2002 (11) TMI 731 - AT - Customs

Summary

Issues:
1. Refusal of duty exemption under Notification No. 155/94-Cus.
2. Interpretation of Notification No. 155/94-Cus. regarding exemption of military stores.
3. Eligibility of imports as components for specialized vehicles peculiar to defense services.
4. Remand for re-determining eligibility under Notification No. 155/94-Cus.

Analysis:
1. The appellant, an Ordnance factory under the Ministry of Defence, imported Front Axel Set Shaft RH and assembly Front Axel Shaft LH from Japan against an initial order, paying customs duty. A refund application was made under Notification No. 155/94-Cus., which was rejected by the authorities, including the Commissioner (Appeals). The rejection was based on the late production of the Duty Exemption Certificate and the interpretation that motor vehicle parts do not qualify as military stores under the notification.

2. The notification exempts goods specified in the table from customs duty and additional duty, subject to certain conditions. While serial No. 3 lists arms, ammunitions, and military stores as exempt, the contention that motor vehicle parts should be classified as military stores was rejected. The notification distinguishes between items exempted for combat purposes and those required for specialized operational machines. The rejection of the refund claim was upheld based on this interpretation.

3. The notification at serial No. 4 exempts equipments and stores used by the defense services, including spare parts, accessories, and components for specialized vehicles. However, there was no finding on whether the imported items could be considered components for specialized vehicles peculiar to the defense services. The imports were made by a factory engaged in manufacturing vehicles for defense services, necessitating a re-determination by the adjudicating authority to ascertain eligibility for exemption under the specific provision.

4. The Tribunal remanded the matter for re-determining the eligibility under the notification for the imported items as components for specialized vehicles peculiar to defense services. Other issues were kept open for both parties, and the appeal was allowed for a de novo consideration of the refund claim after providing a personal hearing to the appellants. The appeal was disposed of accordingly, emphasizing the need for a fresh assessment based on the specific provisions of the notification.