Custom, Excise & Service Tax Tribunal
Greenpanel Industries Ltd vs -Kolkata(Port) on 9 July, 2025
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EASTERN ZONAL BENCH : KOLKATA
REGIONAL BENCH - COURT NO. 1
Customs Appeal No. 75709 of 2018
(Arising out of Order-in-Original No.KOL/CUS/COMMISSIONER/PORT/72/2017 dated
12.12.2017 passed by Commissioner of Customs, Kolkata)
M/s Greenpanel Industries Ltd. : Appellant
(Formerly M/s. Greenply Industries Ltd.)
Makum Road, Tinsukia,Assam-786125.
VERSUS
Commissioner of Customs(Port), : Respondent
15/1, Strand Road, Kolkata-700 001.
APPEARANCE:
S/Shri B.L.Narasimhan, Rahul Tangri, Ms. Taniya Roy, Advocates for the Appellant Shri F.Ahmed, Authorized Representative for the Respondent CORAM:
HON'BLE SHRI ASHOK JINDAL, MEMBER (JUDICIAL) HON'BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL) FINAL ORDER NO. 77120/ 2025 DATE OF HEARING :09.07.2025 DATE OF DECISION:09.07.2025 Order : [Per Shri Ashok Jindal] The appellants are in appeal against the impugned order wherein demand of Rs. 1,95,95,976/- has been raised alongwith interest and equivalent penalty.
2. The facts of the case are that the Appellant is engaged in the business of manufacture of plywood and pre-laminated medium density fiber (MDF) boards. The Appellant has its factories at Rudrapur, Tizit, Bamanbore and Kirparampur.
3. The present dispute pertains to import of certain capital goods made at Kolkata Port for use in the manufacturing unit/factories located at Rudrapur,Tizit and Kirparampur.
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4. During the period 2012-14, the Appellant applied for and received eighteen SHIS (Status Holder Incentive Scheme) scrips under the Foreign Trade Policy (2009-14).
5. The Appellant imported the following goods vide thirteen Bills of Entry by utilizing ten out of eighteen SHIS scrips thereby availing the benefit under Notification No. 104/2009-Cus dated 14.09.2009 as amended by Notification No. 42/2012-Cus dated 22.06.2012.
High Dimension Thickness Sander-used in the Appellant‟s plants for sanding (i.e., brushing bysand paper at high speed in a machine) the plywood to ensure a smooth and uniform level surface. It is a standalone machine performing the desired task.
Fiber Destruction Machine-used for the purpose of undertaking fiber destruction prior to feeding the veneer in the dryer. This machine forms a part of the synchronized operation in the manufacture of plywood. PLC [Programmable Logic Controller] operated core builder-Specific process machine undertaking all in one complete operating process byperforming a host of functions from feeding, tenderizing, thickness detecting, edges cutting, jointing with glue, loading automatically to final leveling stack thereby ensuring the jointing of assorted sized veneer sheets to make a definite sized mat. Glue Spreader -Standalone machine operating in a synchronized manner for ply manufacturing. These are machines equipped with high quality rubber glue rollers which are 3 Appeal No.: C/75709/2018-DB used to lay an even spread of adhesive to one or both sides of the veneer so that the same can stick rigidly and precisely.
Steel Caul Plates/ Stainless Steel Press Plates- These plates have either been imported - i. as an integral part of a short cycle press line, wherein the entire line was being imported by the Appellant in parts, being bulky. In this case, the short cycle press line has been allowed clearance under SHIS scrip, but not the plates, which have to be imported separately from different vendor basis the drawing/ designs of the vendor selling the short cycle press line.
-or-
ii. separately to produce high pressure
laminates of varying textured
finishes/designs depending on the need of the market-These plates were imported to produce better and different varieties of laminates that the earlier plates were not capable of undertaking. Thus, this piece of equipment was used for modernization/technical upgradation/ expansion of the existing line of laminates could be produced.
