2024 (5) TMI 1283 - AT - Customs

Exemption of goods of foreign origin imported for repairs and return under Notification No.153/1994 - Imports aircraft parts meant for repair / overhaul of aircraft engines - Notification No.21/2002-Cus. for spare parts of aeroplanes under specific conditions - Whether the appellant is eligible for the benefit of Notification No.153/1994 - HELD THAT - As seen from the Notification, the goods that can be imported are not specified but only states that they should be articles of foreign origin which are being imported for repairs and return. The appellant s letter dated 22.02.2011 clearly stated that spare parts would be cleared under ex-bond Bill of Entry for being used for repairing the engine which is imported under Notification No.153/1994 and these engines along with the spares are being exported. The observation by the original authority that the above Notification is applicable only to import of goods of foreign origin which themselves were to be repaired and returned after repairs and not for goods imported to be used for carrying out repairs cannot be inferred from the said Notification. As seen from the Notification No.21/2002-Cus., the spare parts imported for repair/replacement of the engines were otherwise also exempted even if they were cleared for home consumption; hence, the question of demanding duty does not arise. In the instant case, admittedly, the goods were bonded and after repairs were exported. Accordingly, we find that the appellant was eligible for the benefit of the Notification No.153/1994 13.07.1994 even for the spares which were being imported and used in the engines which are exported. Thus, the impugned order is set aside and the appeals are allowed.

Summary

Issues involved: Interpretation of Notification No.153/1994 dated 13.07.1994 for exemption of goods of foreign origin imported for repairs and return; eligibility for benefit of Notification No.21/2002-Cus. dated 01.03.2002 for spare parts of aeroplanes under specific conditions.

Summary:
The case involved M/s. Varman Aviation Pvt. Ltd. engaged in repair/overhauling of imported aero engines, importing spare parts under bond for repair/overhaul, and claiming duty exemption under Notification No.153/1994. The Original Authority denied benefit citing spare parts not meant for repair as per Notification conditions. The Commissioner (A) upheld the decision, rejecting alternative remedy under Notification No.134/1994 and benefit under Notification No.21/2002.

The appellant argued spare parts were used for repair, exported engines incorporated these parts, and no duty was payable on re-export under Section 69 of the Customs Act, 1962. They claimed eligibility under Notification No.153/1994 for spare parts essential for repairs, supported by legal precedents.

The Revenue's Authorized Representative contended the appellant's refusal to obtain Section 65 bond hindered domestic repair services, and the appellant's requests led to inclusion of Section 65 bond. They opposed benefit under Notification No.134/1994 and No.21/2002 for home consumption.

The Tribunal analyzed Notification No.153/1994 exempting goods imported for repairs and return, finding spare parts used in engines for export satisfied conditions. They also examined Notification No.21/2002 exempting spare parts for aircraft under specific conditions, concluding the appellant was eligible for both exemptions.

In conclusion, the impugned order was set aside, and the appeals were allowed with any consequential relief as per law.