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2013 (9) TMI 103 - AT - Customs


Issues Involved:
1. Interpretation of Notification No. 21/2002-Cus, specifically Serial No. 228.
2. Whether the benefit of the notification extends to goods required for running, repair, and maintenance of the refinery.
3. Whether the entries Nos. 44 & 45 of list 17 become meaningless if a strict interpretation is applied to Serial No. 228.
4. Whether the terms running, repair, and maintenance are restricted only till the setting up of the refinery.

Issue-wise Detailed Analysis:

1. Interpretation of Notification No. 21/2002-Cus, specifically Serial No. 228:
The appellant imported mobile crawler cranes for a petroleum refinery and claimed a concessional rate of duty under Notification No. 21/2002-Cus. The authorities denied this claim, leading to a confirmation of differential duty. The dispute centered on whether the cranes fell under the goods specified in List 17 required for setting up a crude petroleum refinery as per Serial No. 228 of the notification.

2. Whether the benefit of the notification extends to goods required for running, repair, and maintenance of the refinery:
The appellant argued that the benefit should extend to items required for running, repairing, and maintenance, citing Entries 44 and 45 of List 17. They contended that the term "setting-up" should not be limited to the initial phase but should include ongoing processes necessary for the refinery's operation. The Revenue countered that the concessional rate applies only to goods needed for the initial setting up of the refinery.

3. Whether the entries Nos. 44 & 45 of list 17 become meaningless if a strict interpretation is applied to Serial No. 228:
The tribunal considered that a strict interpretation of Serial No. 228 would render Entries 44 and 45 meaningless. These entries specifically provide exemptions for special maintenance systems and items used for running, repairing, or maintenance of the refinery. The tribunal emphasized that an interpretation rendering part of the notification meaningless should be avoided.

4. Whether the terms running, repair, and maintenance are restricted only till the setting up of the refinery:
The tribunal noted that the terms running, repair, and maintenance refer to continuous activities that cannot be restricted to the initial setting up of the refinery. The tribunal cited the Supreme Court's interpretation in similar cases, suggesting that the term "for setting up" should be read as "intended for setting up," thus covering items used in the refinery's ongoing operation.

Separate Judgments:

Judgment by Member (Judicial):
The Member (Judicial) concluded that the benefit of the notification extends to goods required for running, repair, and maintenance of the refinery. They argued that a harmonious construction of the notification and the entries in List 17 supports this interpretation. The Member (Judicial) relied on various legal precedents and the Supreme Court's interpretation to support their view.

Judgment by Member (Technical):
The Member (Technical) disagreed, stating that the exemption under Serial No. 228 applies only to goods required for the initial setting up of the refinery. They argued that once the refinery is set up, the benefit cannot be extended to goods imported for maintenance or repair. The Member (Technical) cited legal principles of strict interpretation of exemption notifications to support their view.

Final Decision:
The matter was referred to a third Member (Judicial) due to the difference of opinion. The third Member concurred with the Member (Judicial), holding that the benefit of the notification extends to goods required for running, repair, and maintenance of the refinery. This interpretation avoids rendering Entries 44 and 45 meaningless and aligns with the broader purpose of the notification.

Conclusion:
In view of the majority decision, the impugned order was set aside, and the appeal was allowed with consequential relief to the appellant.

 

 

 

 

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