Aligner System and Circular Saw Blades- these are equipments or sub-assembly of a larger laminated wood floor plank manufacturing line. These are considered as an integral part of the overall manufacturing line, which has also been imported under the SHIS scrip. The other machinery imported for larger laminated wood 4 Appeal No.: C/75709/2018-DB floor plank manufacturing line has been allowed clearance under the SHIS scrips.
Cross Correction Module, Fan Wheel Driver and
Rotor for Chipper - These
areessentialequipment forming part of the
manufacturing line, which were either
upgraded or replaced in place of the old equipment so as to enhance production facility.Thus, they play a vital role in upgrading, replacing ormodernizing or expanding the production line to achieve the optimum manufacture.
6. During the month of May 2015, the office of the Directorate of Revenue Intelligence, Kolkata Zonal Unit (DRI) commenced an enquiry against the import of goods and subsequent availment of benefit of Notification No. 104/2009-Cus.
7. During the enquiry the DRI recorded statements of the officials of the Appellant.
8. After completion of the enquiry, a Show Cause Notice (hereinafter referred to as „SCN‟) dated 04.01.2016 was issued by the DRI proposing to deny the benefit of the exemption notification for the following reasons:
i. from the description of the goods imported, read with the customs tariff heading and the definition of capital goods/spare/parts/components under Chapter 9 of the Foreign Trade Policy/Notification No. 104/2009-Cus., none of the impugned goods appear to qualify as capital goods. Rather they appear to be spares/parts/components of capital goods;5
Appeal No.: C/75709/2018-DB ii. the impugned goods were also not pertaining to any of the capital goods which were imported under the SHIS scrips earlier;
iii. SHIS licenses were used for debit of duty
against import of goods namely
spares/parts/components of capital goods in excess of permissible limit of 10% value of the scrip; and iv. no bonds were furnished for actual user condition at the time of import of the impugned goods.
9. The Appellant filed a detailed reply vide a letter dated 13.12.2016 rebutting all the allegations raised in the SCN. However, without considering the submissions made in the detailed reply, the Ld. Commissioner passed the Order-in-Original dated 12.12.2017 (hereinafter referred to as the „impugned order‟) thereby confirming the demand in its entirety by denying the benefit sought to be taken by the Appellant under Notification No.104/2009-Cus.
However, since the offending goods were not physically available on account of the same being cleared by the Appellant, the Ld. Commissioner refrained from confiscating the same.
10. Being aggrieved by the impugned order, the Appellant has preferred the instant appeal.
11. The Ld. Counsel for the appellant submits that the goods imported by the appellant are "Capital Goods" and therefore there is no violation of the conditions of Notification No. 104/2009-CUS dated 14.9.2009.
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12. He also refers definition of "Capital Goods" as given in the explanation to the Notification No. 104/2009-Customs dated 14.09.2009 is extracted hereunder for the purpose of reference:
"„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."
13. It is submitted that Notification No. 104/2009- Cus dated 14.09.2009, permits an importer to import any capital goods, by claiming benefit under the SHIS scheme.
14. It is further submitted that the definition of capital goods under the said Notification is wide enough to include the disputed goods, in the instant case. As explained in the factual position above, along with the detailed product operational and technical literature, the disputed goods are either 7 Appeal No.: C/75709/2018-DB standalone machines having an independent function, orintegral components of a larger system, or are items required for replacement, modernization, technological upgradation or expansion of the plant.
15. He further submits that from a bare perusal of the facts read with relevant technical documents, it emerges that:
The High Dimension Thickness Sander, Fiber Destruction Machine, PLC [Programmable Logic Controller] operated core builder and Glue Spreader are stand- alone machines having independent function.
Steel Caul Plates/ Stainless Steel Press Plates, Aligner System and Circular Saw Blades have been imported along with the machine lines of which they are integral parts, but vide separate bills of entry since the machines lines are bulky.
Cross Correction Modules, Fan Wheel Drivers and Rotor for Chippers are equipments, which are used for the replacement, modernization etc. of the components/ assemblies of existing fully automatic press line, chipper machines installed in the factory.
