Inckah Infrastructure Technologies ... vs Commissioner Of Customs (Imports), ...

[Arising out of Order-in-Original No. S/10/Adj.17/2011 dated 24/01/2011 passed by the Commissioner of Customs (Import), Nhava Sheva]

For approval and signature:

Honble Mr. P.S. Pruthi, Member (Technical) Honble Mr. Ramesh Nair, Member (Judicial)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : seen of the Order?

4. Whether Order is to be circulated to the Departmental: Yes authorities? =======================================================

Inckah Infrastructure Technologies Ltd. : Appellant

VS

Commissioner of Customs (Imports), Nhava Sheva : Respondent

Appearance

Shri V.V. Gautam, Advocate for the Appellant Shri M.K. Sarangi, J.C, (AR) for the Respondent

CORAM:

Honble Mr. P.S. Pruthi, Member (Technical) Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 26/08/2015 Date of decision: / /2015

ORDER NO.

Per : Ramesh Nair

The appeal is directed against Order-in-Original No. S/10/Adj.17/2011 dated 24/01/2011 passed by the Commissioner of Customs (Import), Mumbai-II, Jawaharlal Nehru Custom House, Nhava Sheva, wherein the Ld. Commissioner confiscated goods covered under Bill of Entry No. 892599 dated 12-10-2010 valued at Rs. 63,36,384.48/- under Section 111(d) & (m) of the Customs Act, 1962, however, with option to the appellant to redeem on payment of Rs. 12,50,000/- under Section 125 of the Customs Act on payment of applicable of duty, subject to condition, importer shall within 3 months of clearance for home consumption, get the vehicle converted to Right Hand Drive to the satisfaction of provisions of the Motor Vehicle Act, 1988 read with Rule 126 of Central Motor Vehicles Rules, 1989 and shall produce a certificate to this effect from the appropriate Transport Authority. A penalty of Rs. 5 Lakhs was imposed under Section 112(a) of Customs Act, 1962.

2. The fact of the case is that the appellant have filed a Bill of Entry No. 892599 dated 12-10-2010 for import of goods declared as Slurry Seal Machine for filling up cracks in road from M/s. Henon Gaoyuan Road Maintenance Equipment Co. Ltd. China. The declared invoice value was USD 1,37,580.00 CIF. The appellant classified the goods under CTH as well as CTSH 84791000. They also claimed exemption of duty under Notification No. 021/2002-Cus dated 01-03-2002 (Sr. No. 230).

3. At the time of assessment, it was contented by the assessing authority that the appellant had not fulfilled the conditions of the Notification No. 021/2002-Cus (Sr. No. 230) in as much as the work which the appellant has claimed to be under taking is repair of cracks in road, which has not covered under the activity prescribed in the condition of exemption notification. It was also contented that no valid contract wherein the import has been shown as contractor and sub-contractor as per the condition 2(II) sub condition (ii) or (iii) has been submitted by the importer. The assessing authority also contented that the repair of cracks cannot be a construction activity. In view of this, the Asstt. Commissioner of Customs, group V-A denied the benefit of said Notification and the Bill of Entry was assessed of the merit without any verification.

4. At the time of examination, it was also observed by the Appraiser and DC Docks that the goods viz. Slurry Seal Machine was fitted/mounted on a truck having Left Hand Drive and speedometer showing the speed up to 140 KMPH. Accordingly the Custom department proposed the classification under CTH 87059000 as against the appellants claim in the Bill of Entry No. 892599 under CTH 84791000. The appellant waived the show cause notice but requested to personal hearing. However, they agitated the matter before Adjudicating Authority. The Adjudicating Authority adjudicated the matter wherein decided the classification under CTH 87059000 as against the appellants claim in the Bill of Entry No. 892599 under CTH 84791000. Adjudicating Authority also observed that the appellant failed to declare that the goods Slurry Seal Machine was fitted/mounted on the vehicle. As regard eligibility of the Notification No. 21/2002-Cus dated 01-03-2002 (Sr. No. 230), it stated that the appellant accepted before him that the duty benefit under Notification No. 21/2002-Cus dated 01-03-2002 (Sr. No. 230) is not due to them and they were not contesting the said issue. Hence, as per the provision of Section 17(s) of the Customs Act, 1962, the said issue was settled and it has not examined the said matter afresh.

