2009 (4) TMI 661 - AT - Customs

Summary

Issues Involved:
1. Classification of imported goods under the Customs Tariff Act.
2. Eligibility for exemption under Notification No. 90/94-Cus.
3. Alternative eligibility for concessional rate under Notification No. 63/94-Cus.

Summary:

1. Classification of Imported Goods:
The appellants contested the classification of their imported CNC Bending machine. The Commissioner (Appeals) upheld the classification under heading 84.62 of the Customs Tariff Act, rejecting the appellants' claim for classification under heading 98.01.

2. Eligibility for Exemption under Notification No. 90/94-Cus:
The appellants argued that the goods should be classified under heading 98.01, which covers machinery for the initial setting up or substantial expansion of a unit, as per Project Import Regulations. They cited Chapter Note 2 to Chapter 98 and Regulation 3(c) to support their claim. They also provided a Chartered Engineer's certificate indicating a 25% increase in production capacity due to the imported machine. However, the tribunal found that the appellants did not fulfill all regulatory conditions, such as finalizing the contract within three months and providing sufficient evidence of substantial expansion. The tribunal concluded that the CNC machine did not independently contribute to the expansion, as other equipment was leased from Maruti Udyog Ltd. Thus, the appellants were not eligible for the exemption under Notification No. 90/94-Cus.

3. Alternative Eligibility for Concessional Rate under Notification No. 63/94-Cus:
The appellants alternatively claimed eligibility for a concessional rate under Notification No. 63/94-Cus, which was not previously raised before the Original Adjudicating Authority or the appellate authority. The tribunal acknowledged the appellants' right to claim this benefit at any stage, citing relevant case law. Consequently, the matter was remanded to the Original Adjudicating Authority to determine the appellants' eligibility for the benefit under Notification No. 63/94-Cus and to recalculate the duty if applicable. The tribunal instructed that the appellants be given an opportunity to present their case before a decision is made.

Conclusion:
The appeal was disposed of with the matter remanded to the Original Adjudicating Authority to consider the eligibility for the benefit of Notification No. 63/94-Cus, dated 1-3-94, and to recalculate the duty accordingly.