2023 (5) TMI 304 - AT - Customs

Benefit of exemption - import of machine for construction of roads - Violation of the condition of actual use - Serial No. 230 of Notification No. 21/2002-CUS dated 01.03.2002 - denial of benefit on the ground that the rigs were not even sent to NHAI site after importation and at the time of importation the appellant company had claimed that the appellant company was awarded with a road construction contract by NHAI and that the rigs were not found in the possession of the appellant company. Whether the imported goods were used for construction of roads? - Whether they were used for any other purpose than construction of roads? - Whether the imported goods were sold within a period of five years from the date of importation? - Whether the imported goods were otherwise disposed of? HELD THAT - There is no dispute that the imported goods were used for construction of roads from March 2004 to October 2004. Though the goods were shifted to DMRC site there is no statement on record from any official of DMRC that the goods were utilize for any other purpose than construction of roads. Had the goods been used for any other purpose than construction of roads then it was possible for Revenue to lay their hands on such evidence. From the case records, such evidence is not forth coming. Therefore, it is not proved that the goods were used for any other purpose than construction of roads. Revenue has not established that the goods were sold by the appellants. The only issue remaining is whether the goods were otherwise disposed of by the appellants. From the case records, it appears that though at the time of seizure the goods were in custody of other person than the importer, however Revenue has not established that the goods were disposed off to other person forever and importer did not have any control over the goods. Further, the control was with the appellant that is why the installments were being paid for the finance raised by the appellant. Above discussion establishes that the importer company has not violated the specified conditions of exemption notification and therefore, the impugned order is not sustainable. Appeal allowed.

Summary

Issues involved:
The judgment involves the interpretation of conditions of Notification No. 21/2002-CUS regarding the importation and use of piling rigs for construction of roads, specifically focusing on whether the imported goods were used as per the conditions, sold within the stipulated period, or otherwise disposed of.

Details of the judgment:

*Issue 1: Violation of conditions of exemption notification*

The appellants imported two piling rigs claiming exemption under Notification No. 21/2002-CUS. The show cause notice alleged that the appellants violated the conditions by not using the rigs exclusively for road construction and disposing of them. The original authority confirmed duty demand, imposed penalties, and confiscated the rigs, leading to the appeal before the Tribunal.

*Issue 2: Arguments of the appellants*

The appellants argued that they had used the goods for road construction as required, and the possession given to others for financial reasons did not constitute disposal. They challenged the evidence presented by the Revenue, highlighting discrepancies in proving alternate use or sale of the goods. They also referenced a CBEC clarification allowing relocation of machinery for road projects.

*Issue 3: Revenue's stance and Tribunal's analysis*

The Revenue contended that the appellants breached the notification conditions by using the rigs for a different purpose at DMRC and disposing of them. The Tribunal scrutinized the evidence and submissions, noting that the imported goods were indeed used for road construction within the specified period. Lack of evidence showing alternate use or sale, coupled with the appellants' continued control over the rigs, led the Tribunal to conclude that the conditions were not violated.

*Final Decision*

The Tribunal set aside the impugned orders, ruling in favor of the appellants, as it was established that the conditions of the exemption notification were not breached. The judgment was pronounced on 31.03.2023.