2017 (4) TMI 417 - AT - Customs

Project import - Exemption from ADD - N/N. 6/2002-CE dt.1.3.2002 - denial on the ground that the device as a whole was not imported - Revenue s objection was that since N/N. 21/2002-Cus. dt. 1.3.2002 was issued for power generation projects under Project Import Registration, simultaneous benefit shall not be allowed under N/N. 6/2002-CE dt.1.3.2002 - whether the Additional Duty of Customs is exempt on Turbine imported through Tuticorin Port in terms of N/N. 6/2002-CE dt. 1.3.2002 while Customs duty exemption under N/N. 21/2002-Cus. dt. 1.3.2002 was granted to the appellant under project import registration? - Held that - exemption is granted at public cost subject to certain conditions, stipulation as well as limitations which cannot be very casually to be applied to interpret the intention of an exemption notification. That requires very strictly interpretation so that exchequer does not suffer by virtue of exemption granted liberally. Law is well settled that if by a prima facie consideration, of exemption is grantable, then liberal approach is permissible. But that is not the case here. Prima facie, Turbine does not produce energy without being integrally connected to other energy producing devices. Therefore any grant of exemption benefit of additional duty of customs to turbine shall defeat purpose of the law and shall cause loss to the public revenue. Accordingly, appellant not being entitled to the grant of exemption under N/N. 6/2002-CE, appeal is dismissed - decided against appellant.

Summary

Issues:
1. Whether the Additional Duty of Customs is exempt on imported turbine under Notification No.6/2002-CE while Customs duty exemption under Notification No.21/2002-Cus. was granted.

Analysis:
1. The appellant imported turbine and generator parts under Project Import Registration, availing duty concessions under Notifications No.21/2002-Cus. and No.6/2002-CE. Revenue denied exemption under No.6/2002-CE during finalization, arguing against simultaneous benefits under both notifications.

2. Appellant contended that there is no legal bar to claim benefits under both notifications independently. Revenue's objection was deemed illogical as the notifications operate in distinct fields, and the device was part of the power generation plant covered by the Project Import Registration.

3. Revenue argued against simultaneous exemptions under both notifications, stating that the specific Project Import Registration notification precludes benefits under any other notification. The Tribunal examined the legislative intent behind the notifications to resolve the conflict.

4. The Tribunal analyzed Notification No.21/2002-Cus. and No.6/2002-CE to determine the scope of exemptions. The relevant parts of both notifications were scrutinized to ascertain whether the turbine imported by the appellant qualified for exemption under No.6/2002-CE.

5. The Tribunal clarified that the dispute centered on the exemption from Additional Duty of Customs for the turbine under No.6/2002-CE while Customs duty exemption was granted under No.21/2002-Cus., focusing on the legislative intent behind both notifications.

6. The Tribunal observed that the turbine did not qualify for exemption under No.6/2002-CE as it was not a total device capable of producing energy, contrary to the intention of the Project Import Registration and the scope of the notification. Granting exemption would defeat the legislative purpose and cause revenue loss.

7. The Tribunal emphasized the strict interpretation of exemption notifications to prevent revenue loss, especially when the device does not independently produce energy. Citing precedent, the Tribunal dismissed the appeal based on the ineligibility of the turbine for exemption.

8. The Tribunal referenced a prior decision and Supreme Court ruling to support the dismissal, emphasizing that turbines are not eligible for exemption. Revenue's request to settle the issue of claims under different notifications was deemed unnecessary at that stage.