16. Therefore, the subject goods would qualify under the definition of capital goods themselves and not as parts/spares/components of capital goods.
17. He also relied on M/s La Opala RG Limited v. Commissioner of Customs (Port) Kolkata, 2025-VIL-715-CESTAT-KOL-CU, wherein this 8 Appeal No.: C/75709/2018-DB Tribunal, after perusing the functions of the items imported by the Appellant held that the imported items had a specific function which were essential and they also aided in the manufacture of glassware by the Appellant. Thus, it was observed that the goods duly satisfied the requirement of being an "accessory" or "equipment" as mentioned in the definition of „capital goods‟ under Notification No. 104/2009-Cus dated 14.09.2009.
18. Furthermore, it is submitted that this Tribunal in Comm. of Customs (Port), Kolkata vs. M/s. Cosmic Ferro Alloys Limited, 2024-TIOL-963- CESTAT-KOLheld that the that the definition of "Capital Goods" in the Notification is wide enough to cover spares and parts of capital goods as capital goods itself.
19. Without prejudice, the appellant was permitted to classify the disputed goods as „Capital Goods‟ under the EPCG Scheme therefore, the department cannot alternatively deny exemption under this scheme.
A.1 It is submitted that the definition of "Capital Goods" in the Notification No. 104/2009- Customs dated 14.09.2009 has been adopted from Para 3.16.3 read with Para 9.12 of the Foreign Trade Policy (FTP 2009-14). This definition of "Capital Goods" is same for the EPCG Scheme under Chapter 5 of the FTP. A.2 It is pertinent to note herein that the Appellant has been permitted by the department to classify the subject goods, viz. Stainless Steel Press Plates as "Capital Goods" under the EPCG Scheme vide the Bill of Entry No. 8779293 dated 08.11.2018. It is submitted that once the department is permitting the 9 Appeal No.: C/75709/2018-DB Appellant to classify the disputed goods as "Capital Goods" under one scheme, it cannot classify the same item as "Parts/Spares/Components" under another scheme. In this regard reliance is placed on the following rulings:
i) M/s. Jindal Stainless Limited v.
Commissioner of Customs (Port), Kolkata, 2024-TIOL-1213-Cestat-Kol.
ii) Commissioner of Customs, Chennai vs. JSW Steel Ltd. 2016 (340) ELT 262 (Tri-Chennai)
iii) M/s. Rayalseema Hi-Strength Hypo Ltd.
vs. Comm. Of Cus, Chennai, 2016 (333) ELT 360, (Tri-Chennai)
20. In light of the above, it is submitted that the department cannot take contrary stand for 2 different exemption schemes flowing out from the same policy. Hence, the impugned order is required to be set aside.
21. The demand cannot be confirmed based on the statements made under Section 108 of the Customs Act without any other substantive evidence.
22. It is submitted that the Ld. Commissioner has solely relied on the statement of Mr. Vinod Agarwal- General Manager (Imports), which was recorded in terms of Section 108 of the Customs Act. The impugned order does not rely on or provide any other substantive evidence to corroborate the statement made by the concerned person. It is submitted that the department has failed to adduce any other documentary evidence to contradict the claim of the Appellant, to avail the benefit under the SHIS scheme.
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23. It is submitted that it is a settled principle of law that the statements made by any person under Section 108 of the Customs Act does have evidentiary value, however, the same is required to be corroborated with additional substantive evidence, to confirm demand of duty. In this regard, he relied on the following decisions:
i. M/s Krishna Impex International v. Commissioner of Customs (ICD), New Delhi, 2025-TIOL-926-CESTAT-DEL ii. Azizur Rahman v. Commissioner of Customs, 2012 (285) E.L.T. 401 (Tri. Kolkata) iii. Sanjay Kumar Agarwal v. Commissioner of Customs, 2016 (331) ELT 81 (Tri.-Mum)
24. He also contended that extended period of limitation cannot be invoked in the present case.
25. He submits that the disputed goods in the present case were imported during the period July 2013 to December 2014, whereas the SCN was issued to the Appellant only on 04.01.2016, hence, the demand is entirely time barred. The demand has been confirmed by invoking extended period of limitation under Section 28(4) on the ground that the Appellant had supressed facts. The Appellant humbly submits that extended period of limitation is not invokable in the present case inasmuch as there is no suppression on the part of the Appellant.
