Customs, Excise and Gold Tribunal - Bangalore
M/S Reesan Information Management ... vs The Collector Central Excise & Customs ... on 18 May, 2001
Equivalent citations: 2001(133)ELT644(TRI-BANG)
ORDER
Shri S.S. Sekhon
1. The appellant is a 100% Export Oriented Undertaking (here-in after referred to as "the EOU") engaged in development of software and located at Software Technological Park, TC 15/82, Chennakara Building, Vallayambalam, Trivandrum.
2. Benefit of Notification No 123/81 was denied by the jurisdictional officers and the Commissioner (Appeals) vide his order impugned before us, after examining the plead of the appellants, came to a conclusion that plea of the appellant reliance on definition of term "capital goods" under Import Export Policy could not be relied upon as use of furniture, screen panels could not directly or indirectly b for manufacture of Computer Software as without these item s the Computer could function.It was further held that even if it is the position of use of furniture as special type of `software' as pleaded, it cannot automatically mean that the furniture directly or indirectly is used for the manufacture of the software.It was difficult to concede that such arrangement had direct impact of the production line.The fact that the item may be capital assets will not ipso facts bring it under the term "capital goods brought in connection with manufacture of goods" as used in the said notification.
3. The appellants have taken the plea-
(a) Notification No 123/81 as amended exempts capital goods, components, raw materials, consumable, spares and packing materials when brought in connection with the manufacture and packaging of articles into a 100% Export Oriented unit and the appellants are of the view that only such goods which have direct application in the manufacturing and processing is not correct.
(b) The words "in connection with the manufacture and packing of goods" has been overlooked.The use of words "in connection with manufacture" in the notification has wider connotation giving to the terms "capital goods" to include this subject items. Analogous Notification applicable to similar goods extending the benefit of full customs duty exemption specifically included in the list of items eligible, goods intended to be used not only as office equipment but even spares and consumable which have been disregarded by lower authority.Analogous customs Notification should have been read to interpret the notification in question.
(c)It is not possible to manufacture final products in the absence of these goods under import.The creatural for consumption in the manufacture or conforming to be as part of the goods manufactured, is not prescribed in the subject Notification, therefore the interpretation of the appellate authority is not correct.
(d) The narrow interpretation was given by the lower authority when the words "capital goods" have not been defined the meaning applied as understood in the Import Export Policy should be given.
(e) The production line arrangement for the manufacture of software requires a cluster arrangement. Software industry is manpower intensive and the coordination of the software experts is a must along with ergodynamically designed office equipment and furniture for getting optimum results.
4. When the matter was called, nobody appeared for the appellants.a letter received from the Advocate was placed on record, that there was no further instruction in the matter.The matter may therefore be disposed off on the basis of appeal memo. We have heard learned Shri Thom,as George, JDR for the Department and considered the material and find-
(a) The short point to be decided in this case whether goods brought to the E.O.U. viz. tables, linking sides, screen panels, shelves, self columns, top supports and cable conducts, chairs, etc., mentioned in the annexure to the show cause notice, which had been brought in, without payment of Central Excise duty, are eligible for Notification of 123/81-CE as amended. This Notification, we find-
..."exempts capital goods, components, raw materials, consumable, spares and packaging materials (here-in-after referred to as the goods)when brought in connection with the manufacture and packaging of articles..."
(b) We find these words, in the case of Behive Foundary Engg Works Vs. Commissioner of C. Ex., Madras by the Tribunal in the case reported in 1997 (93) ELT 490 (Tribunal), held-
"...In respect of Notification No 123/81,one of the condition is that these goods should be used in the manufacture of the goods meant for export.Admittedly, the terms used "in the manufacture of" has a restricted meaning while the term used `in connection with the manufacture of' has a wider connotation.In the above view of the matter, we hold that the learned lower authority had rightly held that the appellants would not be eligible for benefit of the notification as claimed;as the goods cannot by a stretch struck of imagination be taken to be used in the manufacture of the goods...".
They denied the eligibility of the Notification No 123/81-CE to foundation nuts and structures, etc.However, that Bench, noting that CT3certificate was issued in the name of manufacturing and therefore remanded the matter back to the authority, to determine whether the liability of duty would accrue on the recipient company or the dispatching company.
(c)Following this decision, we would, set aside the impugned said order and remand the matter back, to the original authority to decide the issue afresh in light of the decision of the Tribunal in the case of Beehive Foundary Engg.Works.
5. In view of our findings, we allow the appeal as remand to original authority to decide the issue afresh after giving the hearing to the appellants.
(Pronounced in the court on 18/5/2001)