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2022 (3) TMI 1327 - CESTAT MUMBAIBenefit of exemption - second-hand slurry seal machine for filling up cracks in roads (slurry paver) - Classification of imported goods - non-acceptance of the intent of ‘deployment of the goods in construction of roads’ on the finding that the equipment could be used only for repair/maintenance work of existing roads on the part of Revenue - HELD THAT:- It is seen from the communication of 17th April 2009 that work of ‘micro surfacing of various roads’ for a period of one year under ‘M.Maintenance-I PWD (NCTD)’ was awarded to the appellant. The exemption notification envisages concessions from the standard rate of duty upon demonstrated qualification, as contract awarding authority or as contractor of project for ‘construction of road’, and upon furnishing of certain undertakings and certifications. In the present dispute, the certifications are not of relevance and any breach of the undertaking is to be elicited upon post-importation deployment of the equipment. The apprehension of the original authority, and of the reviewing authority, that the goods were intended to be used in breach of the condition of exemption is built upon their determination of the permitted activity as cutting of paths to be levelled and hardened before being layered with macadam – just enough provide a ride smoother than on the cobblestoned highways of ancient Rome – with no immediate requirement of ‘microsurfacing’ until a few years down the line. In GAMMON INDIA LTD, CHARAN SINGH, UMAKANT TIWARI VERSUS COMMISSIONER OF CUSTOMS (IMPORT) MUMBAI [2018 (12) TMI 1122 - CESTAT MUMBAI], the Tribunal makes it abundantly clear that any violation of the post-importation conditions is to be responded to by enforcement of the undertakings furnished at the time of import and not by pre-emptive burdening of some part of the ‘construction of ‘roads’ project by executive overreach. The eligibility of the project itself or the status of the appellant, as contractor eligible to import specified goods for the project, is not in dispute; it is the use that the impugned equipment has for the project that is with the original authority restricting the proceedings to the eligibility of the impugned goods at the threshold. Without examining the nature of the project itself, a finding on use or misuse – intended or actual – is beyond the scope of assessment to duties of customs as the actual usage of the goods thereafter are not the subject of the impugned proceedings. In COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI VERSUS M/S. DILIP KUMAR AND COMPANY & ORS. [2018 (7) TMI 1826 - SUPREME COURT], the Hon’ble Supreme Court adjured rigid application of the contents of exemption notification. As narrated supra, the eligibility for availment of the notification at the time of import is not under challenge of Revenue and entitlement to the exemption is within the terms of the notification. The cautionary directive of the Hon’ble Supreme Court is not disharmonious with the findings of the first appellate authority. The appeal, itself, is based on apprehension of likely usage after clearance by breach of condition in notification that lies entirely within the realm of empirical evidence of actual usage for purposes not intended in the notification which has not been brought on record by Revenue in the present proceedings. The strict enforcement that is obligated by the cited decision is no less pertinent to interpretation of the stage of denial or consequent recovery, as the case may be, in the exemption notification by customs authorities. In the present case, the inclusion of the description of the imported goods in the enumeration of the eligible equipment makes it abundantly clear that, even if its purpose is to fill cracks on road surface, its utility in eligible projects is not deniable. Furthermore, we cannot conjecture the possibility of resort to filling up of cracks in ‘greenfield’ roads and it would appear that the deployment of this equipment, so essential in upgradation of existing roads, for other than ‘greenfield’ road development, is within the intent of the notification. There is nothing on record to indicate that the proposed project was not intended for permissible upgradation. There is no reason to conclude that the road construction, as intended in the exemption notification, is limited to ‘black topping’ of surface or that the importer is likely to indulge in ineligible activities during the period of lock-in prescribed in the exemption notification. The importer has complied with all the conditions specified in the said notification and it would be incorrect in law to deny exemption allowed by the first appellate authority - appeal dismissed.
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