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Commissioner of Customs, Chennai Versus M/s. JSW Steel Ltd.

2015 (10) TMI 2392 - CESTAT 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 – Notification No.104/09-Cus. clearly allows exemption of capital goods imported in .....

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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 11.9.2009. The adjudicating authority denied the benefit of exemption notification .....

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ed 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 where the adjudicating authority described description of each items under 7 B .....

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der 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 1997 (90) ELT 428 (c) CC New Delhi Vs Sony India Ltd. 2008 (231) ELT 385 (SC) He a .....

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urther 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 consignment. As per the contract and purchase orders the whole plant and machinery w .....

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ts 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 to the logistics these goods have to be imported in a phased manner through vari .....

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al 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 further submits that they have complied and the Commissioner (Appeals) rightly all .....

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r 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 SHIS Scheme for clearance of goods covered under 7 Bills of Entry imported and .....

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apital 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 copy of the agreement dt. 23.2.2011, we find the respondents had entered into agr .....

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#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 above agreement, it is very clear that the contract is for the supply of CAL & .....

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d 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 definition of "capital goods" as provided in the Explanation under t .....

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ng 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 LAA has brought out a detailed findings on this issue and we find that equipme .....

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e 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'ble Supreme Court decision in the case of Sony India (supra) which relates to .....

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