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2010 (12) TMI 144 - AT - CustomsEPCG scheme - The department was of the view that goods imported from M/s.Pharmaplan were over invoiced by way of including charges relating to certain services and utilities in the value of capital goods, in order to wrongly avail the benefit of Customs Notification No.111/95 dt. 5.6.95 as amended which is available to a manufacturer only when value of capital goods imported during the validity of import licence, is in excess of ₹ 20 crores - Assessee contended that the total value of plant and equipment imported against the licence in question was only ₹ 15,38,34,583 - Appeal is dismissed
Issues:
1. Correct valuation of capital goods imported under the zero duty EPCG scheme. 2. Eligibility of the importers for the benefit of Customs Notification No.111/95. 3. Adjudication of the notice by the Chief Commissioner of Customs. 4. Appeal by the Revenue challenging the decision of the Chief Commissioner. Issue 1: Correct Valuation of Capital Goods The case involved the importation of capital goods under the zero duty EPCG scheme, with the department alleging that goods imported from one company were overvalued to improperly avail customs duty benefits. The show-cause notice claimed that the correct value of the goods was lower than what was declared, leading to a proposed denial of benefits and duty recovery. The Chief Commissioner of Customs adjudicated the notice, accepting the importers' contention regarding the declared value of goods supplied by the company in question, and subsequently dropped the proceedings with a warning regarding export obligations. Issue 2: Eligibility for Customs Notification Benefit The Appellate Tribunal analyzed the value of the imported goods, including those from different companies, and determined that the total value exceeded the threshold limit prescribed for availing the zero duty benefit under the EPCG scheme. As the total value surpassed Rs. 20 crores, the importers were deemed eligible for the benefit of the Customs Notification in question. Consequently, the Tribunal upheld the decision to extend the notification benefit to the importers and rejected the Revenue's appeal challenging this eligibility. Issue 3: Adjudication by Chief Commissioner The Chief Commissioner of Customs adjudicated the show-cause notice, initially raised by the department, and accepted the importers' explanation regarding the valuation of goods from a specific company. The Chief Commissioner's decision to drop the proceedings was based on this acceptance, with a cautionary note regarding the fulfillment of export obligations within the stipulated period to avoid duty recovery. Issue 4: Revenue's Appeal The Revenue appealed the decision of the Chief Commissioner, contesting the acceptance of the importers' declared value and the extension of the Customs Notification benefit. However, the Appellate Tribunal, after hearing both sides, upheld the decision to grant the benefit to the importers based on the total value of the imported goods exceeding the prescribed threshold limit. The Tribunal also dismissed the cross-objection related to the Revenue's appeal, considering it as comments or a reply to the original appeal. This comprehensive analysis of the judgment highlights the key issues, decisions, and legal considerations involved in the case.
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