TMI Blog2021 (7) TMI 1027X X X X Extracts X X X X X X X X Extracts X X X X ..... on as to why the goods were not declared to be for re-import purposes at the time of loading in Delhi; the appellants would have given proper intimation/declaration to the department so that the department could have carried out the necessary examination/investigation. The facts of the case do clearly indicate that the appellants have filed a shipping bill while loading the goods at Delhi; at the time of movement from Germany to Bangalore and have also filed a bill of entry at Bangalore without making any reference to the intent of re-import etc. - there are no hesitation whatsoever to hold that the impugned goods are not eligible for exemption contained in terms of notification 94/96. Whether the impugned goods be treated as 'parts of aircraft' and whether the appellants claim of benefit of exemption under notification no. 21/2002-Cus dated 01.03.2002(S1.No.346D) and notification No. 12/2012-cus dated 17.03. 2012 (SI. No. 354) is proper? - HELD THAT:- The learned commissioner has correctly held that the impugned goods i.e. 'aircraft engines' and 'engine stands' are not eligible for the benefit of Customs Notifications No.21/2002-Cus dated 01.03.2002 (S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1962, the demand issued is in order. Whether in the facts and circumstances of the case, invocation of extended period of limitation interest, and imposition of penalties under Sections 112, 114A and 114AA of the Customs Act, 1962, justified? - HELD THAT:- The bills of entry were self-assessed and were cleared under RMS. Under the circumstances, it cannot be alleged that the Department was in the knowledge of the various declarations made by the appellants and thus, charge of mis-declaration cannot be levelled. Looking into the facts and circumstances of the case, it is found that the appellants have mis-declared the impugned goods and have wrongly availed the benefit of exemption which is not due to them. Under the circumstances, it is found that extended period is correctly invoked - The present case does not relate to export at all and even for imports, all the documents presented for imports were genuine and not forged and thus penalty is not imposable under Section 114AA of the Customs Act, 1962, penalty under other sections upheld - demand of interest also upheld. Confiscation of goods - HELD THAT:- The Adjudicating Authority simply held that the goods are liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the legislature intends to exempt aircraft engines from payment of duty, the relevant notifications / entries specifically cover aircraft engines distinct from and in addition to the aircraft parts or parts of aircraft . Learned Commissioner also held that the appellants are not eligible to claim the alternate benefit of exemption under Notification No. 94/1996-Cus., dated 16.12.2006 it was not claimed at the time of import; and as the goods have not been examined by the department at the time of import to verify whether the imported goods were the same that were exported; the appellants had misdeclared that the goods are for repair in the shipping bills and have not indicated that the goods are re-imported in the BOEs at the time of import. 2.1. A show Cause Notice dated 24.01.2014, invoking extended period, was issued and was confirmed by impugned order No BLR-CUSTM-000-COM-008-14-15 dated 03.06.2014 demanding differential duty of ₹ 24,06,02,286/-under Section 28(4) of the Customs Act, 1962 along with interest; penalty of Rs ₹ 24,06,02,286/- under Section 114A of the Customs Act, 1962 and a penalty of ₹ 5,00,00,000/- under Section 114AA of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to India. 4. Learned Counsel submits that the aircraft engine and the engine stand are parts of aircraft of heading 8802 ; they have satisfied all the conditions for availing the benefit of the exemption notification; it is not disputed that the aircrafts of the Appellants fall under the CTH 8802 and that the aircraft engine and the engine stand have been imported into India for service/repair/maintenance of the unserviceable aircrafts of the Appellant grounded at Bengaluru airport. He submits that the aircraft engines imported by the Appellants are undoubtedly parts of aircraft of heading 8802 and are exempt under the above exemption notifications. He submits that the expression parts of aircraft shall be given its plain and clear meaning and shall be construed to include aircraft engine also; the above clarification issued in the context of Sl. No. 454 of Notification No.12/2012-Cus., dated 17.03.2012, is equally applicable to identically worded exemptions under Sl. No. 346D of Notification No.21/2002-Cus dated 01.03.2002, Sl. No. 303 of Notification No. 12/2012-CX dated 17.03.2012 and Sl. No. 54B of Notification No. 21/2002-Cus dated 01.03.2002; the scope of the express ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ines or motors, articles of heading 8483.' 