TMI Blog2007 (1) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... tly, Revenue proceeded against the appellants that those machineries would not be entitled for the benefit of the Notifications, because they had not been actually used in the textile industry. In the impugned order, the Commissioner demanded differential duty of Rs. 15,57,235/- under Section 28 of the Customs Act, 1962. Further, he has imposed a penalty of Rs. 1,00,000/- on the appellant company under Section 112(a) the Customs Act, 1962. The appellants strongly challenge the impugned order. 3.Shri B. V. Kumar, learned Advocate appeared for the appellants and Shri K. Sambi Reddy, learned JDR appeared for the Revenue. 4.The learned Advocate urged the following points : (i) The Show Cause Notice is barred by limitation, as the demand for duty has been made in April, 2004 in respect of the imports made during the period from April, 1999 to February, 2003. There is no evidence for suppression of facts or any mis-declarations. The description of the impugned goods and their classifications has been correctly mentioned in the relevant bills of entry and other documents. There is no allegation that the impugned machines do not figure in List 10, List 17, List 18 and List 30 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be imported into it. (v) The word "textile industry" is of wide import and its meaning cannot be restricted only for the manufacture of yarn or fabrics. The Chapter Headings under Chapter 84 cover a wide range of machinery, right from the stage of extruding, drawing, texturing or cutting man-made fabrics, till they are finished and are stitched into ready-made garments. The ready-made garments are ready to be exported are sold in the domestic market only after washing, dry cleaning and pressing. For administrative convenience, many large textiles units often engage the service of job workers to undertake some incidental work like stain removing, dry cleaning, washing, calendaring, and pressing. Hence, it is not correct to observe that only large textile units are eligible for the benefit of the said Notifications, when the activities of such job workers, using the impugned machines also relate to activities of textiles units. (vi) A perusal of letters/delivery challans/bills collected from various customers reveals that the impugned goods are being used for doing job work for garment manufacturers-Exporters. In such cases, it cannot be said that the said goods are not bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication No. 21/2002-Cus., dated 1-3-2002 for use in "Textile Industry" . The Tariff conference of Chief Commissioner of Customs held at Calcutta on 22-1-04/23-1-04 decided that the Notification allows the import of general purpose machinery also as listed in List 30 so long as they are capable of use in Textile industry and eligible for exemption under Sl. No. 250 of Notification No. 21/2002-Cus. (viii) In view of the above submissions, the Tribunal may allow the appeal. 5.While reiterating the impugned order, the learned JDR relied on the Apex Court decision in the case of Collector of Customs, Bombay v. Handicraft Exports - 1997 (93) E.L.T. 6 (SC), wherein the court while interpreting the words "used in leather industry", in the context of Notification No. 29/79-Cus., dated 10-2-1979 held that the importer will have to prove that the goods were not only capable of being utilised as embellishment for shoes but also that they were imported for that purpose. 6.We have gone through the records of the case carefully. The relevant Notifications contain a table appended to them covering the description of the goods, which are exempted along with Chapter or Heading or Sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Where any condition is to be fulfilled, the Sl. No. of the condition is invariably mentioned in Column 6. With regard to parts for manufacture of the goods at 1 above, it is seen that in Column No. 6, there is a mention of 5. That means if the parts are imported, a condition has to be fulfilled. In the Annexure, which lists the condition, we find that Condition 5 reads as follows: "If the importer follows the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996." Hence, if the parts are imported, the specified condition has to be fulfilled. As regards machinery or equipment, it is sufficient if they are listed in List 30. There is no need to prove that such machineries have actually been used in the textile industry. In the present case, according to the records, some dry cleaning machineries have been sold to buyers who are dry cleaners, agro processors. The garment calendaring machine has been supplied to laundry and dry cleaners. The appellants have contended that a narrow interpretation should not be given to the words "for use in textile industry", as sometimes they have to give the goods to job wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of opinion, the Technical Member held that "required for manufacture" should be interpreted to mean that they should be actually used in the manufacture but the Judicial Member held the view that there is no need for the impugned goods to be actually used so long as it is shown by the expert opinion that it is required for use for testing of LSIV/LSI Circuit Micro Assembly …. and the benefit has to be extended. In view of difference of opinion, the case was referred to the third Member who agreed with the view of the Member Judicial and held that the Notification benefit is available if it is required for the manufacture and there is no need that it should be actually used in view of absence of any end-use condition in the Notification. The ratio of the above case is squarely applicable to the present case. In the above mentioned case, the Tribunal relied on the Apex Court decision in the case of State of Haryana v. Dalmia Dadri Cement Ltd. (supra). 6.3In the case of Asean Trading Agency v. CC (supra), the benefit of exemption under Notification 224/85-Cus., dated 9-7-1985 was the main issue. When the departmental representative contended quoting Addl. Collector' s decision tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution of such energy (emphasis supplied by us). On a plain reading of the relevant clause it is clear that the expression "for use" must mean "intended for use". If the intention of the legislature was to limit the exemption only to such goods sold as were actually used by the undertaking in the generation and distribution of electrical energy, the phraseology used in the exemption clause would have been different as, for example, "goods actually used" or "goods used". 16.In the present instance, the notification permits exemption to penetrators imported for use in leather industry. It has been shown that the substance imported has use in leather industry as a penetrator. Proof of actual use is not a condition attached to the exemption. If it were so, the notification would have provided for execution of a bond obliging the importer to produce proof of actual use as is the case in many other notifications. We therefore do not agree with the Revenue's contention that the benefit of exemption would not be available to the appellants since they are not engaged in leather industry but are only stockists for sale. 6.4From the records, we find that even on 15-3-2003 and 20-6-2003 the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
