2024 (2) TMI 875 - AT - Customs

Classification of import of UPS - Admissibility of exemption Notification No. 25/2005 Cus- dated 01.03.2005 vide Sl. No. 4 to imports of Home UPS - related party transaction - whether Home UPS were mere power supply units for Data Processing Equipments and were not eligible to be treated as Static Converter for use in Data Processing Machines, to which the notification applied to? - HELD THAT - It is well known that an exemption notification is to be read the way it is worded and no words can be added or deleted therefrom. The adjudicating authority reading the said terminology used in the notification to as to be used exclusively (implying solely or only) does not flow from the plain wordings of the exemption notification - the interpretation rendered the learned Commissioner and to impute malafides into the matter cannot be agreed upon, as it is found that the importer has truthfully declared the item contained and for ascertaining the technical parameters, the literature of the goods was also found enclosed. It would be worthwhile to place on record the technical parameters of the imported goods. Under the circumstances, there are no merit in denying the exemption benefit referred to supra to the imported goods. Further, in view of the findings that there is nothing amiss in the declaration and nothing has been concealed, the case does not warrant confiscation of the imported goods and imposition of penalties. The impugned goods are eligible for exemption benefits as claimed by the importer/appellant in terms of Notification No. 25/2005 Cus dated 01.03.2005 (vide Sl. No.4) - the order for confiscation of the goods and imposition of penalty is set aside - appeal allowed.

Summary

Issues involved:
The appeal challenges the Order-in-Original passed by the Commissioner of Customs regarding the admissibility of exemption Notification No. 25/2005 Cus to imports of Home UPS.

Facts and Decision:
The appellant, an importer, filed a Bill of Entry for clearance of Home UPS and other related items claiming exemption from Basic Customs Duty. However, upon examination, it was found that the imported Home UPS were actually household inverters used for running appliances, not exclusively for Data Processing Equipment as required by the notification. The adjudicating authority verified the assessment and found the goods did not meet the criteria for duty exemption.

Admissibility of Notification:
The notification grants duty exemption to Static Converters for Data Processing Equipment under Chapter No. 850440 without specifying end use requirements. The strict interpretation of exemption notifications was emphasized, citing relevant legal precedents. The Commissioner's interpretation of static converters under HSN was deemed incorrect as it did not align with the plain wording of the notification.

Technical Parameters and Conclusion:
The technical parameters of the imported goods were considered, and it was concluded that the goods were eligible for the exemption benefits claimed by the importer. The denial of exemption, confiscation of goods, and imposition of penalties were set aside, and the appeal was allowed with consequential benefits.

Operative part of the order:
The impugned goods were found eligible for exemption benefits under Notification No. 25/2005 Cus, and the order for confiscation and penalties was overturned, allowing the appeal with legal benefits.