2017 (9) TMI 1453 - AT - Customs

Benefits of N/N. 21/2002 dated 1.3.2002 - concessional rate of duty - denial on the ground that the respondents have not complied condition of producing the requisite certificate at the time of import - Held that - the respondents have complied with the condition of producing the certificate at the time of filing the appeal itself. This being the case, the delay in producing the certificate has been rightly condoned by the Commissioner (Appeals) and has given the benefit of the Notification to the respondents. Denial also on the ground that catalyst imported cannot be considered as raw materials or consumables etc. specified in Notification - Held that - The Hon ble Supreme Court in the case of COLLECTOR OF C. EX. Versus BALLARPUR INDUSTRIES LTD. 1989 (9) TMI 102 - SUPREME COURT OF INDIA , observed that sodium sulphate can be considered as a raw material - the ground of the department that the respondents are not eligible for notification for the reason that the catalyst imported by them cannot be considered as raw material is not tenable and therefore rejected. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Compliance with the condition of producing requisite certificate for availing concessional duty.
2. Classification of imported catalyst as raw material for the purpose of notification eligibility.

Analysis:
1. The case involved the import of Pyro Blocks / Catalysts by the respondents for a fertilizer plant, assessed at different rates under Notification No. 21/2002. The original authority denied concessional duty benefit as the required certificate was not produced at the time of import. However, the respondents later produced the certificate during the appeal process. The Commissioner (Appeals) allowed the appeal, considering the certificate's production as compliance with the condition for concessional duty eligibility. The department argued that the delay in producing the certificate should not be condoned and that the benefit was only for raw materials, not catalysts.

2. The department contended that catalysts imported by the respondents did not qualify as raw materials under the notification. The respondents argued that the catalyst was a raw material for the fertilizer plant's catalytic converter, citing precedents where chemicals were considered raw materials. The Tribunal noted that the Supreme Court had previously ruled on similar cases, determining that certain chemicals could be classified as raw materials even if they did not remain in the final product. The Tribunal rejected the department's argument, affirming that the catalyst could be considered a raw material for the fertilizer manufacturing process.

3. The Tribunal observed that the requirement to produce the certificate at the time of import did not specify a time limit, and the respondents had eventually submitted the certificate during the appeal. As the respondents had fulfilled the condition by producing the certificate before the appeal, the Commissioner (Appeals) rightly condoned the delay and granted the benefit of the notification. Consequently, the Tribunal upheld the Commissioner's decision, dismissing the department's appeals challenging the concessional duty eligibility and classification of catalyst as a raw material.

This detailed analysis highlights the key legal arguments, precedents, and considerations made by the Tribunal in resolving the issues raised in the case concerning compliance with conditions for concessional duty and the classification of imported catalyst as a raw material for notification eligibility.