2017 (10) TMI 711 - AT - Customs

Benefit of N/N. 6/2006-CE dated 1.3.2006 - import of combo drives - demand of CVD, cess and additional import duty - Held that - there are no reference in the vast literature available in the public domain on the internet that a combo drive would have to contain of microprocessor or USB flash memory or for that matter a floppy disc drive or hard disc drive. It appears to be absurd to suggest that a combo drive should contain a microprocessor and USB flash memory - there are no ground to interfere with the finding of fact recorded by the lower appellate authority that the combo drives are eligible for concession of duty as per N/N. 6/2006 - benefit of notification allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Eligibility for exemption under Notification No.6/2006 for imported combo drives.
2. Interpretation of the list of items under SI. No.17 of the Notification.
3. Requirement for combo drives to contain all elements from SI.Nos. (a) to (f) for exemption eligibility.

Analysis:
The case revolved around the eligibility of imported combo drives for duty exemption under Notification No.6/2006. The respondents imported combo drives and claimed exemption, which was denied by the department, leading to the imposition of CVD, cess, and additional import duty. The Commissioner (Appeals) allowed the appeal, directing reassessment of the Bill of Entry, stating that the respondents were eligible for the benefit of the notification. The department challenged this decision before the Tribunal.

The department contended that the exemption under Sl. No.17 (g) of Notification No.6/2006 was only applicable to goods combining elements from SI.Nos. (a) to (f) of the said Notification. They argued that since the imported goods did not contain all elements from (a) to (f), they were not eligible for the exemption. However, the Commissioner (Appeals) found in favor of the respondents, emphasizing that the combo drives were capable of various applications in CD and DVD formats, and were commonly recognized as combo drives by the manufacturers and in popular usage.

The Tribunal observed that the department failed to provide written clarification or circular supporting their interpretation that combo drives must contain all elements from (a) to (f) for exemption eligibility. Despite repeated requests, no such documentation was produced. The Commissioner (Appeals) extensively discussed the eligibility of the impugned goods under the Notification, highlighting that the requirement for combo drives to include all items from (a) to (f) of SI. No.17 was not supported by available literature or industry standards.

Ultimately, the Tribunal upheld the decision of the Commissioner (Appeals), dismissing the department's appeal as lacking merit. The Tribunal found no grounds to interfere with the lower appellate authority's conclusion that the combo drives were indeed eligible for the duty concession as per Notification No.6/2006. The case underscored the importance of thorough examination and substantiation of legal contentions in tax matters to establish eligibility for exemptions.