26. It is submitted that the description and classification of disputed goods has been recorded and stated in the bills of entry, commercial invoices and all other such relevant documents submitted during the time of import. The custom officials had conducted a detailed examination on all the imports and then finalized the bills of entry. It is submitted that the custom officials were aware of the nature of 11 Appeal No.: C/75709/2018-DB the disputed goods and thereafter allowed the Appellant to import such items. Therefore, there arises no question of suppression where the department is aware of all the facts.
27. It is the submission of the Appellant that in the absence of any conscious or intentional act of collusion, wilful mis-statement or suppression of fact, on the part of the importer, the extended period of limitation cannot be invoked. He also relied on the case of Commissioner of Customs v. Magus Metals Pvt. Ltd., 2017 (355) E.L.T. 323 (SC).
28. Further, the department vide the impugned order has not provided any substantive evidence to prove that the Appellant had wilfully misstated or concealed facts with the intention to deny payment of duty and had merely confirmed the demand on the basis of the statement made by one Mr. Agarwal. Thus, in the absence of any positive act of suppression on the part of the Appellant, the extended period cannot be invoked in the instant case. The same has been held by the Hon‟ble Supreme Court in i. Continental Foundation Joint Venture v. Commissioner of Excise, 2007 (216) E.L.T. 177 (SC).
ii. International Merchandising Company LLC v. Comm of Service Tax, New Delhi, (2022) 1 Centax 31 (SC), iii. Commissioner vs. Nizamsingh Chauhan, 2017 (6) GSTL J107 (MP)
29. Thus, the impugned order confirming demand under Section 28(4) of the Customs Act, 1962 is liable to be set 12 Appeal No.: C/75709/2018-DB aside. Since the demand itself is not sustainable, consequent interest and penalty is not imposable.
30. We find that in this case the appellant has imported the following goods description there are as under:
(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 upgradation 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. "
31. And at the time of clearance of the goods the goods were examined and allowed to be cleared as "capital goods". These facts are not in dispute. Now case of the Revenue is that these are not "capital goods" but are spares/ parts of components of "capital goods". Therefore, appellant is not entitled to claim benefit under Notification No. 104/2009- Customs dated 14.09.2009 as amended by Notification No. 42/2012 -Cus dated 22.06.2012. As per Notification No. 104/2009 Customs ibid the "capital goods" means any plant, machinery, equipment or accessories required for manufacture or production, either directly or indirectly of goods or 13 Appeal No.: C/75709/2018-DB for rendering services including those required for replacement, modernization, technological upgradation or expansion. It also includes packing 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. The definition of capital goods is so wide, it includes all components which are used for manufacturing or production or providing service all types of goods. In that circumstances it could not be said that the goods in question which are having distinct and separate usage thereof for use in manufacturing in their final product cannot be said as parts, spares, components of capital goods. Infact these goods itself qualifies as capital goods. Therefore, relying on the decision of M/s. Cosmic Ferro Alloys Limited (Supra) we hold that these are capital goods only.
32. In view of this we hold that appellant is entitled for benefit of notification no. 104/2009 Customs dated 14.09.2009 as amended by notification no. 42/2012 Customs dated 22.06.2012.
33. In view of this we hold that demand against the appellant is not sustainable. Therefore, 14 Appeal No.: C/75709/2018-DB impugned order is set aside and appeal is allowed with consequential relief, if any.
(Operative part of the order was pronounced in open court) (ASHOK JINDAL) MEMBER (JUDICIAL) (K. ANPAZHAKAN) MEMBER (TECHNICAL) RG