2019 (4) TMI 335 - AT - Customs

Benefit of exemption - import of paver finishers capable of laying bituminous pavement of 7 meter and above - N/N. 21/2002-Cus dated 01.03.2002 - sub-contract - clearance of electronic Sensor Paver Vogele-Model Super 1800-2 with AB 600 2TV Screed for working upto 9.5 Mtrs for laying Bituminous Pavement - Held that - The issue is well settled by the decision of larger bench of Tribunal in case of COMMISSIONER OF CUSTOMS (IMPORT), MUMBAI VERSUS RAMKY INFRASTRUCTURE LTD AND OTHERS 2014 (6) TMI 615 - CESTAT MUMBAI (LB) , where it was held that From the purchase order and from the packing list, we find that the accessories i.e. bolt-on extensions were separately ordered. In a situation when bolt-on extensions are not imported, the relevant question would then be whether the machines still qualify for exemption under Notification 21/2002. Certainly, the benefit of the Notification is not available to such machine. Appeal and the cross-objections filed by the Revenue is dismissed.

Issues Involved:
1. Eligibility for exemption under Notification No. 21/2002-Cus dated 01.03.2002.
2. Interpretation of the term "Electronic paver finisher for laying bituminous pavement 7 m size and above."
3. Validity of the importer's claim as a sub-contractor approved by NHAI.
4. Admissibility of cross-objections filed by the respondents.

Detailed Analysis:

1. Eligibility for Exemption under Notification No. 21/2002-Cus:
The primary issue revolves around whether the imported machinery qualifies for the exemption under Notification No. 21/2002-Cus, which is available for "Electronic paver finisher (with sensor device) for laying bituminous pavement 7 m size and above." The machinery in question had an in-built facility for paving widths from 3 meters to 6 meters, extendable to 9 meters with additional attachments. The revenue argued that the machine does not inherently meet the 7-meter requirement as stipulated in the notification, and hence, the exemption should not apply. The Tribunal upheld this view, emphasizing that the machine must inherently be capable of laying pavement widths of 7 meters and above without relying on additional attachments.

2. Interpretation of "Electronic paver finisher for laying bituminous pavement 7 m size and above":
The Tribunal referred to the decision of the larger bench in the case of Commissioner Custom (Import) Mumbai vs. Ramky Infrastructure Ltd., which clarified that the basic character of the machine should meet the exemption criteria without relying on accessories. The Tribunal emphasized the strict interpretation of exemption notifications as held by the Hon'ble Supreme Court in the case of Dilip Kumar & Company, stating that any ambiguity in the notification should be interpreted in favor of the revenue.

3. Validity of the Importer's Claim as a Sub-Contractor Approved by NHAI:
The respondents contended that they were approved as sub-contractors by NHAI and should be eligible for the exemption. However, the Tribunal referred to the decision in Gammon India Ltd., which clarified that a sub-contractor must be explicitly named in the main contract between NHAI and the concessionaire. In this case, the respondents were not specifically named as sub-contractors in the main contract, and hence, their claim was not valid. The Tribunal emphasized that the mere approval by NHAI does not suffice for the exemption; the sub-contractor must be explicitly named in the main contract to meet the conditions of the notification.

4. Admissibility of Cross-Objections Filed by the Respondents:
The respondents filed cross-objections arguing that the imported paver finisher should be assessed as presented, capable of laying pavements of 7 meters and above with attachments. They also contended that the exemption notification should be interpreted without adding or deleting any words. The Tribunal dismissed these objections, reiterating the need for strict interpretation of the notification and the requirement for the machine to inherently meet the 7-meter criterion. The Tribunal found no merit in the respondents' arguments and upheld the decision to deny the exemption.

Conclusion:
The Tribunal dismissed both the appeal filed by the revenue and the cross-objections filed by the respondents. The judgment reinforced the principle of strict interpretation of exemption notifications and clarified the requirements for machinery to qualify for specific exemptions under customs law. The decision emphasized that the inherent capabilities of the machinery, as presented for assessment, must meet the exemption criteria without relying on additional attachments or modifications.

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