2016 (11) TMI 1515 - AT - Customs

Benefit of N/N. 228/88-Cus., dated 1-8-1988 and 234/92-Cus., dated 26-6-1992 - import of goods by the appellants, for the manufacture of goods required for the Light Combat Air Craft Programme - Department took the view that appellants are not eligible for benefit of notification since the notification had lapsed with effect from 13-12-1992 whereas the impugned goods had been imported during the period 1-1-1993 to 8-6-1993. Held that - Since the appellant had communicated the ad hoc exemption order and also filed refund claim thereof the same should be treated as a request for re-assessment. It should also be kept in mind that the appellant is an organization under Ministry of Defence involved in work of defence of the country. This being so, the procedural lapses if any by the appellant are very much in the nature of curable defects - appeal allowed.

Summary

Issues involved:
Import of goods for manufacturing under a specific program, eligibility for duty exemption under relevant notifications, time-barred refund claim, retrospective exemption granted by Finance Ministry, duty paid under protest, rejection of refund claim based on procedural grounds, appeal process.

Import of Goods for Manufacturing:
The dispute involved the import of goods by the appellants for the manufacture of goods required for the Light Combat Air Craft Programme. The appellants sought the benefit of Notification No. 228/88-Cus. and 234/92-Cus. exempting duty on components, parts, and accessories. The Department contended that the notification had lapsed before the goods were imported, leading the appellants to pay the entire duty liability. An ad hoc exemption order was later issued by the Ministry to exempt goods imported during a specific period.

Time-Barred Refund Claim:
The appellants filed a refund claim for the duty paid, which was initially rejected on the grounds of limitation. The First Appellate Authority upheld this rejection, leading to an appeal to the Tribunal. The Tribunal remanded the matter for reconsideration, but the refund claim was again rejected as time-barred by the adjudicating authority. The Commissioner (Appeals) later decided in favor of the appellants, ruling that there was no time bar. The department appealed this decision to the Tribunal, which dismissed the appeal due to the lack of clearance from the Committee of Disputes. Subsequently, the refund claim was rejected by the authorities below on the ground that the assessment order was not challenged by the appellants.

Retrospective Exemption and Duty Paid Under Protest:
The appellant argued that the Finance Ministry had granted an exemption with retrospective effect and that the duty was paid under protest. The authorities had initially rejected the refund claim on procedural grounds, but the Tribunal considered that the appellant's communication of the ad hoc exemption order and the filing of the refund claim should be treated as a request for reassessment. The Tribunal noted that the appellant, being an organization under the Ministry of Defence, involved in defense work, any procedural lapses were curable defects. Therefore, the Tribunal allowed the appeal filed by the appellant with consequential benefits as per law.

This comprehensive analysis of the legal judgment from the Appellate Tribunal CESTAT HYDERABAD highlights the key issues involved, the arguments presented by both parties, and the Tribunal's decision, providing a detailed overview of the case.