2017 (2) TMI 359 - AT - Customs

Classification of goods - Applicability of circular with retrospective effect - Benefit of N/N. 11/97 - import of insole sheets for leather footwear - denial on the ground of non-fulfillment of condition of notification - Held that - the products imported by the appellant are specifically mentioned in serial No.3 in list 3(A). It is to be noticed that there is no other condition has been put in the notification for extending the benefit of the said concessional rate of duty - the imports in this case being prior to the date of circular having been issued, the actual user condition cannot be imposed on the appellant to deny the benefit of concessional rate of duty - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Benefit of exemption Notification No.11/97-Cus.
- Conditions for availing concessional rate of duty under the notification.
- Interpretation of CBEC circular No. 74/98-Cus.
- Applicability of actual user condition on imported goods.
- Judicial pronouncements on the issue.
- Decision on the appeal.

Analysis:
The appeal revolves around the benefit of exemption Notification No.11/97-Cus claimed by the appellant for importing "insole sheets for leather footwear." The appellant's bill of entry was provisionally assessed pending a Test Report, which confirmed the sheets' use as insole material in shoe making. The final assessment extended the benefit of the notification and dropped the less charge demand. However, the first appellate authority held that the appellant failed to fulfill the conditions prescribed in the notification, thus denying the benefit.

The Tribunal examined the submissions and the notification's conditions, particularly serial No.94, which specifies goods for use in the leather industry with a concessional rate of duty. The products imported by the appellant were listed in list 3(A) without additional conditions. Referring to CBEC circular No. 74/98-Cus., the Tribunal emphasized that goods for use in the leather industry could be covered under the notification without imposing actual user conditions.

Citing judicial pronouncements and precedents, the Tribunal highlighted that the actual user condition cannot be imposed retrospectively on imports made before the circular's issuance. Relying on the Tribunal's previous decisions, the Tribunal concluded that the appellant cannot be denied the concessional rate of duty benefit based on the actual user condition.

Therefore, the Tribunal allowed the appeal and set aside the impugned order, emphasizing that the actual user condition cannot be applied to imports made before the circular's issuance, thereby granting the appellant the benefit of the concessional rate of duty under Notification No.11/97-Cus.