Custom, Excise & Service Tax Tribunal
Cc (Airport), Chennai vs M/S. Dornier India Medical Systems (P) ... on 26 September, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
C/732/2004
(Arising out of Order-in-Appeal C.Cus. No. 60/2004 dated 30.01.2004, passed by the Commissioner of Customs (Appeals), Chennai).
For approval and signature
Honble Shri P.K. DAS, Judicial Member
Honble Shri R. PERIASAMI, Technical Member
_______________________________________________________
1. Whether Press Reporters may be allowed to see the : No
order for Publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether the Honble Member wishes to see the fair : Seen
copy of the Order.
4. Whether order is to be circulated to the : Yes
Departmental Authorities? ______________________________________________________
CC (Airport), Chennai : Appellant
Vs.
M/s. Dornier India Medical Systems (P) Ltd. : Respondent
Appearance Shri Parmod Kumar, JC (AR) for the appellant None for the respondent CORAM Honble Shri P.K. DAS, Judicial Member Honble Shri R. PERIASAMI, Technical Member Date of Hearing : 25.09.2014 Date of Decision: 25.09.2014 FINAL ORDER No. 40662/2014 Per: P.K. Das, None appears on behalf of the respondent. There is no application for adjournment.
2. On perusal of the records, we find that the matter was adjourned on earlier occasions and nobody turned up on behalf of the respondent. As the matter is old one, we take up the appeals for hearing.
3. After hearing the Ld. AR on behalf of the Revenue and on perusal of the records, we find that the respondents imported two units of Extracorporal Lithotripter and filed two Bills of Entry No. 12788 and 12789 both dated 03.06.2000. The respondent classified the goods under Customs Tariff Heading No. 9018.19 and produced two DEPB scrips bearing Nos. 0710003842 dated 26.04.2000 and 041001088 dated 31.08.99, in accordance with Customs Notification No. 34/97. In the mean time, DGFT issued Public Notice No. 6(RE 2000)/1997-2002 dated 07.04.2000. In terms of the said Public Notice, Para 7.36B of the Procedure was amended to be read as the credit under DEPB may be utilized for payment of customs duty on any item which is freely importable, except capital goods. A demand notice for the duty was raised to the Respondent for an amount of Rs. 14,80,929/- as per the DGFT Public Notice dated 07.04.2000, which prohibits import of capital goods under DEPB scheme.
4. The Adjudicating Authority dropped the demand. It has been held that the imported items are not capital goods. The Revenue filed the appeal before the Commissioner (Appeals). By the impugned order, the Commissioner (Appeals) held that the impugned goods are capital goods, and the respondent is eligible for the benefit of DEPB scrips dated 31.08.99, which was issued prior to the Public Notice. But, the DEPB scrips dated 26.04.2000, produced by the respondent was disallowed as it was issued after Public Notice dated 07.04.2000. The Revenue filed this appeal against the order of Commissioner (Appeal) in so far as admissibility of DEPB scrips dated 31.08.99.
5. The Ld. AR on behalf of the Revenue submits that the Public Notice dated 07.04.2000, allowed the utilization of the credit under DEPB Scheme for payment of Customs duty for any item, which is freely imported except capital goods. In the present case, the Commissioner (Appeals) observed that the imported goods are capital goods. It is submitted that the revenue was in appeal against the Order of the Commissioner (Appeals), in so far as the applicability of Public Notice dated 07.04.2000 in respect of DEPB Scrips issued prior to Public Notice. He relied upon the decision of the Honble Madras High Court in the case of Sai Graphic Systems Vs. CC (Seaport-Import), Chennai 2013 (289) ELT 423 (Mad.). For the proper appreciation of the case, we reproduce below the relevant portion of the Public Notice dated 07.04.2000:-
5. Paragraph 7.36B shall be amended to read as under:-
The credit under DEPB may be utilized for payment of Customs duty on any item which is freely importable, except capital goods.
6. On a plain reading of the above Public Notice, it is clear that the payment of customs duty by utilizing the credit under DEPB cannot be utilized as capital goods imported after 07.04.2000. In the present case, we find that the Bills of Entry were filed on 03.06.2000, ie., after the Public Notice dated 07.04.2000. The respondent instead of paying the duty amount in cash, they produced two DEPB scrips dated 26.04.2000 and 31.08.1999, for value of capital goods. The duty amount was debited from the DEPB scrips. We find that there is no dispute that the goods in question are capital goods as held by the Commissioner (Appeals), which was not challenged by the respondent. The Public Notice had clearly imposed restriction of DEPB scrips for payment of customs duty from 07.04.2000, on capital goods. In the case of Sai Graphic Systems (supra), the Honble High Court of Madras observed that after the Public Notice, all the clearances would be treated as restricted capital goods as per the Public Notice. The relevant portion of the said decision is reproduced as under:-
2. In all the writ petitions, the petitioners had imported the second hand Digital Multifunction Print and Copying Machines of various models from their overseas suppliers. The petitioners had filed Bill of Entry and sought for clearance of the goods as Second Hand Capital goods under Free importability in terms of Definitions in Para 9.12 of Foreign Trade Policy and Hand Book of Procedures 2009-2014. Further, the petitioners engaged Chartered Engineer as per the Standing Order and in certain cases, examination was done and report was forwarded to the Custom House, Chennai confirming that the quantities and models declared was in conformity with the declarations and documents filed along with Bill of Entry. However, in certain cases, the respondents had not initiated any action in respect of examination of the goods. Further, in both the cases, despite the petitioners approaching the respondents seeking clearance of goods under Free importability, no action was taken by the respondents for early clearance of the goods. Aggrieved by the same, the petitioners have come up before this Court with the above writ petitions.
7. After considering the facts and the decision of the Honble Madras High Court, we are of the view that after the Public Notice dated 07.04.2000, the respondent is not eligible to pay the customs duty by utilizing the DEPB Scrips on the clearance of capital goods. According, we allow the appeal filed by the Revenue.
(Order pronounced and dictated in the open Court)
(R. PERIASAMI) (P.K. DAS)
TECHNICAL MEMBER JUDICIAL MEMBER
BB
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