2013 (10) TMI 679 - AT - Customs

Demand of Differential Duty - Concessional Rate of Duty Held that - The appellants have imported LCD panels with an intention to use the same in the manufacture of their final product and inasmuch as they have not been able to use the same, it had to be held that there was intention on their part to use the panel for the manufacture of television sets and it was the said intention, which was to be taken into consideration for the purpose of concessional rate of duty at the time of import of the goods - The import of the panels first and then re-export of the same panels without using the same, was of no financial benefit to the assessee - Prima facie no differential duty can be demanded from the assessee at the time of re-export of the same - policy was changed subsequently and Rule 7A was introduced in the said Rules allowing re-export of the unutilized imported goods. The appellant at the time of import of the goods claimed the classification under heading 9013 which attract nil rate of duty - The classification was not allowed to be adopted and the same was changed to 8529 - LCD panels were appropriately classifiable under 9013 - there was no stay of the operation of the said order of the Tribunal - If that be so, the appellant was required not to pay even 5% of duty, which they have initially paid at the time of import of the goods - appellant had been able to make out prima facie case in its favour so as to allow the stay unconditionally stay granted.

Summary

Issues:
Claim for dispensing with pre-deposit of duty and penalty in a stay petition regarding the classification and re-export of LCD panels.

Analysis:
The Appellate Tribunal CESTAT New Delhi addressed a stay petition seeking to waive the pre-deposit of duty and penalty amounting to Rs.78,53,643/- imposed on the appellant, engaged in manufacturing LCD Televisions. The appellant imported LCD panels classified under heading 9013 for nil basic customs duty, but Revenue classified them under heading 8529 attracting a 10% duty rate. The appellant availed benefits under notification No. 21/2002-Cus for manufacturing LCD televisions, clearing goods at a 5% duty rate. Dispute arose when some panels were re-exported without use, leading Revenue to demand differential duty, initiating proceedings against the appellant.

The appellant argued that the intended use, not actual use, of imported goods for manufacturing should determine concessional duty eligibility, citing a Supreme Court decision. The Tribunal agreed, emphasizing the appellant's genuine intention to use the panels for manufacturing, even though they were re-exported unused. The Tribunal noted the introduction of Rule 7A allowing re-export of unutilized goods and highlighted a previous Tribunal ruling classifying LCD panels under heading 9013, despite an appeal pending before the Supreme Court.

Considering the appellant's prima facie case, the Tribunal found in favor of the appellant, allowing the stay petition unconditionally. The Tribunal's decision was pronounced on 02.07.2013.