2006 (12) TMI 402 - AT - Customs

Summary

Issues:
1. Stay application for waiver of pre-deposit and stay of recovery of duty short-levied and interest.
2. Interpretation of Notification No. 25/99-Cus. regarding the eligibility of imported goods for exemption.

Analysis:
1. The appellant, M/s. IEE Engineering Enterprises (P) Ltd., filed a stay application seeking waiver of pre-deposit and stay of recovery of Rs. 2,91,176/- for duty short-levied and interest. The issue arose from the import of "Capacitor Grade Biaxially Oriented Polypropylene (BOPP) Film" under two Bills of Entry in 9/2000 and 11/2000, availing the benefit of Notification No. 25/99-Cus. The dispute emerged when audit objections led to Show Cause Notices claiming recovery of exemption granted, contending that the imported goods were not covered under the relevant list for exemption. The lower appellate authority held that the goods became eligible for exemption only after the issuance of Notification No. 20/01-Cus. dated 1-3-01, which included an explanation clarifying the inclusion of BOPP film under "plain plastic film."

2. The appellant's consultant argued that the explanation in Notification No. 20/01-Cus. should be applied retrospectively to cover the impugned goods, even though the specific list entry was included later in Notification No. 28/03. Citing the Supreme Court judgment in S. Sundaram Pillai & Ors. v. V.R. Pattabiraaman & Ors., the consultant contended that the explanation should operate retrospectively. However, the Revenue's representative contested this interpretation, referring to relevant Board Circulars indicating that the impugned goods were not originally eligible for the concession under Notification No. 25/99-Cus.

3. Upon careful consideration, the Tribunal found that the explanation in Notification No. 20/01-Cus. was issued to remove doubts and clarified the entry against which the impugned goods were claimed for exemption. The Tribunal noted that the clarification was effective from the date of the original notification, implying that the impugned goods were indeed eligible for the exemption at the time of import. Consequently, the Tribunal ruled in favor of the appellant, granting waiver of pre-deposit and stay of recovery during the appeal process.

This detailed analysis of the judgment highlights the key issues of the stay application and the interpretation of relevant notifications, providing a comprehensive understanding of the Tribunal's decision in the case.