Custom, Excise & Service Tax Tribunal
Cyber Power System India Pvt Ltd vs Kolkata(Port) on 31 January, 2024
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
REGIONAL BENCH - COURT NO.2
Customs Appeal No. 76683 of 2014
(Arising out of Order-in-Original No. KOL/CUS/Commissioner/55/ADNJ(PORT)/2014
dated: 07.10.2014 passed by Commissioner (Port.), Kolkata.)
M/s. Cyber Power System India,
(Millennium City, Floor. 8E, Tower-II, DN-62, Sector-V, Salt Lake, Kolkata-700 091.)
...Appellant
VERSUS
Commissioner of Customs (Port), Kolkata
(15/1, Strand Road, Kolkata.)
...Respondent
APPERANCE :
Mr. Amit Kumar, Advocate for the Appellant
Mr. Subrata Debnath, Authorized Representative for the Respondent
CORAM:
HON'BLE MR. R. MURALIDHAR MEMBER (JUDICIAL)
HON'BLE MR. RAJEEV TANDON MEMBER (TECHNICAL)
FINAL ORDER No. 75186/2024
DATE OF HEARING : 31.01.2024
DATE OF DECISION : 31.01.2024
PER: RAJEEV TANDON :
The present appeal assails the Order-in-Original No.
Kol/Cus/Commissioner/55/ADJN(PORT)/2014 dated 07.10. 2014 passed
by the learned Commissioner of Customs (Port), Kolkata. The issue
involved revolves on a narrow compass and is concerned with
admissibility of exemption Notification No. 25/2005 Cus- dated
01.03.2005 vide Sl. No. 4 to imports of Home UPS.
2. The facts of the case are that the appellant- importer M/s. Cyber
Power System India Private Limited filed Bill of Entry No. 5295329
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Customs Appeal No. 76683 of 2014
dated 24.04.2014, for clearance of 864 pieces of Home UPS and 3009
Pcs of UPS for Data Processing Equipments and 20 pieces of Charger for
UPS collectively valued at Rs.77,54,295.20/. The imported goods were
self assessed by the importer who claimed benefit of notification
aforesaid for exemption from payment of Basic Customs as Duty in
respect of imported goods "Static Converter for Data Processing
Equipment." The said benefit was however not claimed in respect of
Charger for UPS. The imported goods were assessed provisionally, in
view of related party transactions and due process of law followed
thereto. During the course of examination, the authorities observed that
the Home UPS viz. the goods at Item No. 1 & 2 of the Bill of
Entry/Invoice were nothing but household inverter without battery and
that the said goods were meant to be used for appliances, such as
Tubelight, Energy Saving Lamps, TV etc. In view of the aforesaid, the
department was of the opinion that Item No. 1 & 2 described in the
invoice filed along with the Bills of Entry, as Home UPS were mere
power supply units for Data Processing Equipments and were not
eligible to be treated as "Static Converter for use in Data Processing
Machines," to which the notification applied to.
3. The learned adjudicating authority while discussing the subject
matter notes as under :
"I find that the Bill of Entry No. 5295329 dated 24.04.2014
had been self-assessed by the importers under Section
17(1) of the Customs Act, 1962 and the assessment made
by the importer had been verified on the basis of the
declaration given in the Bill of Entry as well as the import
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documents. The importer declared item no. 1 & 2 of Bill of
Entry as "Home UPS." However, at the time of physical
examination of the goods, the Dock Officers found that the
imported Home UPS are, in fact, household inverters used
for running the home appliances like Energy Saving Lamp,
Tv, etc. instead of being exclusively used for Data
Processing Equipment. This fact is also corroborated by the
catalogue found inside the packages by the Dock Officers.
The Dock Officers also forwarded the representative sample
to Group to take a view in respect of availment of duty
exemption under Notification No. 25/2005, Sl. No. 4. After
examining the representative sample and catalogue, it as
found that in fact the Home UPS are nothing but household
inverters used in running the home appliances like Energy
Saving Lamp, TV, etc."
