2011 (5) TMI 56 - AT - Customs

Demand - Notification No.32/97-Cus, dt.1.4.97 - it is noticed that these goods imported are under as per contract order specified in the notification and the resultant product which contained the imported goods have been duly exported to the same supplier who have entered to contract with appellant - The same stand correctly understood by the appellate authority and correctly applied - the notification while defining the goods also allows import of hangers for garments indicates that the same covers any item allowed to be imported with the only condition that the same should be used for the export goods - Decided in favour of the assessee

Summary

Issues: Interpretation of law in Notification No.32/97-Cus, dt.1.4.97

In this case, the Appellate Tribunal CESTAT, Ahmedabad heard an appeal filed by the Revenue against the order passed by the Commissioner(Appeals) accepting the respondent's appeal. The dispute revolved around the interpretation of law in Notification No.32/97-Cus, dt.1.4.97 regarding the benefit of Customs exemption for jobbing activities related to the manufacture of Plastic Extrusion Plant & Machineries falling under Chapter 84 of Customs Excise Tariff Act, 1985. The respondent had availed the benefit of the notification for jobbing, but the Revenue alleged that the activities did not qualify as job work under the notification, leading to duty evasion. The Additional Commissioner confirmed the demand, including duty foregone, interest, and penalty. The Commissioner(Appeals) accepted the respondent's appeal, emphasizing compliance with the conditions of the notification.

The Commissioner(Appeals) found that the imported goods were used for executing an export order, solely for export obligation, with the FOB value of resultant products exceeding the CIF value of imported goods. The jobbing was conducted following the rules laid down under Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996. The Commissioner(Appeals) noted that the lower authority's interpretation of jobbing was narrower than the definition provided in the notification, favoring the appellant's broader interpretation. The goods imported were in line with the contract order specified in the notification and were exported to the same supplier, complying with the exemption notification requirements.

The Appellate Tribunal upheld the Commissioner(Appeals) decision, highlighting the distinction between "Jobbing" and "Job Work." It noted that the notification allowed the import of various items, including hangers for garments, as long as they were used for export goods. As the imported items were used in manufacturing machineries exported by the respondent, the Tribunal found no reason to interfere with the Commissioner(Appeals) order. The Revenue's appeal was thus rejected based on the correct understanding and application of the notification's provisions.