News Update

Stamping of hand baggage to be discontinued at 7 airports from April 1: CISFSC asks States and HCs to amend outdated criminal manualSocial assistance scheme not linked to Aadhaar: MinisterInter-State Council to discuss Punchhi Commission's ReportDigi Dhan Mela: Govt disburses Rs 226 Crore as rewardsPunjab allows self-attestation for small jobsACC approves Ms Vanjana Sarna’s name for post of CBEC ChairpersonEnsure that Export products including carpets should not be damaged or destroyed or cut for taking samples - CBEC advises field formations51 pax injured as six compartments of Mahakaushal Express derailsCX - Benefit of reduced quantum of penalty not available if only part of duty determined and interest payable thereon is paid: High CourtApex Court directs Govt to put Guidelines in place for police briefing to mediaGST Bills - A Bundle of Pain & Relief, both!I-T - No deduction u/s 24(1) is allowable on rental income derived by assessee from factory building leased to its sister concernCX - Once final product is treated as dutiable and duty is paid by assessee, there is no question of reversal of CENVAT credit: HCCus - Whether DEPB scrip, if found to be of sinister provenance, should be held against importer for imposition of penalty - matter referred to LBCX – Letters communicating Sec 142 certificate for recovery of dues arising in Bangalore Commissionerate are not appealable: CESTATGovt not considering any proposal for two-wheelers on CNG: MinisterGST Voting - Amendments proposed by V Moily defeated in ratio of 246 :46 + Lok Sabha passes all four GST BillsACC appoints ITAT V-P G D Agrawal as Officiating President for 6 months + extends retirement age for V-P to 62 yearsGeorgia & Eurasian Economic Union keen to have FTAs with IndiaVaranasi Meet - G-20 Working Group discusses current state of the global economyWelcome to The World of Compliances (See 'Corp Einsicht')Govt sets up Fund to promote investment in CLMV CountriesCBDT promotes 25 IRS officers as CCIT87 IRS officers appointed as ACITs
 
Cus - Exemption under Notification No 23/98 available to Cables cannot be extended to raw materials required for cables - Notification has to be interpreted strictly: CESTAT

By TIOL News Service

HYDERABAD, FEB 16, 2017: THE appellant is a manufacturer of cables and supplies them to various projects including refineries and power projects. During 1998-99, they received certain orders for supply of cables from certain oil refineries. Import of specified goods for setting up of oil refineries are exempted under Notification No 23/98-Cus dt.02.06.98 (Sl. No. 164, list 27, item 7). Cables are exempted from all duties of customs under Notification No.23/98-Cus provided that they are supplied to oil refineries on registration of the imports under Project Import Regulations, 1986. The said list specifically mentions cables.

The appellant opted for import of goods under Notification No. 23/98-Cus and registered the imports with the Customs, Hyderabad under the Project Imports Regulations, 1986 under CTH 9801. There is no bar in claiming exemption under any other notification even while clearing the goods under CTH 9801. Serial No. 164 of list 27, item 17 of the Notification No. 23/98-Cus provides exemption for ‘cables'. The appellant is eligible to import the raw materials required for manufacture of cables which were supplied to the refineries since entry of CTH 9801 covers the raw materials required for manufacture of cables that are going to be cleared to the refineries are also eligible for import under the said notification. The appellant declared in the contracts he executed before the Customs that he is going to import raw materials for manufacture of cables. The Customs registered the contracts without any objection. The appellants imported the goods i.e., raw materials; used them in manufacture of cables and supplied the cables to the oil refineries. The customs had cleared the goods without any objection. However, subsequently duty was demanded by denying the benefit of the exemption. The importer is in appeal against the same.

After hearing both sides, the Tribunal held:

+ The crux of the issue is firstly whether the appellant is eligible for benefit of exemption Notification No. 23/1998-Cus dated 02.06.1998 or otherwise and secondly, whether interest liability will accrue in provisional assessments initiated in July/August 1998, i.e. before 13.07.2006.

+ It is not disputed that the appellant had registered contracts under project imports for manufacture of cables required for refineries. They declared intention to import cables for the said project imports also availing duty concession benefits under the notification ibid. However, the appellants imported instead of cables, raw materials for manufacture of cables. On perusal of Sl.No. 17 of list 27(Sl. No. 164 of the Table) annexed to the said notification the item that is listed for benefit of duty concession are ‘goods specified in list 27 required for setting up crude petroleum refineries. The list 27, Sl.No.17, inter alia , covers ‘all types of cables'. However, nowhere in the aforesaid notification or lists/entries thereof, are raw materials for manufacture of cables included or permitted for duty exemption benefit. This being the case, the appellant cannot stretch the scope of the notification and argue that if cables are extended exemption therein, raw materials for manufacture of such cables would also come within the permissible ambit of exemption. This is definitely not the benefit intended by the said notification. It is settled law that exemption notification has to be strictly interpreted. The Hon'ble Apex Court has sustained this view in a number of judgments.

+ Coming to the second issue concerning demand of interest, it is noted that the Tribunal in Sterlite Industries (India) Ltd. Vs CC, Trichy reported in 2014 (311) E.L.T. 91(Tri-Chennai) held that in respect of provisional assessment prior to 13-7-2006 interest would not be leviable by invoking Section 18 (3) of the Customs Act, 1962. In the present case, at the time of resorting to the provisional assessment there was no statutory provision authorizing imposing of interest on the differential duty, (the provision which was introduced w.e.f. 13-7-2006), hence it is held that there cannot be demand of interest liability in this case.

(See 2017-TIOL-458-CESTAT-HYD)


POST YOUR COMMENTS