2008 (2) TMI 352 - AT - Customs

Appellants imported Petroleum Bitumen on strength of a Certificate issued by National Highways Authority of India claiming exemption under Not. no. 84/97 B/E was assessed provisionally when it was revealed that the Project implementing authority who has funded the project was not covered within the ambit of the Notification assessment was finalized and demand was raised held that demand is justified further it is held that in case of provisional assessments time bar doesn t apply

Summary

Issues:
1. Entitlement to exemption under Notification 84/97-Cus dated 11.11.1997.
2. Provisional assessment of imported goods.
3. Interpretation of the definition of 'international organization' under the Notification.
4. Effect of provisional assessment on final duty liability.

Entitlement to Exemption under Notification 84/97-Cus:
The appellant imported Petroleum Bitumen claiming exemption under Notification 84/97-Cus. The issue arose when doubts were raised regarding the funding organization, Japan Bank of International Cooperation (JBIC), not falling under the definition of 'international organization' as per the Notification. The appellant argued that they produced the necessary Certificate at the time of import and should not be denied the exemption later. They cited case laws to support their contention. However, the Tribunal held that even though the Certificate was produced, the assessments were kept provisional, and once it was established that JBIC did not qualify as an international organization, the appellant was not entitled to the exemption.

Provisional Assessment of Imported Goods:
The assessment of the imported goods was kept provisional for two reasons: to verify the nature of the product and to confirm if the funding organization, JBIC, met the criteria under the Notification. The Revenue finalized the assessments demanding duty once it was clear that the appellant was not eligible for the exemption. The Tribunal emphasized that when an assessment is provisional for any reason, it remains provisional for all purposes. Therefore, the Revenue was within its rights to demand duty upon finalization of the assessment.

Interpretation of the Definition of 'International Organization':
The definition of 'international organization' as per the Notification required the funding organization to fall within the criteria specified. The Tribunal noted that once it was established that JBIC did not meet this definition, the appellant could not claim the benefit of the exemption, despite producing the necessary Certificate at the time of import. The Tribunal highlighted that the Competent Authority's Certificate could be subject to errors, and if found incorrect later, the Revenue could recover the duty owed.

Effect of Provisional Assessment on Final Duty Liability:
The Tribunal clarified that the provisional nature of the assessment meant that the Revenue could finalize the duty demand upon determining the appellant's ineligibility for the exemption. The Tribunal dismissed the appeal, stating that the Revenue was justified in recovering the duty owed, even if the Show Cause Notice was issued beyond the normal period due to the provisional assessment. The Tribunal upheld that the provisional assessment allowed for the recovery of the duty at the time of finalization, without being subject to time limitations.