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2021 (8) TMI 391 - CESTAT CHENNAIImport of capital goods availing the benefit of exemption notification No. 153/93-Cus dated 13.8.1993 - requirement of fulfilment of condition of import being goods are imported into India for being used for the export of software out of India under STP hundred percent export oriented scheme - both sides want the impugned order to be set aside. Revenue wants the matter to be remanded to the original authority after setting aside the impugned order. HELD THAT:- ILPL has, admittedly, availed the benefit of the exemption notification which is available subject to some conditions. Condition (ii) as applicable during the relevant period mandates “the goods shall only be used for the purpose of export of software by the STP units located in the premises of ISP”. It is undisputed that ILPL used the goods for both STP and non-STP units. In the impugned order, partial exemption was given on proportionate basis in proportion to the land used for STP and non-STP units. There is no provision in the exemption notification to allow partial exemption - What the Commissioner has done is to convert the full exemption available under this notification into a proportionate partial exemption. The Commissioner has no power to modify an exemption notification while applying it. What the Commissioner has done is to convert the full exemption available under this notification into a proportionate partial exemption. The Commissioner has no power to modify an exemption notification while applying it. If the conditions of the exemption notification were not fulfilled, can the adjudicating authority still give the benefit of the exemption notification or will it amount to modifying the exemption notification? - HELD THAT:- Section 111(o) of the Customs Act, 1962 states that any goods exempted, subject to any condition, from duty or any prohibition in respect of the import thereof under this Act or any other law for the time being in force, in respect of which the condition is not observed unless the non-observance of the condition was sanctioned by the proper officer. The matter is remanded to the Adjudicating Authority to pass an order citing specific provisions of the exemption notification under which the decisions are taken regarding the availability of the benefit of notification, benefit of depreciation in value. If the Adjudicating Authority decides to sanction non-fulfilment of any of the conditions of the exemption notification as per section 111(o), that must also be indicated. If any confiscation is ordered or penalty imposed, the relevant provisions must be cited. Appeal disposed off.
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