TMI Blog2011 (5) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... the said exemption, whereas Public Sector Undertakings (PSUs) under the Ministry of Defence or sub-contractors of such PSUs were allowed to import goods under the said notification - The exemption shall apply only if the certificate contains the prescribed information and is signed by an officer not below the rank of a Joint Secretary to the Government of India in the Ministry of Defence. - AAR/Cus/05/ 2011 - - - Dated:- 13-5-2011 - Present for the Applicant : Sh. Prakash Shah, Advocate Present for the Commissioner : Sh. Sumit Kumar, SDR Sh. Rajinder Kumar Gupta, SDR Ruling (J.K.Batra) M/s AmSafe Services India Pvt. Ltd., the applicant, is a subsidiary company of AmSafe Bridport Limited, U.K. The applicant proposes to import and supply parts of aircraft and ground handling equipment to Hindustan Aeronautics Limited (HAL), a Public Sector Undertaking in India. The applicant intends to import the goods and supply to HAL after clearance from the Bangalore Customs. Alternatively the applicant would import and stock the goods in the private bonded warehouse approved by Customs under Section 58 of the Customs Act, 1962 and supply goods to HAL on the basis of speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication under a more specific description as parts of aircrafts under heading 8803 of the First Schedule. The applicant has relied upon rule 3 of the General Rules for the Interpretation of the Import Tariff in support of its contention. The applicant has also cited the ruling given by this Authority on the application made by M/s One Stop Airlines [2009(236) ELT 379 (AAR)] wherein it was observed that Nuts, bolts, rivets, screws, washers, couplings etc, used in the process of servicing / repairing an aircraft s engine can be treated as parts of aircraft provided they are specially meant for use therein . The applicant has also referred to a decision of the Customs, Excise Gold (Control) Appellate Tribunal (CEGAT) in the case of Indian Airlines Vs Collector of Customs [1993 (64) ELT 473(Tribunal)] wherein cabin chairs manufactured by the Boeing company or their vendors as per prescribed standards were classified as aircraft parts. 5. The Commissioner of Customs in his comments has contested the classification of some of the items such as connectors, washer, nut, bolt, screw, switch, o-ring, plug, as parts of aircrafts and has claimed that these goods merit classification un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided by the applicant wherever necessary and to identify the items where the dispute regarding classification still persisted. 7. The Commissioner has since indicated vide its letter dated 12th April, 2011 that pursuant to the directions of the Authority the applicant had a meeting with the officers of the Department. Apparently the applicant was explained the basis adopted by the Department for the classification under HSN of the various parts proposed to be imported by the applicant. The Commissioner has informed through the Departmental Representative appearing in the proceedings that vide its letter dated Ist April, 2011, the applicant has revised the HSN classification of the goods which they intend to import and sell in India and therefore there were no disputed classifications. In its aforesaid letter the applicant has informed the Assistant Commissioner of Customs as follows: Based on the aforesaid discussions, we have revised the HSN classification of the goods which we intend to import and sell in India. We have enclosed the said indicative list of HSN classification of the goods (marked as Annexure A). We would request your goodself to kindly confirm the accuracy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such as range-finders, predictors, platters, computers; sight dial; signal equipment including wireless equipment and component parts thereof, used exclusively by the defence services; test equipment for radars for service use; military bridging stores and equipment; ASDIC and ECHO sounding equipment; specialised cameras for Air Force use; mines sweeping gear and parachutes; (v) Radars, torpedoes, sonar sets, mine laying gear, diving equipment and their spares, accessories, jigs, tools testing equipment and components; (vi) Spare parts, accessories, jigs, tools, testing equipment, components, special raw materials and half wroughts like steel forgings and castings, to be processed into finished components for armoured and specialised vehicles peculiar to the defence services; (vii) Guided weapons and their Accessories; (viii) Components, spares, jigs, fixtures, tools, dies, moulds and test equipment required for the manufacture and testing of guided weapons and their accessories; (ix) Raw material and special materials required for the manufacture of guided weapons and their accessories; (x) Rock drills and breakers; (xi) All types of ground support equipment for guided weapons a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antiate the aforesaid submission. 11 As regards fulfillment of conditions for availing the exemption, one of the conditions is that the contractor / sub- contractor / PSU shall furnish a certificate at the time of import indicating the details of the order placed by the Ministry of Defence on the contractor / sub-contractor / PSU and the details of the purchase order in turn placed by the said contractor / sub-contractor / PSU on the foreign suppliers. The applicant submits that it is required to comply with the requirements prescribed in clause (ii) of the Explanation to be eligible for claiming the benefit of the exemption notification. The Explanation in the condition specifies the authorities who shall sign the certificate for being entitled to the exemption. The applicant informs that it will produce a certificate issued by HAL signed by its General Manager, Procurement Division and countersigned by Managing Director of HAL. The applicant claims that such a certificate would be in substantial compliance of requirements specified in the notification and hence the applicant would be eligible for the exemption. The applicant has cited the decision of the Customs, Excise and S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .10 subject to fulfillment of the corresponding conditions irrespective of the fact whether such goods are classified under heading 8803 or any other heading of the First Schedule to CTA, 1975. 