2023 (9) TMI 1106 - AT - Customs

Validity of certificates of exemption granted by the Ministry of Surface Transport - Department s plea is that an exemption benefit has to be strictly read into and its benefit is not accruable as Hydraulic Study Department was engaged in commercial activity and the imported goods were put to commercial use - whether Hydraulic Study Department were engaged in commercial activities? - HELD THAT - It is an admitted position that the Commissioner of Customs, while re-adjudicating the matter in remand proceedings has not caused any enquiries with the Issuing Authority to validate and/or invalidate the correctness of exemption certificates so issued - While setting aside the order of the Commissioner of Custom (Port) it had specifically mentioned that if the authorities were having any doubt with regard to the correctness of the certificates so produced by the appellant, it was open to them to take up the matter with the Issuing Authority. The impugned order passed afresh does not reflect anywhere that the Issuing Authorities were referred to in the matter and enquiries caused about the veracity of the certificate, questioned by the Commissioner of Customs (Port), to substantiate its finding in the impugned order. On the question of engaging in commercial activity on part of the Hydraulic Study Department of Calcutta Port Trust, it was pointed out that Hydraulic Study Department is a separate unit/institution under the aegis of Calcutta Port Trust and carries out no commercial activities - There is no evidence of any further high sea sales of the said goods prior to their importation. Thus, the veracity of Hydraulic Study Department being the importer is not in doubt. There has been no evidence provided to substantiate the contention of the adjudicating authority that HSD was engaged in commercial activity and therefore the imported goods were not eligible to exemption benefit. The Hydraulic Study Department of Calcutta Port Trust were eligible for the benefit of Notification No. 70/80-Cus dated 26.03.1981 and Notification No. 152/94-Cus dated 13.07.1994 - the exemption benefit has been inappropriately denied to the appellants - appeal allowed.

Summary

Issues involved:
The issues in this case revolve around the admissibility of exemption notifications under Notification No. 70/81-CUS dated 26.03.1981 and Not. No. 152/94-CUS dated 13.07.1994, concerning the import of goods by a research institution and the denial of duty concessions by the Commissioner of Customs.

Details of the Judgment:

1. Background and Dispute:
The case involved the Hydraulic Study Department of Kolkata Port Trust seeking duty concessions for importing scientific equipment for research purposes under the mentioned notifications. The dispute arose when the Commissioner of Customs denied the exemption benefit, alleging that the goods were used for commercial activities.

2. Ministry's Certificate and Import Details:
The Ministry of Surface Transport had issued the required certificate for exemption to the Hydraulic Study Department. Import details showed that the goods were imported by the appellant for research purposes, as per the certificate's conditions.

3. Commissioner's Decision and Penalty:
The Commissioner confirmed a duty amount and imposed a penalty, alleging fraudulent certificate procurement and commercial use of the imported goods by the appellant.

4. Tribunal's Remand and Observations:
In the first round of litigation, the Tribunal remanded the matter back to the Commissioner, emphasizing that doubts about certificate validity should be addressed with the Issuing Authority. The Tribunal set aside the earlier order for fresh adjudication.

5. Lack of Enquiries and Rejection of Benefit:
The Tribunal noted that the Commissioner failed to validate the exemption certificates with the Issuing Authority in the re-adjudication. The Commissioner's decision did not reflect any efforts to verify the certificates' correctness, as directed by the Tribunal.

6. Commercial Activity Allegation and Importer Details:
The appellant clarified that the Hydraulic Study Department was not engaged in commercial activities and that the imported goods were used solely for research purposes. Import documents and invoices clearly identified the appellant as the importer.

7. Judgment and Conclusion:
The Tribunal held that the Hydraulic Study Department was eligible for the exemption benefits under the mentioned notifications. The impugned order denying the benefit was set aside, and the appeal by the Hydraulic Study Department was allowed, while the department's appeal was dismissed.

This comprehensive summary outlines the key aspects of the legal judgment, including the background, disputes, Tribunal's observations, and the final decision regarding the admissibility of exemption notifications for the Hydraulic Study Department of Kolkata Port Trust.