2018 (3) TMI 567 - AT - Customs

Applicability of Advance ruling - Exemption of Additional Duty of Customs - N/N. 45/2005-Cus dated 16/05/2005 - it was the modus-operandi to evade payment of SAD and as a result, the appellants had made arrangement that for some time the goods would be kept in a warehouse which was located in FTWZ Khurja and there was no need for such movement of goods into FTWZ Khurja. - Held that - as provided for in Section 28J of Customs Act, 1962, the advance ruling pronounced by the authority under Section 28-I shall be binding only on the applicant who had sought it. Therefore, the said advance ruling is not applicable to the present appellants - appeal dismissed - decided against appellant.

Summary

Issues: Eligibility for exemption of Additional Duty of Customs under Notification NO. 45/2005-Cus for an importer without a manufacturing unit in SEZ.

Analysis:
1. Issue of Eligibility for Exemption: The core issue in this case was whether an importer without a manufacturing unit in a Special Economic Zone (SEZ) is eligible for exemption of Additional Duty of Customs under Sub-section (5) of Section 3 of Customs Tariff Act, 1975, as per Notification NO. 45/2005-Cus dated 16/05/2005. The appellants, M/s Zamil Air Conditioners Pvt. Ltd. and M/s Lloyd Electric & Engineering Ltd., imported goods for their own use in the manufacture of excisable goods in their factory located in the Domestic Tariff Area (DTA). The goods were routed through a warehouse in a Foreign Trade Warehousing Zone (FTWZ) with SEZ status. The Commissioner (Appeals) emphasized that the imported goods were not intended for sale but for manufacturing, and the use of FTWZ as a port and warehousing facility did not entitle the appellants to claim exemption from the Additional Duty of Customs.

2. Appellants' Arguments: The appellants argued that since the goods were removed from FTWZ Khurja, designated as an SEZ, they were entitled to the benefit of the exemption under Notification NO. 45/2005-Cus. They also cited an advanced ruling reported at 2014 (304) ELT 452 to support their claim.

3. Revenue's Position: The Revenue contended that the appellants did not have a manufacturing unit in FTWZ Khurja or any other SEZ, and therefore, there was no requirement to move goods to FTWZ Khurja upon importation. They alleged that the appellants used the FTWZ as a means to evade payment of the Additional Duty of Customs by temporarily warehousing the goods. The Revenue argued that the appellants could have directly cleared the goods for home consumption and used them in their manufacturing units.

4. Decision and Rationale: The Tribunal examined the contentions of both parties and noted that the advance ruling cited by the appellants was binding only on the applicant who had sought it, and not applicable to the present appellants. The Tribunal upheld the order of the ld. Commissioner (Appeals) and rejected the appeals, emphasizing that the use of FTWZ as a port and warehousing facility did not entitle the appellants to claim exemption from the Additional Duty of Customs under the given circumstances.

In conclusion, the judgment clarified the eligibility criteria for claiming exemption from the Additional Duty of Customs under Notification NO. 45/2005-Cus for importers without a manufacturing unit in SEZ, emphasizing the importance of the intended use of imported goods and the statutory provisions governing such exemptions.