Custom, Excise & Service Tax Tribunal
M/S. Bharat Earth Movers Ltd. (Beml) vs Cc, Sea Port (Export), Chennai on 26 November, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
C/388/2006
(Arising out of Order in Appeal No. C.Cus.504/06 dated 11.07.2006, passed by the Commissioner of Customs (Appeals), Chennai).
For approval and signature
Honble Ms. JYOTI BALASUNDARAM, Vice President
Honble Dr. CHITTARANJAN SATAPATHY, Technical Member
_________________________________________________________
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M/s. Bharat Earth Movers Ltd. (BEML) : Appellant
Vs.
CC, Sea Port (Export), Chennai : Respondent
Appearance Shri K.S. Venkatagiri, Adv., for the appellant Shri T.H. Rao, SDR, for the respondent CORAM Ms. JYOTI BALASUNDARAM, Vice President Dr. CHITTARANJAN SATAPATHY, Technical Member Date of hearing : 26.11.2009 Date of decision : 26.11.2009 Final ORDER No._____________ Per: Dr. Chittaranjan Satapathy Heard both sides. Shri K.S. Venkatagiri, Ld. Advocate, appearing for the appellants states that the appellants a Public Sector Undertaking (PSU) had imported the impugned goods for manufacture of Dumpers to be exported to Jordan under the Advance Licence Scheme, availing customs duty exemption under the Notification No. 204/92-Cus. dated 19.05.1992. However, on account of the Gulf war, the appellants were not able to fulfill the export obligation and they have used the impugned goods for manufacture of dumpers, which have been cleared for home consumption. The appellants have paid the duty and interest @ 24% in terms of the bond executed by them. It is the case of the appellants that non-fulfillment of export obligation entails payment of duty at the normal rates which is applicable otherwise. The Ld. Advocate states that the appellants are otherwise eligible for the concessional duty under exemption Notification No. 72/93-Cus dated 28.2.93. He further states that the said notification had some conditions attached merely relevant to the actual use which were in any case similar to the conditions under the notification No. 204/92-Cus. dated 19.05.1992, under which the goods were initially imported. He submits that the benefit of Notification No.72/93-Cus dated 28.2.93, may be allowed to the appellants and in view of the Exim Policy provisions of interest vide Public Notice No.09 dated 22.5.03, only 15% interest should be charged.
2. Shri T.H. Rao, Ld. SDR, appearing for the department states that the appellants brought it to the notice of the department only after eight years that they have not fulfilled the export obligation, the notification No. 72/93 dated 28.2.93, was no longer in force at that point of time and the conditions attached to the said notification are quite different from the conditions under Notification No. 204/92-Cus. dated 19.05.1992. He specifically states that the notification benefit now claimed requires certification by the jurisdictional Assistant Commissioner recording usage of the imported materials by the original importers of motor vehicles. He also points out that the authorities below have given a finding that the impugned goods were not provisionally assessed and the same cannot be re-assessed.
3. After hearing arguments from both sides and perusal of case records, we find that the appellants are a PSU and for genuine reasons they could not fulfill the export obligations under circumstances beyond their control. There is no allegation that they have not accounted for the imported raw materials or that they have not used the same in the manufacture of dumpers, which have been sold domestically. The appellants are definitely not entitled to the benefit of notification No. 72/93, since they have not fulfilled the export obligation. But, it is now settled law that while demanding duty for failure of a past import condition, duty rate is applicable on the date of import has to be charged. However, the applicable duty rate has to be determined taking into account any other exemption notification in force on the date of clearance. It goes without saying that if such notifications have any condition, the same have to be followed. We have perused the conditions attached to the notification No. 72/93. On the findings of records and the findings of the authorities below, it is evident that in this case, the appellant PSU has used the imported materials for the manufacture of dumpers in their factory and since the actual use in the manufacture of original equipment is satisfied in this case, we are of the view that the appellants can be extended the benefit of the exemption under Notification No. 72/93, as claimed by them. As regards the interest, the appellants are required to pay the same from the date of clearance till the date of payment of duty in terms of the bond executed by them. However, taking note of the fact that the interest rates have been subsequently reduced to 15% under the Exim Policy and the same is applicable to the pending cases, we order calculation of interest @15% in this case also. Accordingly, we set aside the impugned order and allow the appeal by extending the benefit of Notification No. 72/93 to the appellants PSU and also allow their prayer for calculation of interest @15%. For the limited purpose of calculating the duty amount and the interest amount, the matter is remitted to the original authority.
4. The appeal is allowed in the above terms.
(Order dictated and pronounced in the open Court)
(Dr. CHITTARANJAN SATAPATHY) (JYOTI BALASUNDARAM)
TECHNICAL MEMBER VICE PRESIDENT
BB
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