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2024 (6) TMI 785 - AT - CustomsEntitlement to duty exemption under N/N. 25/2023-CUS dated 01.04.2023 - Import of Lithium Ion Battery - covered by the description of import item Automative Battery so as to allow to them under Transferrable DFIA License purchased by the Respondent which was issued under SION C-969 against export of Agriculture Tractor or not - HELD THAT - The respondent in the rejoinder points out that imported consignment has now been registered with the DGFT office as well as the Lithium Battery is one type of automotive battery the other being the conventional battery and the import of one against the other cannot be permitted as have been decided by the Adjudicating Authority - He also points out that it is the capability of use which is to be decided. This is a factor and not the import and export has to be other similar kind of automotive battery or common parlance cannotations. He further points out that certificate of IIT engineers about the capability of Lithium Ion Battery was duly produced and considered in the case of K S Enterprises also. It is found that DFIA scheme requires broad catogerisation are same and then as capable being used in electrical vehicle . There are merits in the impugned order and the appeal of the Department is liable to be dismissed with consequential relief to the party.
Issues Involved:
1. Whether Lithium Ion Battery imported by the Respondent is covered by the description of import item "Automotive Battery" under Transferrable DFIA License. 2. Entitlement to duty exemption under Notification No. 25/2023-CUS dated 01.04.2023. Summary: Issue 1: Coverage of Lithium Ion Battery under "Automotive Battery" Description The dispute centers on whether the Lithium Ion Battery imported by the Respondent qualifies as an "Automotive Battery" under the Transferrable DFIA License issued under SION C-969 against the export of "Agriculture Tractor." The Respondent argued that the broad categorization under the DFIA Scheme, based on the "capability of being used" test, should allow the Lithium Ion Battery to be classified as an Automotive Battery. They relied on expert opinions, including a Technical Opinion from IIT Kharagpur, and various judicial precedents to support their claim. The Tribunal referenced several cases, including K S Enterprises Vs. CCE, to emphasize that exemption notifications under export schemes should be interpreted liberally. Issue 2: Entitlement to Duty Exemption The Respondent argued that the description "Automotive Battery" in the DFIA should include Lithium Ion Batteries used in electric vehicles, including agricultural tractors after suitable modifications. They cited multiple judgments and expert opinions to assert that the term "Materials" required for manufacturing export products should cover items usable with some processing. The department countered that the specific description and usage conditions under Notification No. 19/2015-Customs must be strictly adhered to, and the benefit should not be extended to items not explicitly mentioned. The Tribunal found that the DFIA Scheme does not require a one-to-one correlation between the exported and imported products, and the term "Automotive Battery" should be interpreted broadly to include Lithium Ion Batteries. The Tribunal also noted that the department's reliance on the Supreme Court judgment in C.C. Mumbai Vs. Dilip Kumar & Company was misplaced, as there was no ambiguity in the notification language. Conclusion: The Tribunal concluded that the imported Lithium Ion Batteries are covered under the description of "Automotive Battery" in the DFIA and are eligible for duty exemption under Notification No. 19/2015. The appeal by the department was dismissed, and the decision of the lower authority denying the benefits was deemed incorrect and illegal. The Tribunal emphasized that the DFIA Scheme should be interpreted liberally to encourage innovation and the use of new technologies.
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