2020 (3) TMI 768 - AT - Customs

Import of telecom cables - Benefit of N/N. 25/2005-Cus. dated 01.03.2005 - benefit under Sl.No.28 of the said notification has been denied by the department alleging that the cables are capable of carrying more than 80 Volts - HELD THAT - The very same issue as to whether the appellant is eligible for exemption under Sl.No.28 and Sl.No.33 was considered by the Tribunal in the appellant s own case M/S. VOLEX INTERCONNECT (INDIA) PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS, CHENNAI 2018 (9) TMI 1156 - CESTAT CHENNAI . The Tribunal in the said case disallowed the claim of the appellant under Sl.No.28. However after placing reliance on the decision of the Hon ble Supreme Court in the case of FORMICA INDIA DIVISION VERSUS COLLECTOR OF CENTRAL EXCISE 1995 (3) TMI 98 - SUPREME COURT the claim of benefit exemption under S.No.33 of the very same notification was allowed. The appellant would be eligible for benefit under Sl.No.33 of the Notification No.25/2005 - demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Eligibility for exemption under Sl.No.28 of Notification No.25/2005-Cus.
2. Compliance with procedural requirements under Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 for claiming exemption under Sl.No.33.

Issue 1: Eligibility for exemption under Sl.No.28 of Notification No.25/2005-Cus:
The case involved the classification of imported telecom cables by M/s. Volex Interconnect (India) Private Limited under CTH 8544 4999 and the claimed BCD exemption under Sl.No.28 of Notification No.25/2005-Cus. The department initiated investigations, issuing a Show Cause Notice denying the exemption on the grounds that the cables could operate above 80V, were misdeclared, and questioned the necessity of separate entries under Sl.No.28 & 29. The Commissioner and Commissioner (Appeals) affirmed the denial, leading to the current appeal. The appellant argued that even if the cables could carry more than 80V, they were eligible since they were used in telecom equipment with operating voltage below 80V. The appellant emphasized the wording of Sl.No.28, contending that the exemption pertains to cables used in less than 80V equipment, not requiring the cables themselves to be below 80V. The appellant also presented an alternative claim under Sl.No.33, supported by previous Tribunal decisions and legal precedents.

Issue 2: Compliance with procedural requirements for exemption under Sl.No.33:
The appellant, in the alternative, sought exemption under Sl.No.33 of the same notification. The appellant referenced a previous Tribunal decision and a recent judgment by the jurisdictional High Court to support their position. The appellant argued that the decision in Formica India Division Vs CCE - 1995 (77) ELT 511 (S.C) should apply, emphasizing that the appellant substantially complied with the conditions under the 1996 Rules, despite the claim being disallowed by the department. The appellant highlighted the distinction between the procedural requirements for Sl.No.28 and Sl.No.33, asserting that since the claim under Sl.No.33 was raised subsequently, full compliance with the 1996 Rules could not be expected. The department, represented by the AC (AR), supported the findings of the impugned order, contending that the appellant failed to meet the requirements for exemption under both Sl.No.28 and Sl.No.33.

Judgment:
The Tribunal reviewed the appellant's eligibility for exemptions under Sl.No.28 and Sl.No.33 in light of previous decisions and legal interpretations. Referring to the appellant's previous case and the decision in Formica India Division, the Tribunal held that while the appellant could not avail the exemption under Sl.No.28, they were eligible for the benefit under Sl.No.33 of the Notification No.25/2005-Cus. The Tribunal emphasized the importance of compliance with procedural requirements and distinguished between the two exemption categories. Consequently, the impugned order disallowing the exemption benefits was set aside, including the demand, interest, and penalties imposed. The appeal was allowed, granting consequential relief as per the law.

This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, legal interpretations, and the final decision rendered by the Tribunal.