Welcome Group Park Sheraton Hotel & ... vs Commissioner Of Customs (Sea)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CHENNAI

Appeal No.C/231/2005

[Arising out of Order-in-Appeal C.Cus.No.74/2005 dt. 22.3.2005 passed by the Commissioner of Customs (Appeals), Chennai]

Welcome Group Park Sheraton Hotel & Towers Appellant

Versus

Commissioner of Customs (Sea), Chennai Respondent

Appearance:

Shri Hari Radhakrishnan, Advocate For the Appellant

Shri Kailash Chandra Jena, ADC (AR) For the Respondent

CORAM :

Honble Shri R. Periasami, Technical Member Honble Shri P.K. Choudhary, Judicial Member

Date of Hearing/Decision : 28.10.2015

FINAL ORDER No.41482/2015

Per R. Periasami

This appeal is arising out of Order-in-Appeal dt. 22.3.2005 passed by Commissioner of Customs (Appeals), Chennai. This is the second round of litigation before Tribunal.

2. The brief facts of the case are that appellant is a hotel industry who obtained EPCG licence No.04500471/1/13/10/1/01 dt. 16.2.1998 for import of light fittings etc. and claimed benefit of Notification 28/97 dt. 1.4.97 under EPCG scheme. In the first round of litigation, this Tribunal vide Final Order No.93/2004 d. 22.1.2004 remanded the matter to the adjudicating authority. The relevant para-5 of the Tribunal's final order is reproduced as under :-

"5. On a careful consideration, we notice that the Board has issued the above noted circular clarifying the issue in respect of the items mentioned in that circular for grant of the benefit provided the party has been issued with EPCG licence. The appellant claimed to have obtained the EPCG licence and also to have fulfilled the export obligation. In the circumstances, we are remanding the issue to the original authority to re-consider the issue in the light of the circular cited above and decide the case expeditiously within a period of 6 months. Appeal is allowed by remand to the original authority."

The adjudicating authority in the de novo order again denied the benefit and confirmed the duty and the same was upheld by the Commissioner (Appeals).

3. Ld. Advocate appearing for the appellant submits that they have imported the goods by licence covered under EPCG scheme. He produced copy of licence available at page 9 of the paper book and submits that Tribunal remanded the matter to lower authority to consider the Board's circular dt. 26.9.2002. The said authority held that circular issued was in the context of another EPCG Notfn 29/97 and not related to Customs Notfn 28/97 dt.1.4.97 and on this ground, the adjudicating authority denied Board's circular and also denied the benefit. He further submits that imported items are capital goods viz. Architectural Lightings-Fax/10.10.98 covered under EPCG Licence under Sl.No.5 of the List. He submits that this Tribunal in the case of Appu Hotel Ltd. Vs CC Chennai - 2008 (226) ELT 385 (Tri.-Chennai) wherein this Bench has allowed benefit of Notfn No.28/97 and 29/97 for import of lighting equipments for hotel industry. He further submits that Revenue preferred appeal against this Tribunal's order before the Supreme Court wherein the Hon'ble Supreme Court dismissed the Revenue's appeal as reported in Commissioner Vs Appu Hotel Ltd.  2010 (256) ELT A92 (SC). He further submits that they have fulfilled the export obligation and consequently cancelled the bank guarantees. He pleaded for setting aside the impugned order and for allowing the appeal with consequential relief as they have already paid the differential duty.

4. Ld. A.R reiterated the findings of OIO and OIA.

5. After hearing the submissions of both sides, we find that the Tribunal in their order dt. 22.1.2004 had categorically taken into consideration the Board's circular No.62/2002 dt. 26.9.2002 wherein the Tribunal directed the lower authority to consider the Board's circular whereas we find that both the adjudicating authority and the appellate authority have interpreted the Board circular only refers to Notfn 29/97. We reproduce Para 3 & 4 of the Board's circular dt. 26.9.2002 as under :-