4. In order to examine the admissibility of the aforesaid Notification
No. 25/2005 Cus. dt. 01.03.2005 it is the necessary that the exact
wording of the notification is gone into. For ready reference. The
relevant portion of the notification reproduced as under :
S. No. Heading, Sub - heading or Description of goods
Tariff item
(1) (2) (3)
1.
--
--
4. 8504 40 Static converters for automatic data processing machines and units thereof, and telecommunication apparatus
33. 4 Customs Appeal No. 76683 of 2014
5. We note that the said notification extends benefit of customs duty exemption to Static Converter for Data Processing Equipment, classifiable under Chapter No. 850440. There is nothing restricting the claim of the said exemption, as long as the imported goods meet the said description. Their duality of use or exclusivity of usage are immaterial. In fact the wordings of the notification do not relate the benefit to any end use of the said goods. All that is mandatory to be eligible to avail of the said duty benefit is the requirement of the product being a "Static Convertor for Data Processing Equipment." There is no end use verification prescribed or required to be satisfied in order to avail of the said duty concession. Further, it is settled law that an exemption notification is to be read into strictly and no word can be added or deleted thereto; there being no room for intendment and regard is to be given to the clear meaning of the words. There are a catena of decisions on the subject and just to place on record following decisions of the apex court are referred to.
(i) Hansraj Gordhandas Vs. NH Dave, Assistant Collector of Central Excise and Customs, Surat & Ors. (AIR-1970 SC 755).
(ii) Commissioner of Sales Tax, UP Vs. Modi Sugar Mills Ltd.
(AIR- 1961 SC- 1047) used.
5.1. The Ld. Commissioner vide his impugned order, while examining the aspect of admissibility of the exemption notification, has gone into the definition of static converters as contained in the HSN. However, it would be noted that the said definition referred to by him is an inclusive definition and it cannot be deemed to impute only those items as 5 Customs Appeal No. 76683 of 2014 contained in the HSN explanation. For ready reference, the said definition is extracted, from the order under reference of the Ld. Commissioner.
"13...................In terms of explanatory notes to Harmonized Commodity, Description and Coding System(HSN), as appliable for goods of CTH 8504, these static converters include rectifiers, inverter, AC converters, DC Converters, Gas Discharge Converters, Electrolytic rectifiers stabilized suppliers (rectifiers combined with regulator) e.g. Uninterrupted Power Supply (UPS) for a range of electronic equipments."
The Ld. Commissioner has interpreted this definition to impute that the Home UPS is "classifiable under CTH 850440, but it does not qualify for exemption under Sl. No. 4 of Notification No. 25/2005Cus as the said static converters are not exclusively for Data Processing Equipment."
6. It is well known that an exemption notification is to be read the way it is worded and no words can be added or deleted therefrom. The adjudicating authority reading the said terminology used in the notification to as to be used "exclusively" (implying solely or only) does not flow from the plain wordings of the exemption notification. We are thus not in agreement with the interpretation rendered the learned Commissioner and to impute malafides into the matter, as we find that the importer has truthfully declared the item contained and for ascertaining the technical parameters, the literature of the goods was 6 Customs Appeal No. 76683 of 2014 also found enclosed. It would be worthwhile to place on record the technical parameters of the imported goods. The same are scanned and reproduced hereunder:
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7. Under the circumstances, we find no merit in denying the exemption benefit referred to supra to the imported goods. Further, in view of our findings that there is nothing amiss in the declaration and nothing has been concealed, we are of the view that the case does not warrant confiscation of the imported goods and imposition of penalties.
8. Under the circumstances, we hold that the impugned goods are eligible for exemption benefits as claimed by the importer/appellant in terms of Notification No. 25/2005 Cus dated 01.03.2005 (vide Sl. No.4) and as referred to in para 4.
9. The order for confiscation of the goods and imposition of penalty is set aside and the appeal filed is allowed with consequential benefits as accrue in law.
(Operative part of the order was pronounced in the open Court) Sd/-
(R. Muralidhar) Member (Judicial) Sd/-
(Rajeev Tandon) Member (Technical) Pinaki