2004 (8) TMI 457 - AT - Customs

Summary

Issues:
1. Denial of benefit under Notification No. 64/88 for imported spares.
2. Discrepancy in calculation of effective rate of duty.
3. Request for remand to determine correct rate of duty.

Issue 1: Denial of benefit under Notification No. 64/88 for imported spares
The appellants were required to pre-deposit an amount due to the denial of the benefit of Notification No. 64/88 for imported spares. The grounds for denial included the withdrawal of a certificate by the DGHS and non-compliance with conditions for free treatment regarding spare parts. The appellant argued that the effective rate of duty under the notification was 40%, contrary to the Department's calculation at the tariff rate. The appellant contended that the benefit claimed under the notification should be considered, and the question of the rate of duty is a legal issue that can be raised at the appellate stage. The appellant sought a remand to the Original authority to apply the correct effective rate of duty.

Issue 2: Discrepancy in calculation of effective rate of duty
The Ld. Counsel argued that the Commissioner's rejection of the claim under Notification No. 65/88 along with Notification No. 190/92 was unjustified. The Commissioner's reasoning that the plea was not raised before the Original authority was deemed incorrect. It was emphasized that the effective rate specified in the notification should be applied when raising a demand, and legal grounds can be raised at the appellate stage. The goods were not considered liable for confiscation and penalty as the appellants had deposited the rate effective under the notification. Consequently, the impugned order was set aside, and the case was remanded to the Original authority to determine the correct rate of duty after providing an opportunity for the appellants to be heard.

Issue 3: Request for remand to determine correct rate of duty
The Ld. SDR had no objection to remanding the matter as a portion of the required amount had already been deposited by the appellants. After careful consideration, it was concluded that the appellant's arguments had merit. The appeal was taken up for dismissal, and the Commissioner's decision to reject the benefit claim under the notifications was found to be incorrect. The case was remanded to the Original authority to determine the correct rate of duty and issue a detailed order following a hearing for the appellants. Ultimately, the appeal was allowed by remanding the case to the Original authority for further proceedings.