2015 (4) TMI 562 - SC - Customs

Denial of exemption claim - import of hot mix plant or only parts notification dated 1.3.2001 - exemption from payment of customs duty and additional duty leviable under the Customs Tariff Act - imports to be made by a Joint Venture Company and not by one of the partners of the said company - Held that - both authorities have relied upon statements made by none other than the Vice President of the Appellant who after retracting a statement made on 3.1.2002 has made a subsequent statement on 21.2.2002 admitting that the imported goods were only components and had not attained the essential characteristics of a plant. The subsequent statement has not been retracted - statements made to an Officer of Customs are admissible in evidence under Section 108 of the Customs Act, 1962 - unretracted statements made by none other than the Vice President of the appellant company, representatives of Marshalls, and a representative of National Highways Authority of India, having never been retracted later, were made voluntarily. Reliance on the said statements, therefore, by the authorities below cannot be said to be unwarranted in law. It is clear that on a holistic reading of the letter what has been imported is the basic character of the hot mix plant and not a complete plant as it is clear that what is manufactured indigenously would alone ultimately complete the plant. - Equally the letter dated 20.1.2002 being a letter by the National Highways Authority of India does not take us much further. In fact, as has been pointed out above, Shri M.V.N. Rao of the said authority candidly admitted that a complete plant had not been imported and that the imported components did not have the essential characteristics of the hot mix plant in question. In the present case, both the oral evidence and the documentary evidence ultimately lead to the same conclusion namely, that what was imported was not a hot mix plant that was complete in itself. - CESTAT has already given the appellant considerable relief. The redemption fine of ₹ 5,00,000/- imposed by the Commissioner was reduced to a fine of ₹ 1,00,000/- and a penalty of ₹ 1,00,000/- imposed by the appellant has also been set aside. In the circumstances, the appeal is dismissed with costs of ₹ 1,00,000 - Decided against assessee.

Summary

Issues Involved:
1. Eligibility for customs duty exemption under Notification No. 17/2001.
2. Whether the imported goods constituted a complete hot mix plant or only parts thereof.
3. Interpretation of exemption notifications under the Customs Act.

Detailed Analysis:

Issue 1: Eligibility for Customs Duty Exemption Under Notification No. 17/2001
The appellant entered into a Joint Venture Agreement for road construction in Andhra Pradesh and claimed customs duty exemption under Notification No. 17/2001 for importing a hot mix plant. The Customs Authorities denied the exemption, arguing that the import was not made by a Joint Venture Company and that only parts of the plant were imported. The Commissioner of Customs held that the exemption applies only to a complete plant, not to parts or components.

Issue 2: Whether the Imported Goods Constituted a Complete Hot Mix Plant or Only Parts Thereof
The appellant placed an order for a hot mix plant with M/s Lintec GmbH & Co.KG, Germany, and M/s Marshalls, Chennai. The Customs Authorities maintained that the imported items were only parts of the plant, not a complete plant. The Commissioner of Customs found that the imported goods included only one assembled segment and components, not the entire plant. The CESTAT upheld this finding, noting that essential components were manufactured indigenously and the imported goods did not constitute a complete hot mix plant.

Issue 3: Interpretation of Exemption Notifications Under the Customs Act
The appellant argued that Rule 2(a) of the general rules for the interpretation of the Customs Tariff Act should apply, allowing for unassembled imports to be considered as complete. However, the Court held that this rule does not apply to exemption notifications under Section 25 of the Customs Act. The Court emphasized that eligibility criteria for exemption notifications must be strictly construed. The Court found that the concurrent findings of the Commissioner and CESTAT were correct, as the imported goods did not constitute a complete hot mix plant and thus did not qualify for the exemption.

Conclusion:
The Supreme Court dismissed the appeal, agreeing with the lower authorities that the imported goods did not constitute a complete hot mix plant and thus did not qualify for the customs duty exemption. The Court also noted that the appellant had already received considerable relief from CESTAT, which reduced the redemption fine and set aside the penalty. The appeal was dismissed with costs of Rs. 1,00,000/-.