2017 (4) TMI 198 - AT - Customs

Benefit of N/N. 25/99-Cus. Sr. No. 143 and sr. no. 87 - denial of sr. 143 on the ground that Description of the goods are not matching serial No. 143 of the said notification - denial of sr. 87 on the ground that goods are not used for manufacturing of Lead tabs for electro lytic capacitors and is used in Plastic Film capacitors - Held that - the above observation is misplaced in so far as the said Notification is not the end use based notification. Anybody can import the said goods so long as they confirmed to the description given in Sr. No. 87 of List A of the Notification - Sr. No. 143 of List A squarely covers the product and the use. Sr. No. 143 specifically covers the items used in the manufacture of plastic film capacitors, which the appellants manufacture. The only reason, the benefit of Sr. No. 143 has been denied is that the description of the goods does not say that the said product is of non-alloy steel - in absence of any evidence to show that the SPCS was of alloy steel variety, the benefit of Sr. No. 143 of List A of N/N. 25/99-Cus. cannot be denied - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of exemption under Sr. No. 143 of List A of Notification No. 25/99-Cus.
2. Denial of benefit under Entry No. 87 of the same Notification.

Analysis:
1. The appellant, M/s. Krishnonics Pvt. Ltd., imported solder plated copper covered steel wire (SPCS) and claimed exemption under Sr. No. 143 of List A of Notification No. 25/99-Cus. The Commissioner (Appeals) denied the benefit citing that the goods must be lead wires of iron or non-alloy steel plated or coated with other base metals, and evidence to substantiate the composition was lacking. The appellant also argued for coverage under Entry No. 87, which was also denied based on the use for manufacturing electrolytic capacitors instead of plastic film capacitors. However, the Tribunal found that Sr. No. 143 specifically covers items used in the manufacture of plastic film capacitors, which the appellants produce. The Tribunal noted that the description of the goods did not specify them as non-alloy steel, but since there was no evidence to show the SPCS was of alloy steel variety, the benefit under Sr. No. 143 could not be denied. The Order-in-Original did not raise this ground, and without evidence of alloy steel, the denial was unfounded.

2. The benefit under Entry No. 87 of the Notification was denied based on the misconception that it was only available for manufacturing electrolytic capacitors, whereas the appellants were manufacturing plastic film capacitors. The Tribunal clarified that the Notification was not end-use based, and anyone could import the goods as long as they matched the description in Sr. No. 87 of List A. The Tribunal emphasized that Sr. No. 143 of List A covered the product and its use, including items used in plastic film capacitors, which the appellants manufactured. The denial based on the misconception of end-use was deemed misplaced, and the benefit under Sr. No. 143 was allowed. The Tribunal highlighted that the revenue could have tested the goods to confirm the alloy steel variety, but in the absence of such evidence, the denial of benefit was not justified.

In conclusion, the Tribunal allowed the appeal on the basis that the imported goods met the criteria under Sr. No. 143 of List A of Notification No. 25/99-Cus, as there was no evidence to prove the SPCS was of alloy steel variety. The denial of benefits under Entry No. 87 was overturned as the Notification was not end-use based, and the goods matched the description under Sr. No. 143 for manufacturing plastic film capacitors.