Custom, Excise & Service Tax Tribunal
Condor Footwear I Ltd vs Ahmedabad on 25 April, 2019
Customs, Excise & Service Tax Appellate Tribunal,
West Zonal Bench : Ahmedabad - 380 004
REGIONAL BENCH - COURT NO. 3
Customs Appeal No. 452 of 2009
[Arising out of Order-in-Appeal No OIA-163-164-2009-CUS-COMMR-A-AHD dated
27.07.2009 passed by Commissioner of Customs, Ahmedabad]
M/s. Condor Footwear (I) Limited .... Appellant
A-I, 3503-04, Main Road 03,
Sub Road 35, Behind Dev Rekha, GIDC, Sachin,
SURAT, GUJARAT
VERSUS
Commissioner of Customs .... Respondent
CUSTOM HOUSE, Near All India Radio Navrangpura, Ahmedabad, Gujarat WITH Customs Appeal No. 453 of 2009 [Arising out of Order-in-Appeal No OIA-163-164-2009-CUS-COMMR-A-AHD dated 27.07.2009 passed by Commissioner of Customs, Ahmedabad] M/s. Condor Footwear (I) Limited .... Appellant A-I, 3503-04, Main Road 03, Sub Road 35, Behind Dev Rekha, GIDC, Sachin, SURAT, GUJARAT VERSUS Commissioner of Customs .... Respondent CUSTOM HOUSE, Near All India Radio Navrangpura, Ahmedabad, Gujarat APPEARANCE :
Shri S. Suriyanarayanan, Advocate for the Appellant Shri S.N. Gohil, Superintendent (AR) for the Respondent CORAM: HON'BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) HON'BLE MR. RAJU, MEMBER (TECHNICAL) 2 FINAL ORDER NO. A/10707-10708 / 2019 DATE OF HEARING : 08.04.2019 DATE OF DECISION: 25.04.2019 RAJU These appeals have been filed by M/s. Condor Footwear (I) Limited against the order of Commissioner (Appeals) denying the benefit of Notification No. 93/2004-Cus dated 10.09.2004 for import of goods.
2. Ld. Counsel for the appellant pointed out that they had obtained license from DGFT for import of material under Notification No. 93/2004-Cus. The exemption was sought to be availed for import of relevant synthetic cloth for manufacture and export of synthetic slippers/ sandals with PU sole under SION norms A3541. SION norm A3541 permitted import of various items including relevant cloth for insole (non-woven/woven/ knitted/laminated with PVC/PU), 1.02 sq. meter/sq. meter content in export for manufacture and export of one pair of synthetic slipper/ sandals with PU sole of all sorts. The license obtained by the appellant against the entry 'relevant synthetic cloth for uppers (non-woven)/ knitted / laminated with PVC/PU' prescribed ITCHS Code 59031090 at serial No. 7 of the DES import item list attached to license issued by DGFT. On import of goods, the Revenue took samples of the product and sent it to chemical examiner. The report of the chemical examiner described the goods as black colored sheet composed of non-woven polyester fabrics sandwiched between compounded PVC layer and PVC film containing 9.3% of non woven 3 polyester fabrics and balance PVC which according to the examiner met the requirement of goods falling in CTH 39 of the Customs Tariff Act. The Revenue sought to classify the goods under heading 39204900. Revenue alleges that the license issued to the appellant permitted import of only goods falling under heading 59031090 whereas the goods imported by the appellant were classifiable under heading 39204900. The Revenue sought to deny the benefit of exemption notification on the ground that the goods imported by the appellant are not covered by heading prescribed in the license. The appellant thereafter approached to DGFT authorities and the license was amended and Chapter heading 39204900 was included against the said entry in the license. The impugned order held that the amendment in the said license is not retrospective. It was held that that no retrospective amendment in the license is permissible after import of the goods. He relied upon the decision of the Tribunal in the case of Square D. Textiles Exports Limited vs. CC, Trichy - 2003 (160) ELT 246 (Tri. Chennai) and the decision of Hon'ble High Court of Punjab & Haryana in the case of Vikrant Overseas vs. UOI - 200 (123) ELT 486 (P&H) to hold that said amendment cannot be given retrospective effect and the benefit of notification is denied to the appellant.
3. Ld. Counsel for the appellant pointed out that SION norms did not prescribe any heading or sub-heading of the Customs Tariff Act and the imports are permissible as per description given in SION norms. He argued that the description of the goods imported is 4 covered in the description in SION norms and therefore benefit should not be denied.
4. Ld. AR relies on the impugned order.
5. We have gone through the rival submissions. We find that appellants are holder of license issued for availment of benefit under Notification No. 93/2004-Cus. It is not disputed that the description in the SION norms covers the goods imported by the appellant.
