2007 (3) TMI 478 - AT - Customs

Summary

Issues:
1. Interpretation of Notification No. 21/2002 regarding exemption of goods carried in a vessel.
2. Discrepancy between Essentiality Certificate and characteristics of imported goods.
3. Challenge to the levy of duty based on mis-application of Notification and legality of proceedings.

Analysis:
1. The appellant was required to pre-deposit a duty amount claimed by revenue for marine gas oil carried in a vessel. The dispute revolved around the interpretation of Notification No. 21/2002, which exempts specified goods brought in a vessel. The appellants, as sub-contractors for oil exploration, supplied marine gas oil to ONGC. Despite a discrepancy between the Essentiality Certificate for Marine Gas Oil and the characteristics of the imported goods resembling Light Diesel Oil (LDO) as per a test report, it was acknowledged that the item was consumable and covered by the Notification. The appellant contested the duty levy, alleging mis-application of the Notification and procedural irregularities.

2. The Tribunal considered both sides of the argument and analyzed the terms of the Notification. It was noted that the Notification exempted goods described in a specific serial number when brought in a vessel under contract to ONGC. The Tribunal emphasized that a mere mis-description in the Essentiality Certificate did not justify revenue demands if all items were covered in the Notification. Importantly, there was no requirement in the Notification for the Essentiality Certificate to specify the consumables' characteristics. The Tribunal found that the appellants had a strong case on merits and were likely to succeed. Consequently, the stay application was unconditionally allowed, granting a waiver of pre-deposit and staying the duty recovery, with the appeal scheduled for a future hearing.

In conclusion, the Tribunal's decision focused on the correct interpretation of the Notification's scope, emphasizing that compliance with the Notification's listed goods was crucial for exemption, regardless of discrepancies in accompanying documents. The Tribunal's ruling favored the appellants, recognizing the validity of their argument against the duty levy based on the Notification's provisions and the nature of the goods supplied.