2019 (5) TMI 926 - AT - Customs

Exemption from SAD - Import of Microprocessors - appellants had availed the full exemption from payment of CVD under Notification No 06/2006-CE - denial of benefit under N/N. 029/2010-Cus dated 27.02.2010 on the ground that the goods are meant for fitment within the computer/ laptop and not meant for retail sale - HELD THAT - It is quite evident that complete exemption from payment of Central Excise duty (CVD) is admissible only in respect of the those microprocessors which are meant for fitment inside CPU Housing/ Laptop Body only. In all other case the Central Excise Duty (CVD) is leviable @ 4%. Admittedly in the present case appellants have claimed complete exemption from payment of Central Excise Duty (CVD) and hence the microprocessor imported by them are meant for fitment inside the CPU Housing/Laptop Body and not for retail sale. Exemption Notification No 29/2010-Cus dated 27.02.2010 exempts from payment of Special Additional Duty of Customs leviable thereon under sub section (5) of Section 3 of Customs Tariff Act, 1975 - From the wordings of the notification it is quite evident that this exemption is applicable only in respect of the goods which are in pre-packed form and are meant for retail sale. The retail sale price in respect of such goods needs to be declared on the package itself. Thus if the goods are meant for retail sale then obliviously they cannot be meant for fitment within the CPU Housing/ laptop Body. Wordings of exemptions make them mutually exclusive. The goods mean for retail sale as such cannot be meant for fitment inside the CPU Housing/ Laptop Body. Once the importer claims complete exemption from payment of CVD in terms of the Central Excise Notification referred above he is excluded from claiming exemption from payment of Special Additional Duty of Customs under Notification No 29/2010-Cus. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Interpretation of Notification No 06/2006-CE and Notification No 029/2010-Cus for exemption from payment of CVD and SAD.
2. Admissibility of exemption under Notification No 29/2010-Cus for goods intended for retail sale.
3. Burden of proof on the assessee for applicability of exemption clause.
4. Exclusivity of exemptions under different notifications.

Analysis:

Issue 1:
The appellants imported microprocessors under 25 Bill of Entries and claimed exemption from payment of CVD and SAD. The Commissioner confirmed a duty demand of ?67,75,374 under Section 28 of the Customs Act, 1962. The appellants challenged this order, claiming entitlement under Notification No 29/2010-Cus as the goods were pre-packaged and intended for retail sale. However, the Commissioner held that since the appellants availed exemption under Notification No 06/2006-CE for CVD, the goods were meant for fitment within computers, not for retail sale, thus excluding them from the benefit of Notification No 29/2010-Cus.

Issue 2:
The appellants argued that even if goods were meant for fitment inside computers, they could still be intended for retail sale, citing the possibility of selling to dealers or shops. They also claimed entitlement to a refund under Notification No 102/2007-Cus due to fulfilling conditions such as paying VAT/sales tax in India. However, the Authorized Representative for the revenue contended that the exemptions under Notification No 06/2006-CE and Notification No 29/2010-Cus were mutually exclusive, with the former indicating goods for fitment inside computers, excluding them from retail sale.

Issue 3:
The Tribunal noted the burden of proving applicability of exemption clauses lies on the assessee. Referring to the Hon’ble Supreme Court's ruling, the Tribunal emphasized interpreting exemption notifications strictly in favor of revenue in case of ambiguity. The Tribunal applied this principle to determine that the appellants were not entitled to the exemption from payment of SAD under Notification No 29/2010-Cus due to availing the benefit under Notification No 06/2006-CE.

Issue 4:
The Tribunal analyzed the language of the notifications to conclude that goods meant for retail sale could not simultaneously be intended for fitment inside computers, as per the exemptions provided. The Commissioner's findings were upheld, stating that the notifications claimed by the importer were mutually exclusive, and the appellants' appeal was dismissed accordingly.

This detailed analysis of the judgment highlights the key issues, arguments presented, legal interpretations, and the final decision rendered by the Tribunal.