2003 (3) TMI 377 - AT - Customs

Summary

Issues:
Appeal against order setting aside Order-in-Original related to exemption benefits under Notifications 126/94 and 13/81 for an industrial cooling unit imported by a 100% EOU engaged in floricultural activities.

Analysis:
The appeal before the Appellate Tribunal CEGAT, Chennai stemmed from a dispute over the eligibility of an industrial cooling unit for full exemption benefits under Notification No. 126/94. The importer, a 100% Export Processing Unit (EOU) engaged in floricultural activities, initially claimed the benefit under this notification. However, a subsequent show cause notice challenged this claim, leading to a denial of benefits under both Notification No. 126/94 and Notification No. 13/81 by the Assistant Commissioner of Customs. The Commissioner (Appeals) upheld the denial under Notification No. 126/94 but extended the benefit under Notification No. 13/81, prompting the Revenue to file the present appeal.

During the proceedings, it was noted that the importer had not originally claimed the benefit under Notification No. 13/81 at the time of importation. However, the Commissioner (Appeals) deemed this a legal plea that could be raised at any point, especially since the importer had initially availed benefits under Notification No. 126/94. The Tribunal agreed with this reasoning, emphasizing that the importer's subsequent claim under Notification No. 13/81 was a valid response to the show cause notice challenging their original benefit.

Regarding the denial of benefits under Notification No. 13/81 due to manufacturing operations not being carried out in a Customs Bond, the Commissioner (Appeals) referenced a Ministry's Circular that waived physical supervision requirements. The Tribunal concurred with this interpretation, asserting that compliance with other conditions sufficed to establish that manufacturing operations were conducted in a Customs Bond. The Revenue's argument against relaxing notification conditions was dismissed, highlighting that the circulars issued by the Board were binding on lower authorities, and the waiver of physical supervision did not negate the fulfillment of substantive conditions for benefit eligibility.

In conclusion, the Tribunal rejected the Revenue's appeal, affirming the Commissioner (Appeals)' decision to extend the benefit of Notification No. 13/81 to the importer engaged in floricultural activities, based on the legal and procedural considerations outlined during the adjudication process.