However, the Revenue is of the view that the goods are classifiable under Chapter heading 39204900 as against the heading 59031090 mentioned in the license. Though the license has been amended, the Revenue rejected the amendment on the ground that such amendments did not have retrospective effect. The Revenue has relied on the decision of the Tribunal in the case of Square D. Textiles Exports Limited (supra) and the decision of Hon'ble High Court of Punjab & Haryana in the case of Vikrant Overseas (supra). 5.1 It is seen that SION norms did not prescribe any heading against the description of the goods. A perusal of the notification 93/2004-Cus also shows that there is no mention of sub-heading or heading against the goods permitted for import against license. Ld. Counsel has argued that the classification of the goods has no bearing for admissibility of import under the notification. The appellant have also produced the minutes of meeting held on 11.06.2009 wherein their case for amendment of licenses was considered by the licensing 5 authority. In the minutes of the said meeting, the Ministry of Commerce has held as follows:-
Case No. 208 M/s. Condor Foorwear (India) Limited Surat NC.11/10 dt. 11.06.2009 F.No. 1/84/162/42/AM10-DES-V Request for import against Advance Authorisation No. 5210021658 dt.
06.06.2007 - under Para 4.7 of HBP (Vol 1) 2004-2009 Decision: The Committee considered the case as per agenda and along with other relevant papers and heard Sh. Rakesh Adnani, Director and Sh. Surendra Gandhi, an authorized representative of the firm, who appeared for personal hearing before NC. They explained the case along with relevant papers and sample of the export item. In this case advance authorization in question was issued on 06.06.2007 to the applicant firm and input output norms were ratified by norms Committee by allowing the inputs as per S1ON at S.No.A-3541. In this case firm imported Synthetic cloth for Uppers (Non Woven/ Woven /Knitted/ Laminated with PVC/PU) HSW-KN06B-LP. The Committee felt that as per SION, A-3541, it is clearly specified that the import item viz., Synthetic cloth for Uppers (Non Woven/Woven /Knitted/Laminated with PVC/PU) and Synthetic cloth for Insole (Non Woven/Woven/Knitted/Laminated with PVC/PU) are to be used for Uppers & Insole of the export product Synthetic Slippers/Sandals with PU Sole of all sorts irrespective of ITO (HS) Code, It has been observed that description of import item was classified under ITC (HS) Code 5903 10 90 with effect from the date of issue of the advance authorization. It was observed that in this case, the S1ON permitted the import item as per Bill of Entry and description covered under ITO (HS) Code 5903 10 90. The sample submitted by the firm has a clear view that item's description allowed under SION at S.No.A-3541 are classified under ITC (HS) Code 3920 49 00 instead of ITC (HS) Code 5903 10 90. Thus, Committee after detailed deliberations in consultation with the representatives of technical authorities present in the meeting felt that in both the heading of ITC (HS) code, the description of item of import and export are the same as per relevant SION, the condition of matching of ITC (HS) Code does not arise here. Hence, in this case, it is clarified that change in the ITC (HS) Code has no bearing on the benefits to be given under advance authorization issued under Para 4.7 of HBP." From the above, it is apparent that as far as the benefit of Notification No. 93/2004-Cus is concerned, the classification of goods specified in SION norms is not relevant unless it is specifically mentioned in the SION norms. The committee at Ministry of Commerce has also clarified that any change in the ITC (HS) Code has no bearing on the benefits to be given under advance authorization issued under Para 4.7 of HBP.
6
5.2 The Revenue has relied on the decision of Hon'ble High Court of Punjab & Haryana in the case of Vikram Overseas (supra). It is seen that the facts in the said case are significantly different. In the said case, the amendment was substantial in nature whereas in the present case it is of procedural in nature. The Hon'ble High Court of Bombay in the case of Bhilwara Spinners Limited vs. UOI - 2011 (267) ELT 49 (Bom.) distinguished the decision of Punjab & Haryana High Court in the case of Vikrant Overseas (supra) on the ground that license was amended with a clear intention of having a retrospective effect. In the instant case the committee has clarified that any change in the ITC (HS) Code has no bearing on the benefits to be given under advance authorization issued under Para 4.7 of HBP. In this circumstance, we hold that amendment made to the license will have a retrospective effect and the benefit of the notification cannot be denied on the ground that the classification of the goods did not match the classification specified in the advance license as long as the description of the goods matches with that prescribed in the license.
6. In view of the above, appeals are allowed.
(Pronounced in the open court on 25.04.2019) (Ramesh Nair) Member (Judicial) (Raju) Member (Technical) KL