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2017 (3) TMI 1119 - AT - CustomsBenefit of exemption N/N. 25/2005-Cus dated 1st March 2005 - denial on the ground that the importer did not have the facility for conversion of the copper cathode to wires - the imports are subject to the condition that the procedure laid down in the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Goods) Rules 1996 is complied with. The contention of the Learned Counsel is that the rules do not restrict the entire activity to the importer s factory and that there is no bar on use of other premises for manufacture of the goods which ultimately gets used in the production of export goods - Held that - the benefit of notification cannot be denied merely on the ground that the importer does not possess the facility to manufacture or that there is some apprehension that the importer may not be able to comply with the conditions laid down in the Rules. That is not contemplated in law and the denial of benefit is without merit - reliance was placed in the case of TAMIL TRADING CORPORATION Versus COMMISSIONER OF C. EX., TUTICORIN 2005 (12) TMI 163 - CESTAT, CHENNAI - benefit allowed - appeal allowed - decided in favor of appellant.
Issues involved:
Appeal against denial of benefit of exemption notification no. 25/2005-Cus dated 1st March 2005 for imported copper cathodes used in manufacturing jelly filled telephone cables. Analysis: 1. Issue of Exemption Notification Denial: The appellant, a cable manufacturer, imported copper cathodes for manufacturing telephone cables and claimed exemption under notification no. 25/2005-Cus. The exemption was denied due to the importer's alleged lack of facility for converting the cathodes into wires. The appellant argued that the rules do not restrict manufacturing activities to the importer's factory only. The Tribunal referred to previous cases to support the contention that manufacturing can be carried out on behalf of the importer at other premises, and denial of exemption based on lack of manufacturing facility is unjustified. 2. Interpretation of Rules: The Tribunal analyzed Rule 3 of the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Goods) Rules, 1996, which requires a manufacturer to obtain registration from the Assistant Commissioner of Central Excise having jurisdiction over his factory to avail exemption benefits. Lower authorities interpreted "his factory" strictly to mean that the importer must own the factory where imported goods are used. However, the Tribunal disagreed, stating that the rule should be interpreted in line with liberalization policies, allowing manufacturers to utilize facilities of other entities for manufacturing without owning a factory. 3. Spirit vs. Letter of the Law: The Tribunal emphasized the importance of interpreting laws based on their spirit rather than a strict literal interpretation. Referring to previous cases, the Tribunal highlighted that the intention behind laws and notifications should guide interpretations, especially in cases where strict adherence to the letter of the law may lead to unjust results. The Tribunal emphasized that the denial of benefits should not be based on speculative apprehensions about the importer's ability to comply with conditions. 4. Precedent and Supporting Decisions: The Tribunal cited various cases, such as Tamil Trading Corporation v. Commissioner Of Central Excise and Commissioner of Central Excise v. Electronic Research Ltd, to support its decision. These cases emphasized the need to consider the intention behind laws and notifications, allowing for a pragmatic interpretation that aligns with the broader objectives of trade policies. The Tribunal concluded that denial of exemption benefits without valid reasons is unjustified and allowed the appeal, setting aside the impugned order. In conclusion, the judgment highlighted the importance of interpreting laws in a manner that aligns with the underlying objectives and spirit of the regulations, ensuring fair treatment and avoiding unjust denials of benefits based on technicalities or speculative concerns.
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