M/S. Punj Lloyd Ltd vs C.C., New Delhi

1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3. Whether Lordships wish to see the fair copy of the order? Seen 4. Whether order is to be circulated to the Department Authorities? Yes

Appeal No.C/560/2010-CU[DB]

[Arising out of Order-in-Appeal No.CC(A)/Exp/92/10, dated 16.07.2010 passed by the C.C.(Appeals), New Delhi]

M/s. Punj Lloyd Ltd. Appellant

Vs.

C.C., New Delhi Respondent

Appearance

Mr.Udit Jain, Advocate - for the appellant

Ms. Suchitra Sharma, DR - for the respondent

CORAM: Honble Justice G. Raghuram, President

Honble Mr. R.K. Singh, Member (Technical)

Final Order No.53059/2015, dated 02.09.2015

Per Mr. R.K. Singh :

Appeal is filed against Order-in-Appeal dated 16.07.2010 in terms of which the benefit of Notification No.20/2006-Cus, dated 01.06.2006 exempting special additional duty (SAD) was denied.

2. The facts of the case are as under:-

The appellant imported goods under 12 Bills of Entry and claimed exemption from basic customs duty and countervailing duty under Notification No. 54/2003-Cus dated 01.04.2003 on the strength of the duty-free service entitlement credit certificate. However it was required to pay in cash SAD leviable under section 3 (5) of the Customs Tariff Act, 1975 on the ground that the said duty could not be debited to duty-free service entitlement credit certificates and the benefit of Notification No. 20/2006  Cus was not allowed to the appellant. On appeal, filed before the Commissioner (Appeals), the Commissioner (Appeals) upheld Order-in-Original on the ground that the benefit of Notification No. 20/2006Cus for SAD was available only when the goods were exempt from whole of basic custom duty and additional duty of customs (CVD) leviable under section 3 (1) of the Customs Tariff Act, 1975 without any condition and that in the present case the said exemption was subject to the condition that the said duties are debited to duty-free service entitlement credit certificate.

3. The appellant has contended that Notification 54/2003Cus fully exempted basic customs duty and CVD and therefore it was entitled to the benefit of Notification No. 20/2000-ST and cited the judgement in the case of Gujarat Ambuja Exports Ltd. Vs. Union of India [2013 (288) ELT 49 (Guj)].

4. Ld. Departmental Representative supported the impugned order.

5. We have considered the contentions of both sides. We find that by virtue of Notification No. 20/2006Cus, the Govt of India granted exemption from payment of SAD. The relevant portion of the said Notification is reproduced below:-

Sr. No. Chapter, heading, sub-heading or tariff item of the First Schedule Description of goods Standard rate 1 2 3 4 1 Any Chapter All goods which are exempt from the whole of the duty of customs leviable thereon or in case of which Free or Nil rates of duty of customs are specified in column (4) under the First Schedule of the Customs Tariff Act, 1975 (51 of 1975) and which are also exempt from the whole of additional duty of customs leviable thereon under sub-section (1) of Section 3 of the said Act, or on which no amount of the said additional duties of customs is payable for any reason.

Nil

we find that the only condition for exemption from SAD in Notification 20/2006Cus is that the goods should be exempt from payment of basic customs duty and countervailing duty (leviable under section 3 (1) of the Customs Tariff Act, 1975) the above quoted language of the exemption notification no where states that the exemption should be unconditional. It is a fact that vide Notification No.54/2003Cus, basic customs duty and countervailing duty [under Section 3 (1) of the Customs Tariff Act, 1975] were exempted during the relevant period. [Indeed w.e.f. 19.12.2006 even SAD leviable under section 3 (5) of Customs Tariff Act, 1975 was also exempted under Notification No.54/2003Cus but as the Bills of Entry in this case were of date prior to 19.12.2006, this is of no relevance for the present case]. However, the fact remains that during the relevant period the impugned goods were fully exempt from basic custom duty as well as CVD [leviable under section 3 (1) of Customs Tariff Act, 1975] and consequently, they (i.e., the impugned goods) were entitled to the benefit of Notification No.20/2006  Cus. Indeed in a similar set of circumstances in the case of Gujarat Ambuja Exports Ltd. Vs. Union of India (supra), Gujarat High Court held that the impugned goods were entitled to the benefit of Notification No.20/2006Cust when they (import goods) were exempt from duty under notification No. 45/2002Cus when imported under DEPB scheme (where the duty is debited to the duty entitlement pass book). The ratio of this judgement is clearly applicable to the present case.

5. In the light of the foregoing, we allow the appeal and remand the case to the primary adjudicating authority for granting consequential relief to the appellant subject to the condition that the burden of SAD has not been passed on by the appellant to any other person.

(Justice G. Raghuram)

President

(R.K. Singh)

Member (Technical)

SSK

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