5. Shri V. V. Gautam, Ld. Counsel for the appellant submits that the adjudication order was passed without considering the submission of the appellant and contended that the appellant had accepted the denial of exemption notification. He submits that in their submission dated 01-11-2010, the appellant categorically agitated the matter of classification and consequential benefit such as exemption notification. Therefore, it is not correct on the part of the Adjudicating Authority to say that the appellant accepted the assessment made by the department; therefore the Adjudicating Authority ought to have considered the eligibility of the exemption apart from deciding the classification. The order suffers from serious violation of principles of natural justice. He further submits that as regard the classification, for last ten years appellant had been importing the similar equipments for road construction. Same has been consistently classified under Chapter Heading 8479, therefore, there is no change in circumstances for changing the classification. It is his submission that the machinery imported by the appellant primarily for the paving operation in the road construction and the said operation is carried out by moving the machine on the road, only for that purpose vehicle is required and machine is mounted on the vehicle.

The vehicle is not used for transport passenger; therefore it is correctly classifiable under the CTH 8479 and not under CTH 8705. As regard eligibility of exemption, he submits that the appellant have produced a necessary certificate from New Delhi Municipal Corporation as well as National Highway Authority of India wherein it was certified that the appellant has been awarded the contract in the capacity of sub-contractor. Therefore, it is not a matter of doubt that the appellant is sub-contractor for the repairing of the road. It is his submission that whether the machine is mounted or otherwise, it was supplied under the description of Slurry Seal Machine and same was declared in the Bill of Entry, therefore, there is no mis-declaration on the part of the appellant. He further submits that the machine imported by the appellant is especially mentioned in the list 18 as specified under Notification No. 21/2002-Cus. It is eligible for the exemption. All the conditions, such as certificates of all the authorities on the construction, have been complied with. He alternatively submits that even if the classification is decided under CTH 8705, the exemption is available under the same notification for the reason that the exemption notification is allowed in respect of the goods, of list 18 irrespective of any Chapter Heading.

In terms of exemption entry provided under Sr. No. 230, it was mentioned as 8479 or any other chapter, therefore even the goods also classified under 8705 the exemption notification is available.

6. On the other hand Shri M.K. Sarangi, Ld. Joint Commissioner (AR) appearing on behalf of the Respondent reiterates the findings of the impugned order.

7. We have carefully considered the submissions made by both the sides.

8. Without going into the issue of classification, we find that a irrespective classification of the import goods whether under CTH 8479 or 8705, the exemption Notification 21/2002 is admissible only if the goods appearing in the list 18 of Notification No. 021/2002-Cus dated 01-03-2002 (Sr. No. 230). However, the Ld. Adjudicating Authority has not decided this issue that if the goods classified under Chapter 8705 whether the exemption is available to the subject imported goods. We find that the goods imported is Slurry Seal Machine used for construction of road by operation of paving of the material on the road. There is no dispute that Slurry Seal Machine is mentioned in list 18 of Notification No. 021/2002-Cus dated 01-03-2002 (Sr. No. 230).

9. In view of this position, we are the view that the matter deserves to be reconsidered. We, therefore, direct the Adjudicating Authority to decide the eligibility of Notification No. 021/2002-Cus in respect of Slurry Seal Machine imported by the appellant classified under CTH 8705. The dispute regarding the vehicle having Left Hand Drive does not exist for the reason that the appellant have converted the vehicle to Right Hand Drive and necessary certificate from R.T.O. has been produced. In the circumstances the goods in not liable for confiscation, hence the same is dropped, consequently penalty is also waived. The appeal is allowed in the above terms by the way of remand.

(Order pronounced in court on ________)

P.S. Pruthi Member (Technical) Ramesh Nair Member (Judicial)

saifi

7 Appeal No. C/204/11-Mum