TMI Blog2020 (9) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... us is available to such containers. We also observe that neither the Show Cause notice nor Order in original, raise any dispute that Flexi Tank Containers are strong enough to withstand and endure the rigours of sea waves. Therefore, durability of the containers in isolation is not in dispute. Only because the containers do not have repeated use, the containers which are otherwise durable benefit of notification cannot be denied - reliance can be placed in the case of M/S. SAM AGRI TECH. LIMITED VERSUS CCE, C ST, HYDERABAD [ 2017 (4) TMI 678 - CESTAT HYDERABAD]. Scope of SCN - HELD THAT:- Learned Counsel also pointed out that apart from the issue of durability, the Adjudicating Authority has also taken a ground for denying the exemption that re-export of the Flexi Tank Containers was not done by the present assessee but by the exporters of liquid cargo and also on the ground that exporters to whom the appellant has sold the Flexi Tank Containers have claimed drawback by factoring in the process of Flexi Tank Containers in the exports. We find that this allegation was not raised in the show cause notice. Therefore, this particular finding is beyond the scope of show cause n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were withdrawn from the premises under Panchnama dated 31.07.2013. A total number of 660 flexi tank containers imported from Pipavav port valued at ₹ 79.20 lakhs lying at plot no. 2, sector 10A were detained and subsequently it was seized vide panchnama dated 16/08/2014. Consequently, a show cause notice dated 17/10/2014 was issued to the appellant whereby it was proposed to deny exemption notification no. 104/94-Cus, to confiscate the imported goods under section 125 of Customs Act, to demand customs duty and penalty on M/s JR Roadlines Pvt. Ltd. as well as Director of the M/s JR Roadlines Pvt. Ltd. and penalty was also proposed to be imposed on M/s Thirumalai Cargo Services Pvt. Ltd., Chennai. The Adjudicating Authority vide order in original No. MCH/PR.COMMR./PVT/24/2015-2016 Dated 30/09/2015 confirming the charges and proposals made in the Show cause Notice. Therefore, the appellant M/s JR Roadlines Pvt. Ltd. and its Director Shri Dhiren Rajde filed appeals. In a separate proceedings, against assessment of two bills of entries, wherein Assistant Commissioner, the assessing officer denied the exemption under notification 104/94-Cus, M/s JR Roadlines Pvt. Ltd. challenged th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Container have to be durable to withstand the rigours of transport by road/rail and sea and accordingly, tanks material for the tanks undergo the following tests as per the Code of Practice prescribes by the Containers Owners Association: a) Rail Impact Test b) Puncture resistance or impact strength c) Seal (weld) strength d) Tensile strength and elongation e) Tear Resistance f) Temperature tolerance g) Valve Leakage Testing He referred to the relevant code of practices prescribing the aforesaid testing which is annexed to the appeal papers. He further submits that during the sea voyage on account of movement of the ship and wave- induced dynamic forces, the liquid cargo in the Flexi Tank undergo sloshing and surging and the Flexi Tank is durable and strong enough to withstand the impact of such movement of the liquid within the Flexi Tank. The consignments of Flexi Tank Containers were imported by the Appellant for exporting of bulk liquid cargo by exporters from India. He submits that since the Flexi Tank Containers are imported after fitting of liquid cargo, the same is re-exported, the said containers are durable. Therefore, the appellant have claimed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that Flexi Tank Containers are strong enough to withstand and endure the rigours of sea voyage. He further submits that the Principal Commissioner while adjudicating the case denied the exemption also on the ground that the re-export of the Flexi Tank Container was made by the exporters of the liquid cargo and not by the appellant. This is not tenable in law for the reason that, firstly, this was not the ground on which the Show cause notice proposed to deny the benefit. Therefore, any finding in the order which is beyond the scope of show cause notice, the order will not sustain. In this regard, he placed reliance on the following judgments: a) Prince Khadi Woollen Handloom Prod Co-op Indl. Soc. Vs CCE-1996 (88) ELT 637 (SC) b) CCE vs Ballarpur Industries Ltd. 2007 (215) ELT 489 (SC) 2.1 He further submits that even in case of steel containers, the container may be imported by one person or company and given to exporters who export their goods in the containers. This is a regular practice and Customs do not deny exemption merely because the importer of the container is different from the exporter of the goods which are exported in the containers. The purpose and object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly re-usable containers can be called durable containers. As held by the Tribunal in the aforesaid decisions, capability of re-use is only one criterion of durability but not the only criterion and if the container is strong enough to withstand a sea voyage for export, it is considered to be of durable nature notwithstanding that it may not be reused for repeated voyages. The word durable nature has been defined as capable of lasting remaining useful, for a period, and if the container is capable for a sea voyage, it satisfies the condition of being durable nature. Without prejudice to the above submissions on merit, on the point of limitations, he submits that the goods were imported and cleared during the period January 2011 to June 2012 whereas the show cause notice dated 17/10/2014 was issued beyond the normal period of limitation of one year as specified in Section 28(1) of the Customs Act 1962. Therefore the Show Cause Notice is entirely time barred. He submits that on claim of exemption notification, larger period of limitation can have no application. The appellant had duly filed the Bills of entry with Customs in which the goods were correctly described as Flexi Tank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncipal Commissioner where against M/s JR Roadlines have filed the appeal. He also reiterated the grounds of appeal made in the Revenue s appeal. He also filed a detailed written submission dated 14/09/2020. He also placed reliance on the following: 1. Circular no. 73/2002-Cus dated 07.11.2002 2. Circular no. 69/2002-Cus dated 25/10/2002 3. Paul Abrao Agencies Pvt. Ltd. vs CC, Chennai 2017 (349_ ELT 676 (tri-Chennai) 4. CC (Import), Mumbai vs Dilip Kumar and Company 2018 (361) ELT 577 (SC) 5. Union of India vs VVF Ltd. 2020 (372) ELT 495 (SC). 