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2018 (10) TMI 108 - AT - Customs100% EOU working under the STP Scheme - benefit of N/N. 52/2003 dt. 31/03/2003 - Import of glazed frames and glass doors - it was held by Department that the said import do not fall in the definition of modular furniture and the said items are not exempted under the N/N. 52/2003-Cus and demanded Customs Duty on the same (Which was earlier foregone) - Extended period of limitation. Held that - The appellants have imported the goods considering the same as modular furniture and have availed the benefit of Notification No.52/2003-Cus. Further we find that in the proforma invoice and sale invoice and Bill of Entry, they have described the goods as parts of modular furniture. Further we find that the STPI authorities have also permitted the import of goods under Customs Notification No.52/2003-Cus after satisfying themselves that the goods were eligible for duty free import and necessary certificate was also issued. Further we find that for availing exemption under Notification No.52/2003-Cus dt. 31/03/2003, two conditions need to be satisfied (a) STPI unit is set up as per the authorization granted by the Development Commissioner / STPI authorities and a certificate is issued by STPI stating that the goods are required to be installed or used in the unit and (b) the import is authorized by the Standing Committee. In the present case, both the conditions have been fulfilled by the appellant and once the Committee has authorized the import, then, in our opinion, the Customs Department later on cannot question the benefit under the Notification. Extended period of limitation - Held that - The Department has not brought any evidence on record to show that there was an element of fraud, collusion or any willful mis-statement or suppression of facts on the part of the appellant justifying the invocation of extended period of limitation - Since all the goods have been procured by obtaining necessary permission from STPI as well as Customs authorities and the Customs was fully aware of the import and therefore it does not lie in the mouth of the Department now to contend that the appellants, hence suppressed the material facts and are not eligible for the benefit of the Notification - entire demand is barred by limitation. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Eligibility of imported goods for duty exemption under Notification No.52/2003-Cus. 2. Interpretation of the term "modular furniture" and its applicability. 3. Validity of demand for customs duty and interest. 4. Invocation of the extended period of limitation. 5. Authority of Customs Department vis-à-vis STPI certification. Detailed Analysis: 1. Eligibility of Imported Goods for Duty Exemption under Notification No.52/2003-Cus: The appellant, a 100% EOU under the STP Scheme, imported goods duty-free based on Notification No.52/2003-Cus. The goods were described as modular workstations and accessories, approved by the Director, STPI, and authorized by the Standing Committee of the Department of Electronics. The Customs Department later demanded customs duty and interest, arguing that the goods did not qualify for the exemption. The Tribunal found that the appellant had complied with all required conditions for duty-free import, including obtaining necessary approvals and certificates from STPI. The Tribunal held that once the Committee authorized the import, the Customs Department could not later question the benefit under the notification. 2. Interpretation of the Term "Modular Furniture" and Its Applicability: The appellant argued that the imported goods, described as modular workstations and accessories, qualified as modular furniture under the notification. The Tribunal noted that the notification exempts items by description rather than chapter heading and that the term "modular furniture" was not statutorily defined. The Tribunal agreed with the appellant's interpretation, stating that the goods, being parts of modular workstations, fell within the commercial sense of modular furniture. The Tribunal cited previous decisions, including GE India Technology Centre Vs. CC, Bangalore, and Cognizant Techno Solutions India P. Ltd. Vs. CC, to support the appellant's claim. 3. Validity of Demand for Customs Duty and Interest: The Tribunal found that the goods were still in the bonded warehouse and had not been cleared for home consumption or removed in contravention of Section 71 of the Customs Act. Therefore, no duty could be demanded. The Tribunal cited decisions like CC, Bangalore Vs. Infosys Technologies Ltd. and DSL Software Vs. CC to support this conclusion. 4. Invocation of the Extended Period of Limitation: The Tribunal held that the extended period of limitation could not be invoked as there was no evidence of fraud, collusion, willful misstatement, or suppression of facts by the appellant. The goods were imported with full knowledge and approval of the Customs authorities, and all necessary documents were submitted. The Tribunal cited DSL Software Ltd. and other cases to conclude that the demand was time-barred. 5. Authority of Customs Department vis-à-vis STPI Certification: The Tribunal emphasized that the STPI certification, which included a member from CBEC, authorized the import under the notification. The Customs Department could not later challenge this authorization without taking steps to cancel it. The Tribunal cited the DSL Software Ltd. case, which held that once the Committee authorized the import, it was not for the Customs authorities to question it post-importation. Conclusion: The Tribunal set aside the impugned order, holding that the appellant was entitled to the benefit of Notification No.52/2003-Cus for the imported goods. The demand for customs duty and interest was invalid, and the invocation of the extended period of limitation was unjustified. The appeal was allowed with consequential relief to the appellant.
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