2017 (3) TMI 584 - AT - Customs

Benefit of N/N. 76/2004-Cus dated 26.07.2004 - import of Parts of Computers - denial on the ground that the Notification applies to Central Processing Unit and not to Parts of Computers - Held that - N/N. 6/2002-CE dated 1.3.2002 at Sr.261 is applicable to Parts of Computers used within factory of production for the manufacture of Computers of Heading 84.71 - Appellants are manufacturers of branded Computers and have used the Parts of computers imported for manufacture of Personal Computers, which have been cleared on payment of duty. Therefore, they would be eligible for exemption - although the benefit of said Notification was not claimed by the Appellants at the time of import, but claimed at a later date, the legitimate exemption, which was otherwise available, should not have been denied. In the regime of self-assessment, the scope for grievance and filing of appeal is non-existent, as non-filing of appeal against the assessment of the Bill of Entry does not deprive the assessee the right to file refund. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against Order-in-Appeal denying concessional duty rate under Notification, denial of alternative benefit under different Notification, challenge of assessment orders, eligibility for exemption, denial of refund due to non-challenge of assessment order.

Analysis:
1. The appellants imported computer parts claiming a concessional duty rate under Notification No.76/2004-Cus, which was denied as the Notification applied to CPUs, not parts. They cleared goods under protest and sought benefit under Notification No.6/2002-CE for manufacturing computers, which was denied by the first appellate authority citing non-initial claim and non-challenge of assessment.

2. The Counsel argued that imported parts are exempt under Notification No.6/2002-CE if used for manufacturing personal computers. He relied on CA certificate and Supreme Court judgments supporting exemption. He contended that filing a refund claim is akin to challenging assessment, as held in various judgments.

3. The Department's Representative reiterated the Appellate Authority's findings, stating that exemption cannot be granted if not claimed initially. He argued that filing a refund claim does not constitute challenging the assessment.

4. The Tribunal found the orders unsustainable for multiple reasons. Firstly, under Section 3(1) of the Customs Tariff Act, additional duty is levied equivalent to excise duty on like articles produced in India, not mandating actual production in India. Citing a Supreme Court case, the Tribunal held that the appellants, as computer manufacturers using imported parts, are eligible for exemption.

5. The Tribunal also ruled that non-challenge of assessment does not bar the right to file a refund claim in a self-assessment regime. Refund claim itself constitutes a challenge to the Bills of Entry. Consequently, the impugned order was set aside, allowing the appeals with any consequential relief as per law.