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M/s. Swiber Construction Pvt. Ltd. Versus Commissioner of Customs, Kandla

2015 (9) TMI 1195 - CESTAT AHMEDABAD

Denial of exemption claim - import of C.S. Seamless Line Pipesagainst Warehouse Bills of Entry. - M/s Jindal carried out certain processes such as Coating etc on this imported pipes in the warehouse and thereafter, filed ex-bond Bills of Entry and Coastal shipping bills. - The goods were removed from Mundra to Mumbai High and claimed exemption - Adjudicating authority, observed that the Appellant diverted the goods unathorisedly - Whether the Appellant is eligible to avail the benefit of exempti .....

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nt, out of the total imported machineries, a few of them sold to hospital/dry cleaners. The Adjudicating authority denied the benefit of the exemption notification on the ground that the imported machineries had not been used in the textile industry. The Tribunal after dealing with various decisions and conditions, held that in absence of condition of actual use in the notification, the benefit of notification cannot be denied merely the goods in dispute were used in hospital and not in the text .....

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014-DB - Order No. A/11324 / 2015 - Dated:- 15-9-2015 - Mr. P.K. Das, Member (Judicial) And Hon ble Mr. H.K. Thakur, Member (Technical), JJ. For the Appellant : Shri Hardik Modh, Advocate For the Respondent : Shri K. Sivakumar, Authorised Representative ORDER Per P. K. Das The Appellant filed this appeal against the OIO No.KDL/COMMR/ 40/2013-14, dt.09.12.2013, passed by Commissioner of Customs, Kandla. 2. The relevant facts of the case, in brief, are that the Appellant was awarded a contract for .....

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mported namely C.S. Seamless Line Pipes from M/s Missui Ltd Japan and filed Warehouse Bills of Entry. M/s Jindal carried out certain processes such as Coating etc on this imported pipes in the warehouse and thereafter, filed ex-bond Bills of Entry and Coastal shipping bills. The goods were removed from Mundra to Mumbai High and claimed exemption from payment of Customs duty under Sr.No.215 read with condition No.30 attached to the Table of Notification No.21/2002-Cus, dt.01.03.2002 for use at ON .....

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m Mumbai Port to the said place without permission from the Customs and the goods were seized under Panchnama dt.09.11.2011. The officers recorded various statements of the Appellant Company and others and after thorough investigation, a show cause notice dt.26.09.2013 was issued, proposing to deny the benefit of Notification No.21/2002-Cus, dt.01.03.2002 (Sr.No.215) in respect of the said 410 Coated Pipes, demand of duty alongwith interest and to impose penalty and confiscation of the seized go .....

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on No.21/2002-Cus, dt.01.03.2002 (Sr.No.215) in respect of surplus quantity of 410 Coated Pipes, seized by the Customs authorities. For the purpose of proper appreciation of the case, the relevant portion of the said notification is reproduced below:- S.No. Chapter or Heading No. or sub-heading No. Description of goods Standard rate Additional duty rate Condition No. (1) (2) (3) (4) (5) (6) (The exemption notification Sr.No. and conditions in the present SCN) 215 84 or any other Chapter Parts an .....

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torate General of Hydro Carbons in the Ministry of Petroleum and Natural Gas, Government of India, to the effect that the goods are required for the purposes of off-shore oil exploration or exploitation. 4. On plain reading of the above exemption notification, it is clear that in order to avail the benefit of exemption notification, a certificate is required from authorised officer of Directorate General of Hydro Carbon (DGHC) in the Ministry of Petroleum & Natural Gas, Government of India, .....

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visions of Section 65 of Customs Act, 1962 (i.e. manufactured under warehousing procedure) and (iii) a certificate is to be produced from a duly authorised officer of Directorate General of Hydro Carbon that the goods are required for the purpose of off-shore exploration/exploitation. In the present case, the Adjudicating authority observed that the surplus quantity of 410 imported pipes had not been used at ONGC MANHARD-II Project and the Appellant had attempted to divert the said imported good .....

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ration/exploitation activity of ONGC Project. The disputed 410 coated pipes were taken for use in off-shore oil exploration. It is further submitted that the exemption notification does not provide actual use/end use condition. The present case is covered by the decision of the Tribunal in the case of Clough Engineering Ltd Vs Commissioner of Customs 2006 (198) ETL 457 (Tri.), which is upheld by the Hon ble Supreme Court as reported in 2006 (202) ELT a 59 (SC). The learned Advocate also relied u .....

