In The Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench At Ahmedabad
[Arising out of OIA-12-14/COMMR-A/CUS/KDL/2013 dated 08.02.2013 passed by the Commissioner of Customs (A) - Kandla]
M/s Reliance Port & Terminals Ltd.
For Appellant: Mr. K.J. Kinariwala (AR)
For Respondent: Mr. J. C. Patel(Advocate)
HON’BLE MR. RAMESH NAIR, MEMBER (JUDICIAL)
HON’BLE MR. RAJU, Member (Technical)
Date of Hearing:29.08.2018
Date of decision03.10.2018
Final Order No. A/ 12073 /2018
Per: Ramesh Nair
The issue in brief is that the respondent assesse had imported Grout Bags, Class G Cement and Polyisocyanurate Insulate Foam falling under falling under CTH- 39, 25 and 32 respectively at Customs House at Kandla and Mundra and through their air cargo complex Mumbai vide 9 bill of entry by availing benefit of EPCG Scheme under Notification No. 97/2004-Cus dated 17.09.2004. The DRI has booked a case on the ground that the assessee have imported the goods i.e. consumables and since word ‘consumables’ was deleted from the scope of Notification No. 97/2004-Cus dated 17.09.2004 by way of amendment through Notification No. 72/2007-Cus dated 21.05.2007, the benefit of concessional rate of duty under EPCG Scheme is not available. After investigation a SCN No. DRI/AZU/INV-21/2009 dated 25.03.2011 was issued proposing confiscation of imported goods recovery of differential duty besides invoking penalty, interest etc. The Additional Commissioner Customs, Kandla being the common adjudicating authority adjudicated the matter vide order in original whereby he ordered for confiscation of goods valued at Rs. 1,76,99,272/- with option for redemption on a fine of Rs. 40 Lakhs, recovery of differential duty of Rs. 49,58,803/- and penalty of Rs. 15
Lakhs, Rs. 3 lakh and Rs. 5 Lakh each was imposed on the Respondent Co. and individuals. Being aggrieved by the order in original, the Respondent filed appeals before the Commissioner (Appeals). The Ld. Commissioner (Appeals) allowed the appeals after interpreting the Notification 97/2004-Cus dated 17.09.2004. The Ld. Commissioner(Appeals) also set aside the demand on the ground of time bar. Therefore, the present appeal filed by the Revenue.
2. Sh. K. J. Kinariwal, Ld. Deputy Commissioner (AR) appearing on behalf of the appellant reiterates the ground of appeal. He submits that under Notification No. 97/2004-Cus the description of goods is ‘capital goods for pre-prodcution, production and post-production
including second hand capital goods’. As per the definition under para 9.1.2 of Chapter 9 of Foreign Trade Policy, the consumables which were imported by the respondent does not fall under the definition. He submits that the goods imported by the appellant is undisputedly consumables and the same has been deleted from the exemption Notification. He further submits that if the consumables are allowed under the exemption notification then the deletion of consumables in the exemption entry will be of no meaning. Therefore, the consumables firstly, not entitled for the exemption and the same also not fall under the category of capital goods. Therefore, the Commissioner (Appeals) erred in wrongly interpreting the Notification No. 97/2004-Cus.
3. Sh. J C Patel Ld. Counsel appearing on behalf of the Respondent submits that even though the word consumables was deleted in the exemption entry under Notification 97/2004-Cus dated 17.09.2004 vide amendment Notification No. 72/2007-Cus dated 21.05.2007 but as per the nature of the goods, it was used for installation of Crude. Product pipelines, therefore, all the goods used during the initial installation of pipeline shall be categorized as capital goods only. Since, the goods imported are used for supporting, sterilizing and insulating the pipelines during its installation they are accessories to the pipelines which are installed and used by the appellants for rendering the service. He submits that even if the goods are to be treated as consumables they are nevertheless in the nature of plant accessories or equipment and therefore, capital goods. As laid down by the CESTAT in the case of Reliance Communication Infrastructure Ltd. vs CC Bangalore 2009 (240) ELT 461 even gas which is required in the gas suppression system and which was alleged by the department to be consumable satisfies the definition of capital goods. Therefore, the goods imported by the appellant are capital goods and entitled for the exemption under EPCG Scheme. He further submits that the demand is clearly time bar as the goods were imported during the period June 2007 to October 2008. On the basis of EPCG license granted by DGFT, the description of goods in the EPCG license as well as bills of entry were made as consumables. Had the department of any doubt the same could have been raised during normal period of one year. Since there is no suppression of fact on the part of the respondent, the Ld. Commissioner (A) also rightly held the demand as time bar. He placed reliance on the following judgments.
⦁ Northern Plastics Ltd. vs Collector – 1998 (101) ELT 549 (SC)
⦁ CC vs Gaurav Enterprises-2006 (193) ELT 532 (Bom)
⦁ C. Natwarlal & C. vs CC-2012-TIOL-2171-CESTAT-MUM
⦁ S. Rajiv & Co. vs CC-2014 9302) ELT 412
4. We have carefully considered the submission made by both the sides and perused the records. From the entire facts and submission made by both the sides. We find that this appeal can be disposed of only on the ground of limitation. We find that import of the goods were made during 2007-2008 whereas the SCN was issued on 25.03.2011 invoking the extended period. From the facts it is clear that the respondent have obtained the EPCG license wherein the description of goods was clearly declared as consumables. The bills of entry also bear the same description. The objection by the department is not on the basis of the material fact but on the interpreting of Notification No. 97/2004-Cus. It was clear to all that the word consumables was deleted in the exemption entry under EPCG Scheme, therefore, there is no mis-declaration or suppression of fact on the part of the respondent. This case is solely on the interpretation of the word interpreting of exemption entry of capital goods in the Notification 97/2004-Cus dated 18.09.2004. Moreover the Revenue in its appeal has not made any ground on the issue of limitation which appears that the Revenue has given up the issue of limitation, therefore, the demand is clearly hit by limitation hence, we uphold the impugned order only on the ground of limitation without going into merit of the case. The Revenue’s appeal is dismissed.
(Pronounced in the open court on 03.10.2018)
(Raju) (Ramesh Nair)
MEMBER (TECHNICAL) MEMBER (JUDICIAL)