"2. MOC&I/DGFT, DG (Tourism), various Hotel Associations and other individuals have, however, been representing to this Ministry for quite some time that service providers in the hotel sector actually need the aforesaid consumer items as well for rendering service and earning foreign exchange for the purpose of fulfilling export obligation under EPCG Scheme. Hence, it is not proper to restrict import of aforesaid consumer items to such service providers. It has also been contended that in the case of service providers, the situation is slightly different because, whereas a manufacturer exporter fulfills his export obligation under EPCG Scheme by exporting resultant product manufactured out of imported capital goods, the service provider earns foreign exchange by rendering service through capital goods/equipments imported under EPCG Schemes and fulfills his export obligation. The aforesaid rider specified in 39/2000 has also created a piquant situation in as much as in many cases DGFT authorities have issued EPCG licences to service providers permitting import of these consumer items but Customs have refused to extend EPCG benefits.

3. The?issue has been re-examined in Board and it has been decided that service providers who actually require consumer items like carpets, crockery, marble, chandeliers etc. shall be allowed EPCG benefit. Chairman, CBEC has ordered that the rider appearing in DOR Circular No. 39/2000-Cus. may, therefore, be deemed to be deleted. Import of these consumer items should also be allowed wherever DGFT authorities have issued EPCG Licences for these items and the same is valid to cover imported goods."

On perusal of the above Board's circular, it is abundantly clear that Board has categorically clarified that industries are eligible to import consumer items including Chandeliers under EPCG licence. There is no where any mention of any notification as held by both the lower authorities. Further, we find that this issue stands settled by the Hon'ble Supreme Court in the case of Commissioner Vs Appu Hotel Ltd. (supra) where this Tribunal's order in the case of Appu Hotel Ltd. Vs CC Chennai (supra) was upheld. The relevant para of the Tribunal's order is reproduced below :-

"This appeal filed by the assessee is against denial of the benefit of Customs Notifications No. 28/97 and No. 29/97 both dated 1-4-1997 (EPCG scheme) by the lower authorities in respect of chandeliers and light fittings imported by the assessee. After examining the records and hearing both sides, we note that, admittedly, the above items were covered by the EPCG licences whereunder they were imported. The denial of the benefit is on the ground that the items are not covered by the definition of capital goods given in the Notifications. We find that, under the above Notifications, service providers such as hoteliers like the appellants were eligible to import capital goods at concessional rate of duty under the EPCG scheme. In respect of Notification No. 28/97, capital goods means any plant, machinery, equipment and accessories required for 

(a).........

(b).........

(c) rendering services (vide Explanation to the Notification) In respect of the other Notification, capital goods means any plant, machinery, equipment and accessories required for 

(a).....

(b).........

(c) in the case of hotel industry and tourism industry, plant, machinery, equipment and accessories required for rendering services, specified in Annexure-I. This annexure contains a long list of items required by hotel and tourism industries. The case of the lower authorities is that chandeliers and light fittings do not figure in the list and hence would not qualify for the benefit of the Notification as capital goods. However, we find that lighting equipments figure in the list of capital goods in Annexure-I to Notification No. 29/97-Cus. It cannot be gainsaid that chandeliers and light fittings are required by a hotel industry for rendering services. On these facts, there is no justification in denying the benefit of Notification No. 29/97-Cus. to the assessee, who undisputedly satisfied other conditions of the EPCG scheme. As regards their claim for the benefit of Notification No. 28/97-Cus., we must hold the same view inasmuch as chandeliers and light fittings are equipments/accessories required by a hotel industry for rendering services vide Explanation to the Notification. Again, the Revenue has no case that assessee did not fulfil other obligations under the EPCG scheme.

2.?In the result, the impugned order is set aside and this appeal is allowed."

6. The Hon'ble Supreme Court dismissed the civil appeal filed by Revenue against the aforesaid Tribunal's order. By respectfully following the Hon'ble Supreme Court judgement, we hold that the ratio of the above decision squarely applies to the present case as in the present case appellants have imported architectural light fittings claimed under EPCG licence No04500471/1/13/10/1/01 dt. 16.2.1998 covered under Notfn 28/97. Accordingly, the impugned order is set aside and the appeal is allowed with consequential relief.

(Dictated and pronounced in open court)

(P.K. CHOUDHARY) (R. PERIASAMI) JUDICIAL MEMBER TECHNICAL MEMBER

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