2005 (2) TMI 731 - AT - Customs

Summary

Issues:
1. Stay application seeking waiver of pre-deposit of duty.
2. Interpretation of Notification No. 17/2001-Cus regarding import of goods by a subcontractor.
3. Eligibility for exemption under the notification for goods imported by a subcontractor of a joint venture company.

Analysis:
The case involved a stay application seeking waiver of pre-deposit of duty amounting to Rs. 8,01,178 and Rs. 7,54,943 arising from an order of the Commissioner (Appeals), Mumbai. The applicants imported two consignments of Bobbcat Skid Steer Loader and attachments, claiming the benefit of Notification No. 17/2001-Cus at a Nil rate of duty. The dispute centered around the interpretation of the notification concerning the eligibility of the importer, who was a subcontractor of a joint venture company, for the exemption provided under the said notification.

The lower appellate authority had held that the importer, being a subcontractor of the joint venture company to whom the contract was awarded by the National Highway Authority of India (NHAI), was not eligible for the benefit of Notification No. 17/2001-Cus. However, upon hearing both sides, the Tribunal observed that the Department had taken a narrow view by denying the benefit of the notification solely because the import was made by a subcontractor. The Tribunal noted that the applicant had made a strong prima facie case in their favor, highlighting that the exemption under the notification is intended for goods imported by a contractor to whom work was allotted by NHAI, which should not be restricted based on subcontractor status.

In light of the above analysis, the Tribunal, represented by Member (T), Moheb Ali M., decided to waive the pre-deposit of duty and stay the recovery thereof during the pendency of the appeal. The Tribunal's decision was based on the understanding that the applicant, as a subcontractor of the joint venture company awarded the contract by NHAI, should not be deprived of the benefit of the notification due to a strict interpretation that disregards the practical aspects of the contractual relationship.