4.4. He submits that Section Note provides that if any article is specifically covered under the CTH 8401 to 8479 and simultaneously is also covered under any of the CTH of Section XVII as parts/accessories of any of the goods of that Section, then for the purposes of classification it will be classified under the CTH 8401 to 8479 and not under Section XVII of the Customs Tariff. HSN Explanatory Note to CTH 8803 reads as under: This note excludes the following parts and accessories, whether or not they are identifiable as articles of this section: ... (5) Machines and mechanical appliances, and parts thereof, of heading 8401 to 8479, for example: ... (d) Engines of all kinds including engines fitted with gear boxes and parts thereof, falling in headings 8407 to 84.12. 4.5. He submits that the above HSN Explanatory Note also makes it clear that machines/appliances of CTH 8401 to 8479 will not be classified under CTH 8803, even if otherwise they are in the nature of parts of aircrafts ; it is important to note that the phrase used in the above HSN Explanatory Note is 'following parts and accessorie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er , reliance on the exclusion in the notes to the Section, which is intended for the sole purpose of classification, to interpret an exemption notification is not legal and proper; the description in the exemption notification must be read in its entirety and harmoniously in accordance with which, all parts of dredgers, including engines, must be accorded the benefit of exemption. 5. Learned Counsel submits that effect must be given to the plain and clear meaning of the language used in an exemption notification; when the language used in an exemption notification is unambiguous, full effect must be given to it and the benefit of exemption cannot be denied by placing reliance on classification; appellants rely on CC (Import), Mumbai Vs Dilip Kumar Company, 2018 (361) ELT 577 (SC) Hemraj Gordhandas v. H.H. Dave, ACCE C, Surat, 1978 (2) ELT J 350 (SC) 6. Learned Counsel submits that without prejudice to the above, the Appellants are eligible for exemption under Notification No. 94/1994-Cus dated 16.12.1996, as amended, in terms of Sl. No. 3 thereof which grants full exemption from levy of BCD and CVD to goods re-imported into India after being exported, subj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f filing an appeal against such self-assessment under Section 128 of the Customs Act, 1962. 9. Learned Counsel submits that the Appellant has not suppressed or mis represented facts to the Customs authorities with a view to evade payment of duty; the Appellant had correctly described the imported goods as aircraft engine and engine stand along with the details of the Engine No. in the bills of entry filed for the imported goods; the mere fact that the Appellants claimed exemption available to parts of aircraft cannot amount to misstatement or misdeclaration with an intent to evade duty as the imported goods are in fact parts of aircrafts, irrespective of their classification under the Customs Tariff does not show intent to evade duty. He relies on Northern Plastic Ltd Vs CCE 1998 (101) ELT 549 (SC) and Densons Pultretaknik Vs CCE2003 (155) ELT 211 (SC) and submits that even if the engine and the engine stand imported by the Appellants are held to be wrongly classified under CTH 8803, it cannot amount to mis-declaration under the Customs Act; it is settled that law in a dispute prevailing around classification, the assessee cannot be charged with any suppression of facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b). Whether the impugned goods be treated as 'parts of aircraft' and whether the appellants claim of benefit of exemption under notification no. 21/2002-Cus dated 01.03.2002(S1.No.346D) and notification No. 12/2012-cus dated 17.03. 2012 (SI. No. 354) is proper? (c).Whether the demand can be sustained without reviewing/challenging the. assessment in the Bills of Entry? (d). Whether in the facts and circumstances of the case, invocation of extended period of limitation and imposition of penalties under Sections 112, 114A and 114AA of the Customs Act, 1962, justified? 15. Coming to the first issue of whether or not there is a reimport of the impugned goods, it is the submission of the appellants that the documents filed at New Delhi clearly indicated that the goods are being shipped to Bangalore; as there was no direct cargo flight from Delhi to Bangalore, the goods were loaded on aircraft which touched Germany in between; no import documents were filed at Germany and the goods did not enter the German Customs Area; the identity of the goods can be established by the engine on the chassis numbers. On the other hand, the ld. Adjudicating authority takes recourse to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02 and notification no. 12/2012-Cus dated 17.03.2012, we find that the case of the department is that the impugned goods are not classifiable as parts of aircraft by virtue of exclusion under Section note 2(e) to Section XVII; the notifications exempt only parts of aircrafts and aircraft engines being distinct goods cannot be equated as parts of aircraft to be eligible for the benefit of the notification. On the contrary, the argument on the part of the appellant is that the relevant notifications do not restrict the exemption depending on the classification; whatever be the classification, the exemption notification is applicable. They also contend that CBEC vide circular DOF 334/15/2014-TRU dated 10.07.2014 clarified that aircraft engines and parts thereof are eligible for customs duty exemption when imported for servicing repair, or maintenance of aircraft used for scheduled operation subject to fulfillment of conditions specified therein. The appellants further relied on the cases cited above and submit that the scope of the expression parts of aircraft/ aircraft parts and their entitlement to exemption for parts is settled in their favour. 