2017 (1) TMI 1120 - AT - Customs

STPI - Benefit of N/N. 52/03-CUS dated 31.03.2003 - import of Data Comp equipments - denial on the ground that the appellant cannot be termed as user industry; they are neither developing the software nor exporting it - Held that - the benefit herein is for the goods and not for the importer - the importer alone is entitled to such benefit and further, such importer should have been authorized by the Development Commissioner to establish the unit for the purposes specified in clauses (a) to (e) of the relevant paragraph of the notification - in the General Exemption No. 66, clause (a)(ii) of the notification exempts manufacture or development of software etc., for export by a STP unit or a unit in Software Technology Park Complex under the export-oriented scheme and not by a software technology park perse - the exemption can only be claimed by an importer, who has been granted necessary permission to import the said goods by Interministerial Standing Committee for 100% EOCJ, ETC. - on merits, the appellant does not have a case. Extended period of limitation - Held that - the department was very much aware of the fact of import between April 2003 to July 2005. The SCN covers the period from April 2003 to July 2005. None the less the department did not issue the SCN till 15.02.2006 and that too was issued invoking extended period of limitation. The appellant has informed the Customs department furnishing each B/E that goods are imported claiming concession of duty under N/N. 52/03-CUS. Therefore the appellant cannot be said to have suppressed facts - SCN time barred and the proceedings set aside. Appeal allowed on the ground of limitation - decided in favor of appellant.

Summary

Issues: Appeal concerning import of Data Comp equipments claiming full exemption under Notification No. 52/03-CUS dated 31.03.2003; denial of notification benefit by the Department; eligibility for duty exemption under notification; imposition of penalty and interest; limitation period for issuing Show Cause Notice.

Analysis:

1. The issue in appeal revolves around the import of Data Comp equipments seeking full exemption under Notification No. 52/03-CUS. The Department proposed denial of the notification benefit to the appellant, alleging they are not a user industry developing or exporting software, thus ineligible for duty exemption under the said notification. The Commissioner ordered cancellation of warehouse license, confiscation of goods, redemption on fine payment, and demanded duty with interest, along with imposing penalties. The appellant argued for the concessional benefit under the notification, emphasizing the nature of the imported goods and the awareness of customs authorities regarding the claim for notification benefits since the import stage.

2. The Advocate for the appellant highlighted the provisions of Notification No. 52/2003, asserting that the goods, Datacom Equipment, are essential for setting up telematic infrastructure used by STPI units for software export, making the appellant eligible for the notification benefits. Conversely, the Assistant Commissioner reiterated the correctness of the impugned order, contesting the appellant's eligibility for duty exemption under the notification.

3. Upon hearing both sides, it was established that the benefit under Notification 52/2003-Cus is for the importer authorized by the Development Commissioner to establish the unit for specified purposes. The conditions of the notification clarified that the importer alone is entitled to the benefit, and the exemption is for the importer, not the software technology park itself. The appellant's alternative plea for exemption under Notification 153/93-CUS was also dismissed, as it required permission from the Interministerial Standing Committee, which the appellant lacked.

4. The appellant raised the issue of limitation, arguing that the customs department was aware of the import and the claim for duty concession under Notification No. 52/03-CUS since April 2003 to July 2005, as evidenced by certificates provided during import clearance. Despite this awareness, the Show Cause Notice was only issued in February 2006, invoking an extended period of limitation. The Tribunal found the proceedings time-barred, as the SCN was issued beyond the statutory limitation period, and thus set aside the impugned order solely on the ground of limitation. The appeal was allowed based on the limitation issue, granting consequential reliefs as necessary.