2007 (2) TMI 18 - AT - Customs

Import Appellant imported a second hand CPM and sought duty paid clearance of the machine in terms of a DFSECC issued by DGFT Duty free clearance were rejected on the ground that there is no nexus to the service rendered Authority allow the appeal with consequential relief

Summary

Issues:
1. Rejection of Duty Free Clearance for imported machine
2. Nexus between imported machine and services rendered by the appellant
3. Validity of restrictions imposed by authorities on Duty Free Credit Entitlement Certificate

Issue 1: Rejection of Duty Free Clearance
The appellant imported a second-hand Card Personalization Machine seeking duty paid clearance based on a Duty Free Service Entitlement Credit Certificate issued by the DGFT. The claim for Duty Free Clearance was initially rejected by the Asstt. Commissioner of Customs, and the first appeal was also dismissed by the Commissioner (Appeals), leading to the present appeal before the Tribunal.

Issue 2: Nexus between imported machine and services
The original authority rejected the appellant's claim citing a lack of nexus between the imported machine and the services rendered by the appellant. The appellant argued that the machine would be used for the main line of operations, providing services for maintenance and repair of machines supplied to the Reserve Bank of India. The Tribunal found merit in the appellant's contention, stating that the machine was used for personalization activities in the financial sector, such as printing International Chip Card IDs on GSM sim cards, and personalizing chip/sim cards for mobile service providers and banking industry.

Issue 3: Validity of restrictions on Duty Free Credit Entitlement Certificate
The appellant contended that authorities cannot impose restrictions on the utilization of the Duty Free Credit Entitlement Certificate without statutory provisions to support such restrictions. The Tribunal agreed with this argument, citing the absence of stipulations in the exemption notification and the certificate itself. The Tribunal emphasized that authorities cannot introduce additional restrictions beyond what is specified in the statutory provisions, thereby allowing imports based on personal opinions of officers.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal and granting consequential relief to the appellant. The judgment highlighted the importance of establishing a nexus between imported goods and services rendered, as well as the limitations on authorities to impose restrictions beyond statutory provisions on Duty Free Credit Entitlement Certificates.