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2015 (10) TMI 2392 - CESTAT CHENNAI

2015 (10) TMI 2392 - CESTAT CHENNAI - 2016 (340) E.L.T. 262 (Tri. - Chennai) - Import of capital goods under SHIS scheme - Supply of equipment for continuous annealing line for cold rolling mill Claimed clearance under Status Holder Incentive Scheme (SHIS) scheme vide Customs Notification No. 104/2009 Revenue contended that goods are not capital goods thus not liable for exemption. - Held That:- Definition of "capital goods" given in FTP are same for EPCG licence or for SHIS Licence No .....

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ultant ORDER Per R. Periasami Revenue filed this appeal against Order-in-Appeal dated passed by the learned Commissioner (Appeals). 2. The brief facts of the case are that the respondents filed 7 Bills of Entry for clearance of goods declared as supply of equipment for continuous annealing line / galvanizing line for cold rolling mill classifying the goods under CTH 84559000 and claimed clearance under Status Holder Incentive Scheme (SHIS) scheme vide Customs Notification No. 104/2009 dated 11.9 .....

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is appeal against the order of the learned Commissioner (Appeals). 3. The learned AR reiterated the grounds of appeal and submits that the SHIS exempts the capital goods imported into India against duty scrip issued under SHIS scheme. As per clause b(4) of the notification, iron and steel are excluded as per clause 3 which is non-transferable and shall be used for import of capital goods relating to the sectors mentioned in condition (i). He reiterates the findings contained in Order-in-Original .....

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f the FTP is only for import under EPCG scheme and not related to clearances under SHIS scheme. Customs has to classify the goods as per the description presented at the time of clearance of the goods and they are rightly classified under the respective chapters. Once the goods are not capital goods, SHIS scheme is not applicable. She relied on the following decisions:- (a) IVRCL Infrastructure and Projects Ltd. Vs CC Chennai 2015-TIOL-73-SC-CUS. (b) Kirloskar Pneumatic Co. Ltd. Vs CC Bombay 199 .....

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ole plant and machinery and not confined to single capital goods or parts. He further submits that the respondents have entered into a contract with foreign supplier for setting up of a new plant at their Hospet unit. He submitted a copy of agreement dated 23.2.2011. The agreement is meant for supply of equipment for continuous annealing line / galvanizing line for cold rolling mill. Therefore, they have entered into a contract with the supply and those goods cannot be imported in a single consi .....

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ual user condition and transferability of the scrip have been relaxed. He submits that no doubt the goods imported under 7 bills of entry are parts but they are parts of capital goods covered under the purchase order. Each invoice refers to the contract and purchase order. He also submits that these goods are specific tailor made for only this plant. These are not parts of general uses and essential and integral part of capital goods which they have posed to set up. He further submits that due t .....

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and when the Department has accepted the same consignment and accepted as capital goods and allowed clearance of same goods when imported and filed SHIS scrip the department cannot deny. He also submits a worksheet submitted before jurisdictional authorities for fulfillment of SHIS scheme showing the list of Bills of Entry and the items imported and the uses, and the installation certificate. As per Sl. No. 3, 5, 7, 8 to the Annexure to Bill of Entry are covered under the present dispute. He fur .....

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grading the existing technology and not for new plant and machinery. EPCG is for importing capital goods under the scheme whereas SHIS scheme is sector specific. 6. We have carefully considered the submissions of both sides. The short issue in this Revenue appeal is whether the respondents are eligible for clearance of the imported goods under SHIS Scheme as per Customs Notification No.104/2009 dt. 11.9.2009. The adjudicating authority has denied the benefit of Customs Notification pertaining to .....

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e the OIO contending that the goods imported by the respondents are not "capital goods" and not covered under SHIS Scheme. On a perusal of the OIA of the LAA, we find that he has discussed and recorded a detailed findings and also discussed the definition of "capital goods" provided under the policy governing SHIS Scheme at paras 7 to 11 and examined the contract agreements with the foreign supplier for arriving at his conclusion as 'capital goods'. On a perusal of co .....

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e Purchaser has decided to purchase the Equipment for Continuous Annealing Line #1, (CAL#1) and Continuous Galvanizing Line (CGL) for Cold Rolling Mill Complex # 2 Project which will be located at Vijayanagar, Toranagallu, District Bellary, Karnataka, India; and B. The Seller has agreed to sell the Equipment for Continuous Annealing Line #1 (CAL #1) and Continuous Galvanizing Line (CGL) for Cold Rolling Mill Complex #2 Project in accordance with the terms and conditions of the contract. From the .....

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r EPCG. The Revenue's contention is that these are only individual parts and articles consisting of bolts, nuts etc. and they cannot be considered as 'capital goods' and same is not covered under SHIS Scheme. 8. In this regard, we find the Notification No.104/09-Cus. dt. 14.9.2009 clearly allows exemption of capital goods imported into India against Duty Credit Scrip issued under SHIS Scheme. As per para 3.16 of Foreign Trade Policy the definition of "capital goods" and the .....

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plant and machinery of the Expansion Project for CAL& CGL in the Cold Rolling Mill Complex. It is pertinent to state that respondent has set up integrated steel plant at Vijayanagar, Karnataka. The contract clearly shows the import of entire supply of equipments of plant and machinery of CAL & CGL. Obviously when the respondents are to import as per the contract the whole plant and machinery for CAL & CGL, the entire goods cannot be imported in one lot under single Bill of Entry. The .....

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me and not capital goods under SHIS Scheme. Revenue's contention is that the goods imported are general purpose items i.e. Bolts & Nuts is not justified. Obviously, continuous annealing line has various sections as detailed in the impugned order. After assembly, it becomes a single Annealing Line. It is not the case of the department that respondent has placed orders for only spares or bolt and nuts and claimed as 'capital goods' under SHIS Scheme. 9. Revenue's relying Hon .....

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