6. Hindustan Petroleum Corporation Ltd. vs CCe, Pune-I- 2020-TIOOL-1357-CESTAT-MUM 7. Venus Petrochemicals (Bombay) P Ltd. vs CCE, Kandla 2019(366) ELT 176 (Tri Ahmd) 8. Union of India vs Jain Shudh Vanaspati Ltd.1996 (86) ELT 460 (SC) 9. Titanide Coating P Ltd. vs Assistant Collector 1997 (96) ELT A161 (SC)- 10. Asia Motors Works vs CC, Kandla 2020 (371) ELT 729 (Tri-Ahmd) 4. We have heard both sides and perused the records. The limited issue to be decided in the present appeal is whether the Flexi Tank Containers imported by M/s JR Roadlines is durable in nature and are eligible for exemption under notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same is fitted in the steel containers and in the Flexi Tank Containers the liquid cargo is filled. The duly filled cargo is loaded on the ship/vessel and the same is exported. In our view, the containers once imported and then re- exported after fitting in steel containers and duly filled with liquid cargo itself shows that this entire process is possible only if the container is durable. The Flexi Tank Container can endure an ocean voyage for liquid cargo and the same was imported for exporting bulk liquid cargo. During sea voyage on account of movement of ship and wave induced dynamic forces, the liquid cargo in the Flexi Tank Containers undergoes sloshing and surging. Therefore, the Flexi Tank Containers must be durable and strong enough to withstand the impact of such movement of the liquid in the Flexi Tanks. Accordingly, as per the use and nature of the containers as discussed above it has to be durable containers. The above facts are not in dispute even by the Revenue. The Revenue s contention is only that the same is not reused and has no repeated use. We find that this Tribunal in a number of judgments held that merely because the container has no repeated use but if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voyage from India, it is undoubtedly durable in nature. c) CC vs Indofil Chemicals Company-2006 (199) ELT 871 The Revenue is aggrieved by the order of the Commissioner of Customs (Appeals), extending benefit in terms of Notification No. 104/94-Cus., dated 16-3-94 to 6650 pieces of laminated paper bags imported by the respondents herein for packing chemicals for export purpose. 2. We have heard both sides. We find that the only issue for determination viz. as to whether the goods in question are capable of repeated use, has been decided by the Tribunal in the case of CC v. Assam Company (India) Ltd. [1995 (78) E.L.T. 168], wherein tea sacks made of four ply printed paper with aluminium inner foil were held to be strong enough to withstand sea voyage from India and held to be durable containers entitled to the benefit of exemption under Notification 97/79- Cus., dtd. 2-5-79 which is pari materia with Notification No. 104/94 which is under consideration in the present appeal. Following the ratio of the above order, we see no reason to interfere with the impugned order of the Commissioner (Appeals). We accordingly uphold the same and reject the appeal. d) Sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, in the case of the type of containers imported by the appellants, a test was required to be conducted before deciding whether such containers could be considered as durable or not. But no test report/technical literature or market report has been produced before us by either side. In the circumstances, we find that the material produced before us is insufficient to record a specific finding in this regard. According to the Concise Oxford Dictionary (New Seventh Edition), container means vessel, box etc. designed to contain some particular things. The word durable has been defined as capable of lasting , remaining useful for a period . . We agree with the learned Counsel for the respondents that the expression durable has been used in Notification No. 97/79 in the context of the utility of the container for packing tea for export and since the tea sack made of four ply printed paper with aluminium inner foil was strong enough to withstand sea voyage from India, it is undoubtedly durable in nature. In the case of Dimakusi Tea Co. Ltd. v. Collector of Customs, Calcutta reported in [1995 (75) E.L.T. 158 (Tribunal)] the Tribunal held that durability is a relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice nor Order in original, raise any dispute that Flexi Tank Containers are strong enough to withstand and endure the rigours of sea waves. Therefore, durability of the containers in isolation is not in dispute. Revenue is also harping on the point that subject containers do not have repeated use, therefore, it is not durable. This very issue has been considered time and again in the above cited judgments. Therefore, only because the containers do not have repeated use, the containers which are otherwise durable benefit of notification cannot be denied. Learned Counsel also pointed out that apart from the issue of durability, the Adjudicating Authority has also taken a ground for denying the exemption that re-export of the Flexi Tank Containers was not done by the present assessee but by the exporters of liquid cargo and also on the ground that exporters to whom the appellant has sold the Flexi Tank Containers have claimed drawback by factoring in the process of Flexi Tank Containers in the exports. We find that this allegation was not raised in the show cause notice. Therefore, this particular finding is beyond the scope of show cause notice. The Adjudicating Authority cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort has been submitted. As per the condition of notification, the appellant had executed the bond which after fulfilment of condition that re-export of the container duly filled with liquid cargo bond has been cancelled. The appellant with a bonafide belief claimed the exemption notification 104/94-Cus without making any mis-declaration. The Custom department has very consciously after satisfying themselves allowed the exemption notification and not only that they have cancelled the bond after satisfying that export obligation is fulfilled. In this undisputed fact, there is no suppression of fact on the part of the assessee and custom department was free to interpret in their own manner whether the exemption to be allowed or not. Therefore, it cannot be said that there is any suppression of fact, mis-statement or misdeclaration on the part of the assessee. Therefore, the entire demand relates to appeal no. C/11972-11973/2015 is unsustainable also on time bar apart from merit of the case. As regard the Revenue s submission relying on board circulars, we find that the same board circular has been considered in the judgments cited. Therefore, the Tribunal s judgments will prevail over ..... X X X X Extracts X X X X X X X X Extracts X X X X
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