2016 (2) TMI 178 - AT - Customs

Import of capital goods - exemption Notification No. 53/97 - installation of the machinery within one year - the bill of entry in this case was filed on 27.10.1997 and at that time there was no provision in the Notification No. 53/1997-Cus. dated 3.6.1997 that the goods imported there under should be installed within the period of one year - Held that - the goods after import were warehoused at the Nagpur unit of the appellant which is other than the unit in respect of which the LOP was issued. These goods were later transferred to Raipur unit in favour of which LOP was issued. It is also seen that it is only after the amendment of Notification No. 53/1997-Cus that the provision for procurement of goods from public warehouse or private warehoused was added to the said notification and at the same time the condition of installation of goods during the prescribed time was also added. The transfer of goods from Nagpur unit to the Raipur unit for which LOP was issued took place after such amendments. Thus, there is prima facie some rationale behind the primary adjudicating authority applying conditions of the Notification No. 53/1997-Cus as amended (as applicable on the date of such transfer) which contained the requirement of installation of the goods within the prescribed period. The appellant has not been able to make out a good case for complete waiver of pre-deposit - stay granted partly.

Summary

Issues:
1. Custom duty demand confirmation for the period November 1997 to March 2005.
2. Application for stay along with appeal against the order-in-original dated 25.11.2013.
3. Interpretation of Notification No. 53/1997-Cus regarding installation of imported goods within one year.
4. Transfer of goods between different units and the impact on the application of customs duty exemptions.
5. Requirement of pre-deposit for appeal and stay of recovery during pendency.

Analysis:
1. The appeal was filed against the confirmation of a custom duty demand amounting to Rs. 1,88,26,572 for the period between November 1997 to March 2005. The appellant contested the demand, citing previous CESTAT orders and the absence of a specific provision in Notification No. 53/1997-Cus at the time of import regarding the installation timeline of the imported goods.

2. The appellant argued that the bill of entry was filed in October 1997, and as per the exemption notification, there was no requirement for the goods to be installed within one year. The primary adjudicating authority was accused of not following the CESTAT mandate from a previous order, which required consideration of the conditions of the notification as they existed at the time of import.

3. The Tribunal acknowledged the absence of the installation requirement in the original notification but noted that the goods were initially warehoused in a different unit from the one specified in the Letter of Permission (LOP). Subsequently, the goods were transferred to the unit mentioned in the LOP after amendments were made to Notification No. 53/1997-Cus, which included the installation condition. The Tribunal found some justification in the authority's decision to apply the amended conditions for the transfer date.

4. Considering the circumstances, the Tribunal ruled that the appellant did not present a strong case for a complete waiver of pre-deposit. A pre-deposit of Rs. 10 lakhs was ordered within eight weeks, with the remaining liability stayed during the appeal's pendency. Failure to comply with the pre-deposit would result in the dismissal of the appeal for non-payment. The decision balanced the interests of the appellant with the need for compliance with customs duty regulations.