2019 (4) TMI 1711 - AT - Customs

Benefit under Notification No. 93/2004-Cus. - import of relevant synthetic cloth for manufacture and export of synthetic slippers/ sandals with PU sole under SION norms A3541 - Revenue is of the view that the goods are classifiable under Chapter heading 39204900 as against the heading 59031090 mentioned in the license - HELD THAT - The classification of goods specified in SION norms is not relevant unless it is specifically mentioned in the SION norms. The committee at Ministry of Commerce has also clarified that any change in the ITC (HS) Code has no bearing on the benefits to be given under advance authorization issued under Para 4.7 of HBP. In the instant case the committee has clarified that any change in the ITC (HS) Code has no bearing on the benefits to be given under advance authorization issued under Para 4.7 of HBP. In this circumstance, the amendment made to the license will have a retrospective effect and the benefit of the notification cannot be denied on the ground that the classification of the goods did not match the classification specified in the advance license as long as the description of the goods matches with that prescribed in the license. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Benefit denial under Notification No. 93/2004-Cus for import of goods based on classification discrepancy.

Analysis:
The case involved appeals by M/s. Condor Footwear (I) Limited against the denial of benefit under Notification No. 93/2004-Cus for importing synthetic cloth for manufacturing synthetic slippers/sandals with PU sole. The appellant had obtained a license from DGFT under SION norms A3541, allowing import of relevant synthetic cloth. The Revenue, however, classified the imported goods under a different heading, leading to benefit denial. The appellant subsequently amended the license to include the correct heading, but the Revenue rejected the amendment as non-retrospective. The Tribunal considered the SION norms, the license description, and the retrospective effect of amendments in determining the benefit eligibility.

The Tribunal noted that the SION norms did not specify any heading for the imported goods, and the Notification No. 93/2004-Cus did not mention headings or sub-headings against permitted goods. The appellant argued that the goods' classification should not affect benefit eligibility if covered by SION norms. The Tribunal reviewed the minutes of a meeting where the Ministry of Commerce clarified that changes in the ITC (HS) Code do not impact benefits under the advance authorization. This clarification supported the appellant's position that classification discrepancies should not affect benefit entitlement.

The Revenue relied on a High Court decision involving substantial amendments, unlike the procedural amendment in this case. The Tribunal distinguished another High Court decision by emphasizing the intent behind license amendments. Citing a Bombay High Court case, the Tribunal held that the license amendment, aimed at aligning the ITC (HS) Code with the actual goods description, should have a retrospective effect. Therefore, the Tribunal allowed the appeals, emphasizing that as long as the goods' description matched that in the license, benefit denial based on classification discrepancies was unjustified.

In conclusion, the Tribunal's decision favored the appellant, emphasizing that the retrospective effect of license amendments, in line with the goods' actual description, should determine benefit eligibility under Notification No. 93/2004-Cus. The judgment highlighted the importance of aligning license details with actual imports and the relevance of SION norms in determining benefit entitlement despite classification discrepancies.