2007 (4) TMI 254 - AT - Customs

Importer s claim of exemption of SAD in terms of the Notification No. 34/98-Cus. - one of the condition of the Notification No. 34/97 dated 7-4-97 is that duty should be paid by adjustment in the DEPB book - issue stands settled by the Tribunal in the case of Bangalore Mono Filaments (P) Ltd. - Tribunal has held that there is no requirements for debit of Special Additional Duty (SAD) from DEPB, which is meant only for payment of Basic Customs Duty and Additional Duty, subject to debits of above duty SAD is nil. Inasmuch as the issue is settled, Revenue s appeal is rejected

Summary

Issues:
1. Interpretation of Notification No. 34/98-Cus. dated 13-6-98 for exemption of Special Additional Duty (SAD).
2. Dispute over whether duty, including SAD, should be paid by adjustment in the Duty Entitlement Pass Book (DEPB) for exemption under the notification.
3. Comparison with Notification No. 34/97 dated 7-4-97 regarding payment of duty by adjustment in DEPB.

Analysis:
1. The judgment deals with the interpretation of Notification No. 34/98-Cus. dated 13-6-98 concerning the exemption of Special Additional Duty (SAD). The Commissioner (Appeals) accepted the importer's claim of exemption, leading to the Revenue's appeal challenging this decision.

2. The crux of the issue lies in whether duty, including SAD, must be paid by adjustment in the DEPB for the importer to qualify for the exemption under the said notification. The adjudicating authority contended that the importer must pay all duty, including SAD, by adjustment in the DEPB to be eligible for the exemption. However, the Tribunal referred to a previous judgment in the case of Bama Metal Industries v. Collector and emphasized that such an interpretation would render part of the notification redundant. The Tribunal reasoned that the purpose of Notification 34/98 is to exempt the importer from paying SAD, and a harmonious interpretation would allow exemption if the entire duty (excluding SAD) is paid by adjustment in the DEPB.

3. The Tribunal cited a previous judgment in the case of Bangalore Mono Filaments (P) Ltd. v. Commissioner of Customs (Sea), Chennai, which clarified that there is no requirement for debiting Special Additional Duty (SAD) from the DEPB. The DEPB is primarily for the payment of Basic Customs Duty and Additional Duty, and as long as these duties are debited, the SAD being nil does not affect the exemption. Consequently, the Tribunal found no merit in the Revenue's appeal and rejected it based on the settled interpretation provided by the previous judgments and the harmonious reading of the relevant notifications.

This detailed analysis of the judgment highlights the key issues surrounding the interpretation of the notification, the requirement for payment by adjustment in the DEPB, and the comparison with a related notification to arrive at a conclusive decision in favor of the importer's exemption claim.