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TMI Blog2013 (10) TMI 1258X X X X Extracts X X X X X X X X Extracts X X X X ..... n, as the appellant was having valid licence under the EPCG scheme, issued by the DGFT. The show cause notice was issued on the ground that Notification 97/2004-Cus. is amended vide Notification 72/2007, dated 21-5-2007 whereby the consumables were omitted from the benefit of the Notification. The Revenue was of the view that 'catalysts' are 'consumables in nature', therefore they were not entitled for the benefit of the Notification. Therefore impugned order was passed by denying the benefit of the Notification cited hereinabove. Accordingly, impugned demands have been confirmed. Aggrieved from the same, appellant is before us. 4. Shri J.C. Patel, Advocate with Vipin K. Jain & Ms. Shilpa Balani, advocates appeared before us and submitted that as per the EPCG scheme, the appellant were allowed to import capital goods for initial set up of the plant and spares including refurbished/reconditioned spares, tools, spare refractories, catalysts and consumables and machinery can also be imported for an existing plant. The contention of the ld. counsel is that as per the definition of capital goods as provided under para 9.12 of the Foreign Trade Policy, capital goods means any plant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consumables for existing plant and machinery of the licence holder. Secondly, the word 'consumable' was omitted. Therefore, as per the EPCG under para 5.1A 'spare' (including refurbished/reconditioned tools, spares,) spare refractories are covered and during the period in dispute provided exemption only to spares and not to catalyst. Hence demand is rightly made. 6. It is further submitted that consumables are items which participates in or is required for manufacturing process, but does not necessarily form part of the end-product. Items which are substantially or totally consumed in the manufacturing process will be deemed to be consumables. Admittedly, the catalysts are substantially or totally consumed during the manufacturing process. Therefore they are consumables. It is further argued that the spare parts are not defined in the Notification itself. Therefore, any interpretation is to be based on the end understanding of the same. Therefore, the imported items should be a part meant to replace the component part of the existing plant and machinery. As per the Major Law Lexicon Dictionary the spare part which is used to replace a damaged or worn out component is still a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel, Shri J.C. Patel, submits that the contention urged on behalf of the revenue seeks to make out a new case against it. The new contentions are beyond the show-cause notice as well as the impugned order, therefore cannot be considered while deciding the present appeal. The new contentions which are objected are as follows : (a) That the benefit of exemption available to spare parts under Sr. No. 5 under Notification 97/2004, dated [17-9-2004] should be confined to components, parts of a machinery and not to the catalyst of the kind imported by the appellant, which was in the form of powder or pallets/spherical or cylindrical balls/shapes. (b) That the provisions of Foreign Trade Policy or terms of the EPCG licence cannot be read into the text of exemption Notification No. 97/2004, dated 21-5-2004. (c) That the word 'spares' is used in para 5.1A of the Foreign Trade Policy only in relation to refractories and not catalyst. 10. He submitted that it is well settled law that the Revenue cannot travel beyond the show-cause notice as held by the Hon'ble Apex Court decision in Ballarpur Industries Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing services, including those required for replacement, modernisation, technological upgradation or expansion. It also include packaging machinery and equipment, refractories for initial lining, refrigeration equipment, power generating sets, machine tools, catalysts for initial charge, equipment and instruments for testing, research and development, quality and pollution control. Capital goods may be for use in manufacturing, mining, agriculture, aquaculture, animal husbandry, floriculture, horticulture, pisciculture, poultry, sericulture and viticulture as well as for use in the services sector. 13. Para 5.1A of the Policy defines the import of spares including refractories/tools spares, refractory, catalyst and consumables for existing plant and machinery. Notification 97/2004, dated 17-9-2004 gives the exemption at Sr. No. 1 for capital goods for pre-production, production and post-production including second-hand capital goods and at Sr. No. 5 for Spare parts including consumables for the existing plant and machinery of the licence holder. The said Notification got amended by way of Notification 72/2007, dated 21-5-2007 wherein at Sr. No. 5, the word 'consumables' was om ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TP 2004-2009 the provisions of import of capital goods are contained in para 5.1 and spares are in para 5.1A. We find that the licence as well as policy treated spare and catalyst to be item distinct from 'consumables.' The deletion of word 'consumables' from Sr. No. 5 of the table to the Notification do not have any impact for import of spare catalyst under the EPCG since spare, catalyst are items independent and distinct from consumable since despite the omission spares continued to be covered under Sr. No. 5 of the table to the Notification also by 5.1A of the policy. The omission of the word 'consumables' do not affect for the import of catalyst as spare as per EPCG licence. 17. The contention of the ld. Special counsel that catalyst are not spare which was not the issue before the adjudicating authority. The catalyst were shown separately in the FTP and same were mentioned in the licence granted to the appellant under EPCG scheme allowing the import under para 5.1A of the FTP and same were cleared by the appellant at the time of importation by endorsement in the EPCG licence. Therefore, we do agree with the ld. Counsel for the appellant that the policy and Notification a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed to be cleared as catalyst duty free. Therefore, the allegation of suppression is not sustainable; accordingly, the extended period of limitation is not invocable in the facts of this case. 20. We further find as per Notification 97/2004-Cus., dated 17-9-2004, the exemption for spare parts is given at Sr. No. 5 but the allegation against the appellant is that they have cleared the catalyst at Sr. No. 1 as capital goods. This allegation against the appellant is not sustainable as in the EDI system. Sr. Nos. 1 & 2 were generated but did not include Sr. No. 5. This fact has been corroborated by the evidence produced by the appellant during the course of adjudication as well as before us. Moreover, we find that as per the FTP para 5.1A the appellant are allowed to import 'catalyst'. Para 5.1A deals with only spare parts, catalyst and at the time of clearance of goods, the EPCG licence were produced by the appellant before the customs officers for endorsement in their licence. Therefore, after examining the licence, the goods were assessed and allowed to be cleared duty free. In that situation, the allegation of suppression against the appellant again does not survive. Adm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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