2020 (9) TMI 560 - AT - Customs

Served Form India Scheme (SFIS) - Exemption of Customs duty under N/N. 92/2004-Cus. dated 10.09.2004 - Import of two golf carts with accessories - restricted goods or not - HELD THAT - The department did not file any appeal against the order dated 26.12.2008 passed by the Commissioner (Appeals) in the first round of litigation. Since the department had not challenged the said order, the original authority as well as the appellate authority cannot go beyond the direction issued by the Commissioner (Appeals). In the present case, DGFT has clarified by issuing various clarifications to the effect that golf carts do not come under the restricted category of vehicles, which is stated in para 3.6.4.5 of the Foreign Trade Policy - Further, the licensing authority, i.e. DGFT, has not taken any action against the appellant for wrongly availing the benefit under the SFIS nor did they take any steps against the appellant. Hence, the Customs authorities cannot refuse exemption to the appellant. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Appeal against rejection of appeal by Commissioner of Customs
- Interpretation of Foreign Trade Policy and Customs Notifications
- Binding nature of DGFT guidelines on Customs authorities

Analysis:
- The appeal was filed against the rejection of the appellant's appeal by the Commissioner of Customs. The case involved the import of golf carts with accessories under a specific license and exemption notification. The appellant imported the golf carts under a license availing exemption but was required to pay duty in cash for vehicles as per the Foreign Trade Policy and Customs Notifications. A show cause notice was issued for confiscation, duty recovery, and penalty. The original authority confiscated the goods, imposed a fine, and penalty. The appellant appealed, and the Commissioner directed a fresh decision considering DGFT's clarifications. The original authority reconfirmed duty, fine, and penalty, which was upheld by the Commissioner, leading to the present appeal.

- The appellant argued that the impugned order did not consider the facts properly and did not follow the Commissioner's direction. They contended that duty credit under SFIS was restricted for vehicle imports as per policy and notifications. The appellant claimed that golf carts were not vehicles under the policy and DGFT had clarified this, which should be binding on Customs. The AR for Revenue defended the order.

- The Tribunal found that the original authority did not follow the Commissioner's direction to decide as per DGFT guidelines. It noted that the DGFT clarifications were binding on Customs as per previous decisions. Since the department did not appeal the earlier order, the authorities could not go against the direction. The Tribunal agreed that the DGFT's clarification on golf carts not being vehicles applied, and since DGFT did not take action against the appellant, Customs could not refuse exemption. Consequently, the impugned order was set aside, and the appeal was allowed with any necessary relief.

This detailed analysis of the judgment covers the issues raised in the appeal comprehensively, addressing the interpretation of relevant policies and the binding nature of DGFT guidelines on Customs authorities.