2008 (4) TMI 108 - AT - Customs

Denial of exemption u/not. 94/96 to certain reimports - Notification exempts goods reimported into India& which are same as exported goods - Revenue plea is that this condition was not satisfied by the appellants inasmuch as the imported goods (engine assemblies) were not the same as the exported goods (fuel injection pumps and injectors) revenue plea is acceptable exemption not admissible to the fuel injection pumps and injectors imported as integral part of Diesel engine assemblies

Issues Involved:
1. Admissibility of exemption under Customs Notification No. 94/96-Cus for reimported fuel injection pumps and injectors.
2. Applicability of the doctrine of res judicata in taxation matters.
3. Validity of reopening assessments without recourse to Section 129D of the Customs Act.
4. Retrospective application of CBEC's Circular No. 1/2005-Cus dated 11-1-2005.

Issue-wise Detailed Analysis:

1. Admissibility of Exemption under Customs Notification No. 94/96-Cus:
The primary issue was whether the benefit of Customs Notification No. 94/96-Cus dated 16-12-1996 was admissible to fuel injection pumps and injectors reimported by M/s. Ford India after being fitted with engines abroad. The Notification exempts reimported goods from certain customs duties provided they are the same as those exported. The Revenue argued that the imported goods (engine assemblies) were not the same as the exported goods (fuel injection pumps and injectors), thereby disqualifying them from the exemption. The appellants contended that the process of fitting the pumps and injectors to engines did not involve remanufacturing or reprocessing through melting, recycling, or recasting, and thus, the pumps and injectors should be deemed the same as the exported goods. However, the Tribunal found that the pumps and injectors, once fitted to engines, lost their individual identity and became integral parts of the engine assemblies. Therefore, for purposes of the Notification, the goods imported were not the same as those exported, and the exemption was rightly denied.

2. Applicability of the Doctrine of Res Judicata in Taxation Matters:
The appellants argued that a previous favorable order by the Deputy Commissioner of Customs, Tuticorin, extending the benefit of the Notification to similar reimported goods should preclude the current demand. The Tribunal, however, noted that the doctrine of res judicata does not apply to taxation matters. The Supreme Court's judgment in Commissioner of Central Excise, Raipur v. Hira Cement was cited, affirming that non-filing of an appeal against an earlier order does not prevent the court from considering a case on its own merits when public interest is involved. Hence, the previous order could not operate as res judicata against the current proceedings.

3. Validity of Reopening Assessments Without Recourse to Section 129D of the Customs Act:
The appellants contended that the impugned orders effectively reopened the assessments of the bills of entry without following the appeal process under Section 129D of the Customs Act. The Tribunal dismissed this argument, referencing the Supreme Court's ruling in Union of India v. Jain Shudh Vanaspati Ltd., which established that any duty short-levied or short-paid can be recovered under Section 28 of the Customs Act without revising the assessment under other provisions.

4. Retrospective Application of CBEC's Circular No. 1/2005-Cus:
The appellants argued against the retrospective application of CBEC's Circular No. 1/2005-Cus dated 11-1-2005, which clarified that fuel injection pumps and injectors exported and reimported after fitment to engines were not covered by Notification No. 94/96-Cus. They cited the Supreme Court's decision in Suchitra Components v. Commissioner of Central Excise, Guntur, which held that oppressive circulars should only be applied prospectively. However, the Tribunal did not rely on this circular for its decision. Instead, it independently interpreted the Notification and concluded that goods exported and reimported after being fitted to other goods could not be considered the same as those exported, thus disqualifying them from the exemption.

Conclusion:
The Tribunal upheld the denial of the exemption under Customs Notification No. 94/96-Cus for the reimported fuel injection pumps and injectors, finding that they were not the same as the exported goods once fitted to engines. The doctrine of res judicata was deemed inapplicable to taxation matters, and the reopening of assessments was validated under Section 28 of the Customs Act. The argument against the retrospective application of the CBEC circular was noted but not relied upon in the decision. Consequently, the appeals were dismissed.

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