2015 (10) TMI 2082 - AT - Customs

Clearance of goods under Status Holder Incentive Scheme Benefit of Notification No. 104/2009 Appellants imported titanium sheets for clearance under Status Holder Incentive Scheme (SHIS) claiming benefit of Notification No. 104/2009 Adjudicating authority denied benefit of notification on ground that titanium sheets are not capital goods but confirmed amount under section 28(2) of Customs Act 1962 Commissioner set aside order of adjudicating authority and allowed appeal of respondent Held that - licensing authority had issued EPCG licenses to appellant for import of said product It is evident that list of items given in list include titanium sheets titanium rod titanium tube/pipe etc. under EPCG licence No dispute on fact that appellant is actual user and imported goods are used in chemical industry In respect of import of capital goods they are governed by FTP and once licensing authorities include any item as capital goods same is to be allowed by customs Therefore lower authority in impugned order rightly held titanium sheets are capital goods covered under capital goods definition and same is eligible under SHIS scrip under Notification No. 104/2009 Therefore impugned titanium sheets imported under SHIS are eligible for exemption Decided in favour of Assesse.

Summary

Issues involved:
- Interpretation of Notification No. 104/2009 for clearance of imported titanium sheets under Status Holder Incentive Scheme (SHIS).
- Determination of whether titanium sheets qualify as capital goods.
- Consistency in decisions between different appellate authorities.
- Impact of EPCG license approval on classification of goods.

Analysis:

1. Interpretation of Notification No. 104/2009: The primary issue in the appeal was the correct application of Notification No. 104/2009 for the clearance of imported titanium sheets under the SHIS. The assessee claimed the benefit of the notification, which covers capital goods, parts, and accessories required for manufacturing or production. The adjudicating authority initially denied the benefit, leading to the appeal.

2. Classification of Titanium Sheets as Capital Goods: The crux of the matter revolved around whether titanium sheets could be considered capital goods. The assessee argued that the titanium sheets were used as lining material in their chemical reactor, making them part of capital goods. The definition of capital goods under the notification was broad and inclusive, covering items like refractories for lining. The lower appellate authority for a subsequent period had already allowed the benefit, indicating a discrepancy in decisions.

3. Consistency in Decisions: The inconsistency in decisions between the lower appellate authorities for different periods raised questions about uniformity in interpretation. The assessee highlighted previous cases where similar goods were classified as capital goods, emphasizing the need for coherence in rulings across different time frames.

4. Impact of EPCG License: The issuance of an EPCG license for the import of titanium sheets played a crucial role in the judgment. The licensing authority had approved the import of titanium sheets under the EPCG scheme, categorizing them as capital goods. This approval significantly influenced the decision regarding the eligibility of the imported goods under the SHIS.

5. Judgment and Conclusion: After thorough consideration of arguments and definitions, the Tribunal concluded that the imported titanium sheets qualified as capital goods under the Notification No. 104/2009. The Tribunal emphasized that once an item was classified as capital goods by the licensing authority, customs authorities should not deny the corresponding benefits. The decision differentiated between parts of capital goods and affirmed that the titanium sheets were directly used in the fabrication of chemical reactors, aligning with the definition of capital goods. Consequently, the appeal of the assessee was allowed, while the appeal of the Revenue was rejected based on the upheld decision of the Commissioner (Appeals).

By meticulously examining the legal provisions, definitions, and precedents, the Tribunal provided a comprehensive analysis to resolve the issues at hand and deliver a well-founded judgment.