories required for modernization of the plant of the appellant. 11. It is a fact that the appellant has utilized their Status Holder Incentive Scrips (SHIS) for import of....
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....2020. In that view office related furniture/equipment indeed formed part of the said complete plant. Since the said goods formed part of the complete plant and since there is no dispute as to use of the said goods for manufacture or production of stainless steel tubes; it follows that such goods are definitely required directly or indirectly for or in relation to manufacture or production of goods. 7. In this regard, it would be useful to refer to the definition of capital goods as provided in para. 9.08 of Foreign Trade Policy which is reproduced as under: "Capital Goods" means any plant, machinery, equipment or accessories required for manufacture or production, either directly or indirectly, of goods or for rendering services, including those required for replacement, modernisation, technological up-gradation or expansion. It includes packaging machinery and equipment, refrigeration equipment, power generating sets, machine tools, equipment and instruments for testing, research and development, quality and pollution control Capital goods may be for use in manufacturing, mining, agriculture, aquaculture, animal husbandry, floriculture, horticulture, pis....
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....e for the benefit of the Notification No. 104/2009-Customs dated 14-09-2009, amended by Notification No. 42/2012-Customs dated 22-062012. 11.1. From the impugned order, we observe that the importer has debited the duty payable for the goods imported, from 3 (three) Status Holder Incentive Scrips (SHIS) and availed the benefit of the Notification No. 104/2009-Customs dated 14-092009, as amended. However, Revenue alleged that the Respondent is not entitled for the benefit of the said Notification as they failed to comply with the conditions laid down in the said Notification. The allegation of the Revenue is that the imports are neither related to 'Capital goods imported earlier' nor are 'Capital goods' themselves. and hence cannot be imported under SHIS license by claiming the benefit of exemption given by the said Notification ibid 11.2. We observe that the goods imported are squarely fitting within the definition of 'Capital Goods' as defined in the FTP (2009-14) and Notification104/2009-Customs dated 14-09-2009, as amended. We observe that the definition of 'Capital Goods' is wide enough to cover the imported 'spares/parts of ....