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ent cannot add a new condition to the notification either restricting the scope of exemption notification or whittling it down. 7. The learned Authorised Representative on behalf of the Revenue reiterates the findings of the Adjudicating authority. He submits that the benefit of exemption notification was extended for use of imported goods in ONGC Project. Admittedly, the Appellant has not used 410 Pipes in ONGC Project, and therefore, they are liable to pay duty for home consumption. The Appell .....

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xploitation activity of M/s ONGC Project. It is certified that the certificate was issued with reference to the Notification No.21/2002-Cus, as amended (Sr.No.215) of the Table. It is also certified that the said certificate was issued subject to fulfillment of Condition No.30 of the notification. The expressions goods are required for the purpose of off-shore oil exploration/exploitation in Clause (b) in Condition No.30 of the said notification, make it clear that at the time of clearance of th .....

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re, in our considered view, the Appellant fulfilled the condition 30 as stipulated in the notification. 9. The Adjudicating authority, observed that the Appellant diverted the goods unathorisedly. We find that the 410 Coated Carbon Steel Pipes were covered under Warehouse Bills of Entry, ex-Bond Bills of Entry as referred in Para 5.2 of the show cause notice. Admittedly, these coated pipes were removed from the bonded warehouse for use in the off-shore under the Bills of Coastal goods. The impor .....

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sector showing condition to be fulfilled in respect of Notification No.12/2012-Cus, dt.17.03.2012. It has been directed in the case of un-authorised diversion that the action could be initiated in terms of condition of exemption notification. In the present case, it is evident from the records that the imported goods were undertaken the process of coating etc at the Customs Warehouse and thereafter, it was cleared to ONGC Project at Mumbai Port. Hence, there is no material available of unauthor .....

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, the Appellant imported Seamless C.S. Pipes for execution of the project of petroleum/gas exploration. The Appellant sold excess imported seamless pipes after the project was over. The Customs authorities confiscated the said pipes on the ground that the Appellant violated the Condition No.31 of Serial No.216 of Notification No.21/2002 (supra) which is in question. The Tribunal interpreted the expression required for petroleum operation and held that there is no end use condition in the notific .....

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and thereafter, surplus pipes which were originally intended for use in the project found to be excess and therefore, the Appellant rightly claimed the benefit of notification. The Adjudicating authority observed that the said decision is not applicable as the serial number and the conditions mentioned in the above decision are different from serial number and conditions mentioned, under which the Appellant claimed the benefit of the notification. We find that the conditions mentioned in both s .....

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Chennai v. Q Max Test Equipment Pvt. Ltd. [2003 (159) E.L.T. 665 (Tri. Chennai)] the Tribunal has held in the context of Notification No. 56/88 granting exemption to goods required for use of testing of LSI/VLSI etc. that- On my careful consideration of the submissions, as well as the findings recorded by learned Commissioner, I am of the considered opinion that the finding recorded by the Commissioner (Appeals) is just, proper and legal and does not require any interference at our hands. There .....

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In this regard, the assessee s contention is that the item being LSI/VLSI tester, it is eligible for the benefit of the concession as the said item is required for the manufacture of goods falling under chapter heading 85.42. The term used in the notification is required for manufacture . The simple interpretation that has to be imported to these words are as to whether they are necessary for the purpose of manufacture of goods falling under chapter heading 85.42. It is not for us to include oth .....

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d circuit board, the benefit has to be extended. In the present case, M/s. Electronic Corporation of India Ltd., a Govt. of India Enterprise has certified that the item is for testing of the said LSI/VLSI etc. In view of absence of any end-use condition in the notification, the benefit cannot be denied. It cannot also be included that the goods are required and sold for the manufacture of items falling under chapter heading 85.42 and it is not necessarily required to go into the final product. A .....

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) Pvt. Ltd. v. GOI & Ors., reported in 1986 (23) E.L.T. 411 (Del.) will also apply to the facts and circumstances of the case. It was also brought to our notice that in the present case, the Revenue did not obtain any end-use certificate. Neither there is any condition for production of end-use certificate in the notification. Therefore the key for understanding of this notification is to read the notification in simple terms and not to import any other meaning which is not intended in the n .....

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85.42. In that view of the matter, the Commissioner s order granting benefit on the simple reading of the notification is justified and correct and there is no infirmity in the same. There is no merit in this appeal and it is rejected. 8.The above view recorded by ld. Member (Judicial), who disagreed with the order recorded by ld. Member (Technical) that the benefit of the notification was not available to the respondents, has been concurred with by third member, and by majority order, the appe .....

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