2016 (12) TMI 703 - AT - Customs

Denial of benefit of Notification No.21/2002-Cus. dt. 1.3.2002 - contractor of nuclear project - goods meant for project used therein - Held that - The notification is concerned with the goods required for setting up of nuclear project having a capacity of 440 MW or more as certified by an officer not below the rank of a Joint Secretary to the Government of India in the Department of Atomic Energy. Requirement of law is that described goods as specified in List 43 in the notification should be imported for the purpose of setting up of nuclear projects. Such fact is not in dispute. The second condition is that projects should be of 440 MW. That is also not disputed. The last condition is that the requirement of the goods as well as the capacity is to be certified by a specified officer of Govt. of India which is also not disputed. Appellant says that the goods imported was within the knowledge of the nuclear project authority. They were the essential party to the import since their name appears in the Bills of Entry also. He demonstrates that the goods were imported on account of the nuclear project. The sum and substance of the requirement of the notification is that the goods is subjected to exemption but not the person who imported. Therefore, without any doubt as to the import of the goods and use thereof in the Nuclear Project as per certificate issued by the Notified Authority not disputed by Revenue, there cannot be denial of benefit of the notification to the appellant - appeal allowed. So far as the project import benefit is concerned, in view of grant of benefit under the notification, that ipsofacto allows such benefit. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Benefit of Notification No.21/2002-Cus. dt. 1.3.2002 for goods used in a Nuclear Power Project.
2. Interpretation of conditions under the notification for exemption eligibility.
3. Certification requirements for goods and project capacity under the notification.
4. Dispute over denial of benefit under the notification by the authorities.
5. Grant of benefit under the project import scheme.

Issue 1: Benefit of Notification No.21/2002-Cus. dt. 1.3.2002 for goods used in a Nuclear Power Project

The appellant contended that despite being a contractor for the nuclear project, the goods imported for the project were utilized by them, justifying their eligibility for the notification's benefits. The Revenue, however, supported the decisions of the lower authorities denying the benefit.

Issue 2: Interpretation of conditions under the notification for exemption eligibility

The show cause notice alleged non-compliance with Condition No.87 of the notification, specifying that the exemption applied only if goods of Chapter Heading 98.01 were imported by specific entities. The appellant argued that the use of goods by any contractor for the project should not negate the benefit, as the notification focused on the goods' nature and purpose rather than the importer.

Issue 3: Certification requirements for goods and project capacity under the notification

The notification required the imported goods to be for setting up a nuclear project with a capacity of 440 MW or more, certified by a designated officer. The appellant demonstrated that the goods were imported for the project, as evidenced by import documents and certification, fulfilling the notification's conditions.

Issue 4: Dispute over denial of benefit under the notification by the authorities

The Tribunal emphasized that the essence of the notification was the exemption of goods used for the nuclear project, not dependent on the importer. As the goods were imported for the project and their use certified by the relevant authority, the appellant was deemed eligible for the notification's benefits, leading to the allowance of the appeal.

Issue 5: Grant of benefit under the project import scheme

Following the decision on the first appeal, the Tribunal extended the benefit of the notification to another appeal concerning goods intended for the nuclear project, affirming the entitlement of the appellant to the benefits under the notification and the project import scheme.

In conclusion, the Tribunal ruled in favor of the appellant, allowing both appeals based on the proper interpretation of the notification's conditions and the certification of goods imported for the nuclear project. The judgment underscored that the focus was on the nature and use of the goods rather than the importer, ensuring the appellant's eligibility for the exemption benefits.