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TMI Blog2013 (8) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... for the appellant to claim that FWTs could be considered as mobile/cellular phones. Prima facie, BSNL being the buyer of the goods manufactured and supplied by the appellant cannot be considered as a detached and independent expert and therefore BSNL's opinion may not be reliable. VJTI's opinion was taken by the appellant on 03/05/2012 and submitted to the Commissioner and the same was not accepted inasmuch as the Institute's authenticity to issue such opinion/certificate was not established by the appellant and the opinion/certificate was found to have been issued without examining the basic function of the FWTs. Apparently, the adjudicating authority has stated specific and cogent reasons for not accepting either of the two certificates. Extended period of limitation - Held that:- Apart from the fact that there was difference of opinion even in the Department, the fact remains that the department officials had been regularly visiting the factory of the appellants and were in the know of the process of manufacture adopted by the appellants and to state that the appellants had played fraud on the department is difficult to sustain. - Demand beyond normal period set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yable in the event of breach of the relevant condition attached to the Notification. On this basis, the imported goods were allowed to be cleared with the benefit of the relevant Notification. Later on, it appeared to the Department from th e results of investigations for the period from September 2006 to March 2009 that the assessee had manufactured Fixed Wireless Terminals (FWTs) from the imported components/parts and cleared these FWTs without payment of duty by claiming the benefit of exemption under Notification No. 6/2006-CE (Sl. No.31). In terms of Sl. No. 31 of the Notification," parts, components and accessories of mobile handsets including cellular phones " were chargeable to "nil" rate of duty subject to the condition that the procedure laid down in the Central Excise (Removal of Goods at Concessional Rate of Duty to Manufacture of Excisable Goods) 2001 (the 2001 Rules, for short) was followed where the goods were used elsewhere than in the factory of its production. According to the Department, the goods manufactured by the assessee viz. FWTs were not mobile/cellular phones and the benefit under Sl. No.31 of the said Notification was not available to them as the goods w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore the benefit of exemption notification as applicable to cellular phones should also be available to FWTs. (Reliance placed on Tata Teleservices Ltd. Vs. CC, Chennai [2006(194) ELT 11(SC)] and Final Order No.937/2006 dt. 17/05/2006 passed by this Bench in the case of Indian Telephone Industries Ltd. Vs. CC, (b) The certificate dt. 13/01/2009 issued by BSNL and the certificate dt. 03/05/2012 issued by VJTI (Veermata Jijabai Technological Institute) were rejected by the adjudicating authority without any valid reason. BSNL certified that the FWTs supplied to them by the assessee could be treated as cellular phones as they were working on cellular technology. VJTI opined that FWT could functionally and technologically be considered as a mobile/cellular phone. (Reliance placed on CC (Exp arts), Mumbai Vs. NISUN Enterprises [2012(280) ELT 152 (Tri.), Mafatlal Fine Spg. Mfg. Co. Vs. CCE [1999(113) ELT 141(Tri.) and Bay Talkitec Pvt. Ltd. Vs. CC [2003(156) ELT 980(Tri.)] (c) In the case of Inter-Continental (India) Vs. UOI [2003 (154) EL T 37 (Guj.)], the Hon'ble High Court of Gujarat held that an opinion given by an expert could not be rejected unless and until it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the demand to parts/components imported] in SKD condition for FWTs. Only 7 Bills of Entry pertained to the parts/components for FWTs. Other Bills of Entry were related to imports of parts and components for the manufacture of adapters, to which exemption was admissible but this benefit was not granted. This apart, the learned Commissioner has once again demanded duty in respect of the imports covered by 6 Bills of Entry though the Commissioner of Customs (Appeals), Chennai vide Order-in-Appeal dt. 26/08/2001 had dropped the demand of duty in respect of 13 Bills of Entry including the said 6 Bills of Entry. According to the appellant, if the demand is correctly quantified on the basis of the allegations in the show-cause notice, it would amount to Rs. 5.13 crores only. Even out of this amount, duty of Rs. 5.12 crores pertains to the period prior to 2008-09 for which the relevant documents were seized by the DRI (investigating agency) and not provided to the appellant. (h) The assessment of the goods to duty should not have been reviewed through show-cause notice under Section 28 of the Customs Act and Section 11A of the Central Excise Act without recourse to other relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tay of recovery. 6. The learned Additional Commissioner (AR) has opposed the stay application on the strength of the findings recorded in the impugned order. He has particularly relied on the Board's Circular No. 57/2003-Cus. dt. 27/06/2003 wherein it was clarified that Notification No. 21/2002-Cus. dt. 01/03/2002 did not cover either Fixed Wireless Terminals or Fixed Wireless Telephones working on cellular technology. 7. In his rejoinder, the learned counsel has submitted that the above Circular was withdrawn by the Board by way of Circular No. 15/2006-Cus. dt. 20/04/2006 in view of the Hon'ble Supreme Court's judgment dt. 13/12/2005 in the case of Tata Teleservices Ltd. (supra). He has further pointed out that the later Circular clarified that the benefit of Notification No. 21/2002-Cus. (Sl. No. 313) was available to all telephones including FWTS working on cellular technology. However, the adjudicating authority disallowed the benefit on the premise that the subject goods was Fixed Wireless Terminal and not Fixed Wireless Telephone. The adjudicating authority, on the same basis, held the apex court's decision to be inapplicable. 8. After giving careful consideration to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der has noted that the assessee acknowledged receipt of the documents relied upon in the show-cause notice. 9. However, we have found prima facie case for them based on limitation. The case of the appellant is that, as BSNL in their purchase orders prior to June 2009 clearly stated that no excise duty was payable on FWTs, the appellant believed bona fide that they were not liable to pay CE duty on the goods manufactured by them and supplied to BSNL. It is further submitted by the appellant that there were divergent views within the Department itself. In this connection, the learned counsel has relied on a correspondence dt. June 2009 between the Commissioner of Customs (Import), Chennai and the Chief Commissioner of Customs, Chennai Zone. In the cited letter, the issue discussed was whether various imported components which, when assembled, would form a Fixed Wireless Terminal were covered by the description "mobile handsets including cellular phones" for the purpose of exemption under Notification No.21/2005-Cus. and Notification No.6/2006-CE. The letter concludes thus:- "From the facts and circumstances explained above and also based on the information available in the var ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory of the appellants and were in the know of the process of manufacture adopted by the appellants and to state that the appellants had played fraud on the department is difficult to sustain. In the circumstances, we think, the application of the extended period of limitation as provided under Section 11A of the Act is not correct. Therefore, that part of the order where the Tribunal has rejected the prayer of the appellants not to invoke Section 11A is set aside and in other respects the order made by the Tribunal is maintained." The learned counsel for the appellant has also referred to a Final Order of this Bench vide Final Order No.937/2006 dt. 17/05/2006 in appeal No.C/325/2005 (Indian Telephone Industries Ltd. Vs. CC, Bangalore) wherein one of the issues considered was whether FWTs could be classified as cellular phones under hearing 8525 of the Customs Tariff Schedule for the benefit of Notification No.21/2002-Cus. (Sl.No.427). The FWTs were held to be classifiable as cellular phones under the said heading. The cited Final Order also is said to have persuaded the appellant to maintain the aforesaid bona fide belief. This claim of the appellant has also not been successfull ..... X X X X Extracts X X X X X X X X Extracts X X X X
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