9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (8) TMI 1214 - HC - CustomsInterpretation of the condition relating to ''use of the goods for specified purpose'' - import of Rotor Blades from China for manufacture and installation of 26 Windmills - exemption of basic customs duty under Serial No.362(3) of Notification No.12/2012 Cus, dated 17.03.2012 and exemption of special additional duty under Notification No.21/2012 Cus, dated 17.03.2012 - eligibility for exemption from special additional duty under Clause 14C of Notification No.21/2012, dated 17.03.2012. The petitioner submitted necessary certificate from the Ministry of Non-Conventional Energy, Government of India, and gave an undertaking that they would use the imported goods for the ''specified purpose''. HELD THAT - The respondent admits that the petitioner is engaged in the business of manufacture and installation of Wind Operated Electricity Generators, for which, they have imported Rotor Blades - Parts of Wind Operated Electricity Generators and filed three bills of entry through their Customs Broker, by availing Basic Customs Duty BCD concession under Sl.No.362(3) of the Customs Notification No.12/2012-Cus., dated 17.03.2012 (read with Condition No.45) and exemption from additional duty of customs under Sl.No. 14-C of the Customs Notification No.21/2012-Cus, dated 17.03.2012, as amended (read with condition No.46 of the Customs Notification No.12/2012- Cus, dated 17.03.2012). The sale of Rotor Blades does not bar the importer to avail credit benefits, who sells it to his customer. The importer still have the contractual responsibility of manufacturing (assembly, erection and installation) of the Windmill at the customer's site, as they are the manufactures of Wind Turbines. As per the contract terms, the full value of the invoices paid only on successful commissioning of Windmills, not by invoice wise. It is an admitted fact that the petitioner used the Rotor Blades only in the manufacturing of Wind Operated Electricity Generators and further, Rotor Blades is not used for any other purpose. The only objection is that, clause (b) of Condition No.45 of Notification No.12/2012-Cus, dated 17.03.2012, is not followed for the reason that the petitioner/importer, shall not use them for specific purpose. In this case, it has been used for the specific purpose in the Windmill. It is only the word ''he'' is stressed against the petitioner. This cannot be looked into in isolation and it has to be considered as a whole. The petitioner had been awarded Turnkey project and there were two contracts and one of the contracts is for erection, installation and commission. This needs expertise. It is a known fact that the Windmill has to be necessarily erected only in the site. It cannot be assembled in a factory and thereafter, moved to the site, which is impracticable. The imported Rotor Blades, thus, need no customization and mechanization. Hence, by raising an invoice in the name of his client namely, Sun Photo Voltaic Energy Private Limited after import and thereafter, transporting the same to the customer's site is only an notional exercise, by that alone, it cannot be said that the petitioner is not the importer and he is the person, who has used the same for a specific purpose, for which, it was imported. The payment to the petitioner is not on invoice to invoice basis, it is a turnkey project, wherein, the payments made at stages, which is no way correlated to the invoices raised. Petition allowed.
Issues Involved:
1. Interpretation of the condition relating to "use of the goods for specified purpose" under the exemption Notification No.12/2012-Cus. 2. Allegations of suppression of facts by the petitioner. 3. Eligibility of the petitioner for customs duty exemption. 4. Availability of an alternative remedy and the appropriateness of invoking writ jurisdiction. Detailed Analysis: 1. Interpretation of the Condition Relating to "Use of the Goods for Specified Purpose": The petitioner, engaged in the manufacture, erection, installation, and commissioning of Wind Operated Electricity Generators (WOEG), imported Rotor Blades availing customs duty exemptions under Notification No.12/2012-Cus. The exemption is contingent on the goods being used in the manufacture of Windmills. The petitioner argued that the sale of Rotor Blades to their client does not bar them from availing the exemption since they retained the contractual responsibility of manufacturing the Windmill at the client's site. The court noted that the Notification does not explicitly prohibit the sale of goods before their utilization in assembly and erection. The petitioner fulfilled the condition by using the Rotor Blades for the specified purpose at the customer's site, thus complying with the exemption requirements. 2. Allegations of Suppression of Facts: The respondent issued a show cause notice alleging suppression of facts and demanded differential customs duty, invoking the extended period of limitation under Section 28(4) of the Customs Act, 1962. The petitioner refuted these allegations, citing various judicial precedents that require something positive beyond mere inaction or failure to constitute suppression. The court found no evidence of deliberate withholding of information by the petitioner, thus rejecting the allegations of suppression. 3. Eligibility for Customs Duty Exemption: The respondent contended that the petitioner did not comply with the condition of using the imported goods for the specified purpose, as the goods were sold to the client. The court, however, observed that the goods were indeed used for the specified purpose in the manufacture of Windmills at the client's site. The sale of Rotor Blades did not negate the petitioner's eligibility for the exemption since the petitioner retained responsibility for the complete assembly and commissioning of the Windmills. The court emphasized that the petitioner's actions aligned with the intent of the exemption Notification. 4. Availability of an Alternative Remedy: The respondent argued that the petitioner should have exhausted the alternative remedy under Section 129 A(1) of the Customs Act, 1962, instead of directly approaching the court. The petitioner countered by citing judicial precedents that allow for the invocation of writ jurisdiction in cases of unfairness, unreasonableness, or violation of principles of natural justice. The court agreed with the petitioner, noting that the impugned order was based on a misinterpretation of the exemption Notification and that the petitioner's approach to the court was justified. Conclusion: The court quashed the impugned order dated 19.12.2018, holding that the petitioner complied with the conditions of the exemption Notification by using the imported Rotor Blades for the specified purpose in the manufacture of Windmills. The allegations of suppression were unfounded, and the petitioner was eligible for the customs duty exemption. The court also found it appropriate to entertain the writ petition despite the availability of an alternative remedy. The writ petition was allowed, and the connected miscellaneous petition was closed.
|
