2017 (9) TMI 1277 - AT - Customs

Benefit of N/N. 21/2002-Cus - the appellant had claimed the exemption of the imported goods under Sl.No.80A of the N/N. 21/2002-Cus. From the facts, it emerges that this was also initially allowed by the department. It was only later that the appellant changed their claim to benefit of Sl.No.80(B) of the notification - denial on the ground that procedures set out in IGCRDMEG Rules were not followed - whether the IGCRDMEG Rules, 1996 will have the effect of denying the benefit extended under exemption notification? Held that - there is no post-import condition for Sl.No.80(A). The requirement of following procedure laid down in IGCRDMEG Rules comes into the picture only when the goods are imported under claim of benefit under Sl.No.80(B). The appellant has a point that when the goods had been imported with initial claim of benefit under Sl.No.80(A), there would not have been any inkling of the requirement of the said rules. For this reason itself, appellant cannot be faulted for not having taken correct registration and filed declaration as provided for in the said Rules. In any case, appellant have submitted letter of the jurisdictional Superintendent of Central Excise dt. 13.1.2006 confirming the use of the imported goods in the manufacture as required. The purpose of the IGCRDMEG Rules is to ensure mandate of the import and its manufacture and its subsequent processing etc. without obviating commission of fraud etc. There is no such allegation here. The usage of the imported goods have been sufficiently established which would be sufficient compliance of the condition of the notification. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Claim of notification benefit under different entries.
2. Compliance with IGCRDMEG Rules for exemption.
3. Interpretation of Notification No.21/2002-Cus entries.
4. Impact of non-following of procedure on notification benefit.
5. Analysis of case law and compliance with rules.

Analysis:
1. The case involved the appellant importing goods and claiming the benefit of Notification No.21/2002-Cus under the wrong entry initially, leading to subsequent correction to claim under a different entry. The dispute arose due to non-compliance with the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 (IGCRDMEG Rules).

2. The core issue was whether the IGCRDMEG Rules, 1996 could deny the benefit extended under the exemption notification. The appellant's failure to follow the rules at the time of clearance was a significant factor leading to the demand of differential duty under Section 28(1) of the Customs Act, 1962.

3. Entry Sl.No.80(A) and Sl.No.80(B) of Notification No.21/2002-Cus were crucial in determining the eligibility for the notification benefit. The requirement of following the procedures laid down in the IGCRDMEG Rules only applied when goods were imported under the claim of benefit under Sl.No.80(B), not under Sl.No.80(A).

4. The Tribunal found that the appellant, who initially claimed benefit under Sl.No.80(A), could not be faulted for not following the procedures of the IGCRDMEG Rules. The appellant's submission of certificates confirming the use of imported goods in manufacturing as required under the notification was considered sufficient compliance.

5. The Tribunal referred to a case law to support the view that compliance with impossible conditions due to actions of the revenue should be considered dispensed with. In this case, there was substantial compliance with the rules by the appellant, as evidenced by the usage of imported goods for the intended purpose, leading to the appeal being allowed with consequential relief.

This detailed analysis of the judgment highlights the issues, arguments presented by both sides, interpretation of relevant rules and notifications, and the ultimate decision of the Tribunal based on the facts and legal principles involved in the case.