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2015 (10) TMI 2392 - AT - CustomsImport of capital goods under SHIS scheme - Supply of equipment for continuous annealing line for cold rolling mill Claimed clearance under Status Holder Incentive Scheme (SHIS) scheme vide Customs Notification No. 104/2009 Revenue contended that goods are not capital goods thus not liable for exemption. Held That - Definition of capital goods given in FTP are same for EPCG licence or for SHIS Licence Notification No.104/09-Cus. clearly allows exemption of capital goods imported into India against Duty Credit Scrip issued under SHIS Scheme thus respondents are eligible for benefit Decided in favour of the assessee.
Issues:
- Eligibility for clearance of imported goods under SHIS Scheme - Classification of goods under respective chapter headings instead of capital goods under Chapter 84 Analysis: 1. Eligibility for clearance of imported goods under SHIS Scheme: The case involved a dispute regarding the eligibility of imported goods for clearance under the Status Holder Incentive Scheme (SHIS). The Revenue filed an appeal against the Order-in-Appeal passed by the learned Commissioner (Appeals) where it was held that the imported goods are capital goods eligible for SHIS scheme benefits. The learned AR argued that the SHIS exempts capital goods imported against duty scrip issued under the scheme. The definition of capital goods under the Foreign Trade Policy (FTP) was discussed, emphasizing that only capital goods are allowed under the SHIS scheme. The AR highlighted that the goods imported were not capital goods and hence not eligible for SHIS benefits. Various legal precedents were cited to support this argument. 2. Classification of goods under respective chapter headings: The Revenue contended that the imported goods should be classified under respective chapter headings instead of being considered as capital goods under Chapter 84. The learned Advocate for the respondent countered this argument by emphasizing the nature of the imported goods as parts of capital goods covered under a purchase order for setting up a new plant. The respondent had entered into a contract with a foreign supplier for the supply of equipment for a continuous annealing line and galvanizing line for a cold rolling mill. The agreement indicated that the goods imported were part of a larger project involving the import of plant and machinery. The respondent argued that the goods were specific and tailor-made for the plant and were essential and integral parts of the capital goods being set up. The respondent provided evidence of compliance with the EPCG license and the installation of the imported goods in the project. 3. Judgment: The Appellate Tribunal carefully considered the submissions of both parties and analyzed the contract agreements and nature of the imported goods. It was observed that the contract clearly indicated the import of plant and machinery for a specific project. The Tribunal noted that the definition of capital goods under the FTP applied uniformly to both EPCG and SHIS schemes. The Tribunal agreed with the findings of the learned Commissioner (Appeals) that the imported goods were indeed capital goods eligible for SHIS benefits. The Tribunal rejected the Revenue's appeal and upheld the impugned order, concluding that the respondents were eligible for the benefit of Customs Notification No.104/2009 under the SHIS Scheme for the clearance of the imported goods covered under the Bills of Entry. In conclusion, the judgment clarified the eligibility of imported goods for clearance under the SHIS Scheme and affirmed the classification of the goods as capital goods under Chapter 84. The detailed analysis considered the contract agreements, nature of the imported goods, and relevant legal provisions to reach a decision in favor of the respondents.
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