2019 (1) TMI 1046 - AT - Customs

Import of Off Grade Copper Cathode under Advance Authorization - Benefit of N/N. 99/2009-Cus. dated 11.09.2009 denied on the ground that the imported product namely Copper Cathodes being the output/export product/end product does not figure in the Foreign Trade Policy (FTP) Vol. 2 Input-Output Norms for duty exemption schemes - Held that - The issue in dispute concerning eligibility to import Off Grade Copper Cathode has been more than clarified by the DGFT vide their letter dated 07.05.2013 which inter alia gratifies the import of the Off Grade Copper Cathode - Both the conditions namely 1(iii) of Notification No. 99/2009-Cus. as well as paragraph 4.24 A(a)(iv) of HBP v.1 require the authorization holder to submit an application in Aayat Niryat Form along with prescribed documents before making the shipment. The phrase before making the shipment is only to be interpreted as before making the first export shipment and surely not before the receipt of the first import of raw material from overseas. The premises on which the ground of appeal has been filed by the Revenue is flawed - appeal dismissed - decided against appellant.

Summary

Issues:
- Eligibility to import Off Grade Copper Cathode under Advance Authorization
- Interpretation of Notification No. 99/2009-Cus. and HBP v.1 requirements

Analysis:
- Eligibility to import Off Grade Copper Cathode under Advance Authorization:
The respondent imported Off Grade Copper Cathode under Advance Authorization, claiming benefits under Notification No. 99/2009-Cus. The Department contended that the product does not align with Foreign Trade Policy norms for duty exemption schemes. The Original Authority denied the exemption benefits and demanded differential duty. On appeal, the Commissioner (Appeals) held that Off Grade Copper Cathode is an input for manufacturing copper rods and wire rods, making the respondent eligible for import. The Commissioner also referenced a DGFT clarification supporting the import of Off Grade Copper Cathode. The Department challenged this decision.

- Interpretation of Notification No. 99/2009-Cus. and HBP v.1 requirements:
During the hearing, the Department argued that since the imported items were finished goods, there couldn't be any Standard Input Output Norms (SION) for them. They highlighted the requirement of self-declaration under Notification No. 99/2009 when SION norms are absent. The respondent's advocates countered, stating that Off Grade Copper Cathode differs significantly from A Grade and can't substitute it. They referenced the DGFT clarification and emphasized the timing of submitting Aayat Niryat Form to DGFT. The Tribunal noted that the DGFT's subsequent letter confirmed the import eligibility of Off Grade Copper Cathode. They clarified that the submission of Aayat Niryat Form should precede the first export shipment, not the first import of raw material. Consequently, the Tribunal found the Department's grounds for appeal flawed and dismissed the appeal.

In conclusion, the Tribunal upheld the respondent's eligibility to import Off Grade Copper Cathode under Advance Authorization, as clarified by the DGFT's letter. They interpreted the requirements of Notification No. 99/2009-Cus. and HBP v.1 regarding document submission before the first export shipment. The appeal by the Department was deemed meritless and subsequently dismissed.