1992 (4) TMI 123 - AT - Customs

Summary

Issues Involved:
1. Eligibility for exemption under Notification No. 13/81-Cus.
2. Jurisdiction of the Superintendent and Assistant Collector to deny exemption.
3. Limitation period for issuing show cause notices.
4. Classification of Dozer Shovel as production machinery.

Issue-Wise Detailed Analysis:

1. Eligibility for Exemption Under Notification No. 13/81-Cus:

The respondents, a 100% Export Oriented Undertaking (EOU), imported capital goods, raw materials, and components under Notification No. 13/81-Cus, which exempted such imports from duty. The Department later contested the eligibility of the spares imported before 19-3-1984, arguing that spares were only included in the exemption by the amended Notification No. 86/84-Cus, dated 19-3-1984. The respondents countered that the exemption was lawfully and correctly allowed, and the goods were still in the warehouse, making the demand for duty premature.

2. Jurisdiction of the Superintendent and Assistant Collector:

The respondents argued that the Customs authorities at Calcutta and Vishakhapatnam had already assessed and allowed the exemption under Notification No. 13/81-Cus. Therefore, the Superintendent and Assistant Collector in Orissa lacked jurisdiction to deny the exemption or initiate proceedings. The Tribunal agreed, citing precedents that only the original assessing authorities could reassess the goods.

3. Limitation Period for Issuing Show Cause Notices:

The respondents contended that the show cause notices were barred by limitation, as they were issued beyond the six-month period specified in Section 28 of the Customs Act. The Department argued that the demand was not time-barred since the goods were still in bond. The Tribunal found that the demand was indeed time-barred, as the relevant date for assessing the limitation period was the date of importation or assessment, not the date of removal from the warehouse.

4. Classification of Dozer Shovel as Production Machinery:

The Department argued that Dozer Shovel was a material handling equipment and not production machinery, thus not eligible for exemption under the amended Notification No. 121/84-Cus. The respondents provided detailed explanations and certifications from technical experts, asserting that Dozer Shovel was integral to the production process. The Tribunal agreed, stating that Dozer Shovel played an essential role in the production process and should be classified as production machinery, making the spares eligible for exemption.

Conclusion:

The Tribunal dismissed the Department's appeals, holding that:
- The exemption under Notification No. 13/81-Cus was correctly allowed.
- The Superintendent and Assistant Collector in Orissa lacked jurisdiction to reassess the goods.
- The show cause notices were barred by limitation.
- Dozer Shovel was correctly classified as production machinery, making its spares eligible for exemption.

Separate Judgment:

In a separate judgment, one of the members highlighted that spares for Dozer Shovels imported vide bill of entry 214 dated 21-2-1984 were not covered by Notification No. 13/81-Cus before its amendment on 19-3-1984. However, this finding was academic, as the demand was ultimately held to be time-barred.