16.1.The appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apply. He finds that in the instant case, the goods imported are neither classifiable as parts (by virtue of exclusion under Section Note 2(e)) nor are 'specifically exempt by the said notification; thus, there is no conflict between the stand taken by the department and the law laid down by the Hon'ble Supreme Court. He further finds that there is a legislative history of treating 'aircraft engines' as distinct from 'parts of aircraft' for the purpose of exemption unlike in the case of aero plane Tyres; in the notifications, either the 'aircraft engines' are specifically included (as in the case of Entry 10(i) of the Notification No. 39/1996 Cus dated 23.7.1996 and entry 1 of Notification No. 206/1976-Cus) or by way of an Explanation (as in the case of the Notification No.12/2012 dated 17.3.2012) and the same is absent in subsequent Notifications; the legislative intent is clear as the Notifications in question, continue to distinguish 'aircraft engines' from the 'parts of aircraft'. 17.1. Learned Commissioner further finds that the appellants rely upon the explanation provided under Condition No.71 relevant for Sl. No. No. 446 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of IC Engines used within the factory of production for manufacture of tractors and as such not applicable for the facts of impugned case. We also find that the adjudicating authority has analyzed and correctly examined the case laws submitted by the appellants and rightly held them to be inapplicable to the facts of the case. We find that as per the discussion above, the learned commissioner has correctly held that the impugned goods i.e. 'aircraft engines' and 'engine stands' are not eligible for the benefit of Customs Notifications No.21/2002-Cus dated 01.03.2002 (Sl. No.346D) and No.12/2012 dated 17.3.2012 (Sl.No.454) and Central Excise Notifications No.6/2006-CE dated 01.03.2006 (Sl. No.545) and Notification No.12/2012-CE dated 17.3.2012 (Sl.No.303) and Notifications No. 20/2006-Cus dated 1.3.2006 (Sl. No.1) and 21/2012-Cus dated 17.3.2012 (Sl. No.1) for the purposes of SAD. 17.4. We also find that the appellants have relied upon Circular bearing D.O.F. No. 334/15/2014-TRU dated 10.07.2014 which clarified that aircraft engines and parts thereof are eligible for customs duty exemption under Sl. No. 454 of Notification No.12/2012-Cus, dated 17.03.2012 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis. We find that the appellants have relied upon the recent decision of Hon ble Supreme Court in the case of ITC Ltd. Vs CCE, Kolkata-IV, 2019 (368) ELT 216(SC). We find that the issue for consideration before Apex Court was about refund and in this context, Hon ble Apex Court has observed that in terms of the provisions of Section 27 read with Section 17 of the Customs Act, 1962, no refund claim is maintainable unless the order of assessment is challenged. The Hon ble Supreme Court observes that: 47. When we consider the overall effect of the provisions prior to amendment and post-amendment under Finance Act, 2011, we are of the opinion that the claim for refund cannot be entertained unless the order of assessment or self-assessment is modified in accordance with law by taking recourse to the appropriate proceedings and it would not be within the ken of Section 27 to set aside the order of self assessment and reassess the duty for making refund; and in case any person is aggrieved by any order which would include self-assessment, he has to get the order modified under Section 128 or under other relevant provisions of the Act. 18.2. On going through the above cited case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RMS is pegged in the concept of trust in the importer; the appellants, on the one hand, claimed that the shipping bills declared that aircraft engines were being re-exported for repair and also the claim that the said goods never crossed customs boundaries in Germany. 19.2. Learned Commissioner observes that the scheme of self- assessment places greater responsibility on the importer in as much as departmental intervention being minimal, the importer is required to make declarations and claim benefits with extra caution; it is also not open to the importer to subsequently shirk the responsibility for their declarations and claims. Were it not to be so, the departmental officers would still be responsible for assessment when they had factually no role to play in it a position which would be completely unfair and unjust and as such cannot be contemplated in law; in the above factual matrix and background, it is apparent that the importer noticee has made mis-declaration at various stages, claimed incorrect exemption and cleared the goods without payment of duty; the documentation prepared in dubious and doubtful. Therefore, this is a fit case for invocation of extended period ..... X X X X Extracts X X X X X X X X Extracts X X X X
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