15. As regards compliance with the conditions specified against entry at Serial No. 10 of the Table in the Notification No. 39/96, the applicant has claimed that it falls within the ambit of clause (ii) of the Explanation to the conditions. As may be observed from the text of the clause (ii), the said clause applies to imports by Public Sector Undertakings of the Central Government under the Ministry of Defence. During the course of arguments on being asked it was clarified by the applicant that the declaration for the imported goods namely the Bill of Entry will be filed by the applicant in its own name and not by HAL even though the imports are being made for supplies to HAL. As per clause (26) of Section 2 of the Customs Act, 1962, importer in relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes any owner or any person holding himself out to be the importer In the facts before us, the goods will be importe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion No. 39/96-Cus dated 23.07.96 bearing the signatures of the Under Secretary to the Government of India. It is the version of the text of the notification as on the date of issue (without subsequent amendments). It is observed that the paragraph pertaining to the conditions against Serial No. 10 of the Table of Notification is identical in all respects (including punctuations) to the copy of the relevant portion annexed by the applicant to its application for the ruling. It is, therefore, assumed that there is no error or misprint in the extract of the notification in relation to Serial No. 10 of the Table. 18. In the aforesaid background, there does not appear to be any ambiguity in so far as its scope and application of the exemption notification are concerned. The terms of condition (a) require that imports should be made by (i) Government of India (ii) The contractors of the Government of India (iii) State governments (iv) Public Sector Undertakings of Central Government or the State Governments or (v) the sub-contractors of such Public Sector Undertakings. The expression sub-contractor appears to have been used in the condition (a) because Publ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and sub-contractors of such PSUs. In all these cases, the certificate was required to be signed by an officer not below the rank of Joint Secretary in the Ministry of Defence. (Certification by functional head of a PSU in the case of imports by PSU was replaced by certification by Joint Secretary). 19.4 Further amendment was carried out in the exemption notification 155/94-Cus by Notification No. 135/95-Cus. dated 04.9.1995, wherein contractors of the Govt. of India being contractors of Research and Development Laboratories or Establishments under the Ministry of Defence as also the PSUs were required to produce the duty exemption certificate not by a Joint Secretary in the Ministry of Defence but by signatories in their own organizations. Certification by Joint Secretary was continued in respect of all importers (other than Central or State Govts.). 19.5 The aforesaid exemption contained in Notification No. 154/94-Cus. dated 13.7.1994 was replaced by the exemption notification in its current form that is Notification No. 39/96-Cus. dated 23.7.96. 19.6 It is obvious, therefore, that the exemption in Notification No. 39/96-Cus. dated 23.7.96 (i) is intended for imports b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Defence, it had not been issued by the Joint Secretary in the first person. The certificate also did not carry a date of issue. The text of the certificate otherwise met the requirements of the notification. It was in this background that the CESTAT observed that the deficiencies pointed out by the Revenue were procedural in nature and that the relevant conditions laid down in the notification were substantially complied with by the importer and it allowed the appeal. It is to be noted that certificate in that case had been counter signed by a Joint Secretary in the Ministry of Defence. In the applicant s case the certificate proposed to be produced for claiming exemption would be signed by the General Manager / Managing Director of HAL and not by a Joint Secretary in the Ministry of Defence. The decision of CESTAT does not support the applicant s case. 22. In the case of Mangalore Chemicals and Fertilizers Limited pertaining to a sales tax matter, there was no dispute that the appellant in that case was entitled to the benefit of a notification. The appellant had filed all the claims and applied for necessary permissions in time. The controversy was whether the appellant not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Division of HAL and countersigned by a Managing Director of the said PSU. 25. The questions raised by the applicant are therefore answered as follows: Question. 1 Whether the applicant would be correct in classifying the goods sought to be imported under Tariff Classification 8803 (Parts of goods of heading 8801 or 8802) as the goods shall be used as parts of aircrafts? Ans: Since the concerned Commissioner and the applicant have agreed upon the classification of various items proposed to be imported by the applicant, Authority declines to issue any ruling on the classification in the absence of full facts being placed before the Authority for its ruling. Question 2 Whether the applicant would be correct in availing the benefit of exemption from basic Customs duty and additional Customs duty under Entry No. 10 of notification No. 39/96-Cus dated 23.7.96 (as amended) if the goods (as mentioned in Annexure III of the application) are supplied to HAL who shall use (either as raw material, capital goods or consumables) the same for manufacturing or servicing of the aircraft to be supplied to Ministry of Defence? Ans: Exemption to the goods specified in column (2) against Serial No. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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