2015 (11) TMI 1225 - AT - Customs

Levy of SAD where basic customs duty and countervailing duty is exempt under Notification No. 54/2003-Cus dated 01.04.2003 on the strength of the duty-free service entitlement credit certificate. - Held that - Only condition for exemption from SAD in Notification 20/2006-Cus is that the goods should be exempt from payment of basic customs duty and countervailing duty (leviable under section 3 (1) of the Customs Tariff Act, 1975) the above quoted language of the exemption notification no where states that the exemption should be unconditional. It is a fact that vide Notification No.54/2003-Cus, basic customs duty and countervailing duty under Section 3 (1) of the Customs Tariff Act, 1975 were exempted during the relevant period. - fact remains that during the relevant period the impugned goods were fully exempt from basic custom duty as well as CVD leviable under section 3 (1) of Customs Tariff Act, 1975 and consequently, they (i.e., the impugned goods) were entitled to the benefit of Notification No.20/2006 - Cus. Indeed in a similar set of circumstances in the case of Gujarat Ambuja Exports Ltd. Vs. Union of India (2013 (6) TMI 536 - GUJARAT HIGH COURT), Gujarat High Court held that the import goods were entitled to the benefit of Notification No.20/2006-Cust when they (import goods) were exempt from duty under notification No. 45/2002-Cus when imported under DEPB scheme (where the duty is debited to the duty entitlement pass book). The ratio of this judgement is clearly applicable to the present case. - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
Appeal against denial of benefit of Notification No.20/2006-Cus exempting special additional duty (SAD).

Analysis:
The appellant imported goods under 12 Bills of Entry and claimed exemption from basic customs duty and countervailing duty under Notification No. 54/2003-Cus dated 01.04.2003. However, they were required to pay SAD as it could not be debited to duty-free service entitlement credit certificates. The Commissioner (Appeals) upheld the denial of the benefit of Notification No. 20/2006-Cus, stating that the exemption was only available when goods were exempt from the whole of basic custom duty and additional duty of customs without any conditions. The appellant argued that since Notification 54/2003-Cus fully exempted basic customs duty and CVD, they were entitled to the benefit of Notification No. 20/2006-Cus, citing a relevant judgment.

The Tribunal examined Notification No. 20/2006-Cus, which granted exemption from payment of SAD for goods exempt from basic customs duty and countervailing duty. The Tribunal noted that the exemption did not require the exemption to be unconditional. Even though SAD was later exempted under Notification No. 54/2003-Cus, it was irrelevant for the case at hand as the Bills of Entry were dated prior to that change. The Tribunal emphasized that during the relevant period, the imported goods were fully exempt from basic custom duty and CVD, making them eligible for the benefit of Notification No. 20/2006-Cus. Referring to a similar case, the Tribunal highlighted that import goods were entitled to the benefit of the notification when exempted under a different scheme. Consequently, the Tribunal allowed the appeal and remanded the case for granting relief to the appellant, with the condition that the burden of SAD was not passed on to another party.