case law.docx

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2014 (300) E.L.T. 309 (Tri. - Mumbai)

IN THE CESTAT, WEST ZONAL BENCH, MUMBAI

[COURT NO. I]S/Shri P.R. Chandraseharan! Member (T) and "ni# Ch$udhar%! Member (&)

'RESE*S +", " P. LT.Versus

CMMR. ' C*S. (MPRTS)! "" SE"

Final Order Nos. A/262-297/2013-WZB/C-IC!"B#$ da%ed &-2-2013 in A''eal Nos. C/333-36&/2012

Duty liability - Rate of CVD leviable on import of intravenous fluid - Benefit of

Notification No. 1/2011-C.. - Denial of - Non-compliance of condition of Notification No. 1/2011-C.. - !mporter optin" for more beneficial concessional

rate of CVD of 1# ad valorem$ prescribed under Notification No. 1/2011-C..sub%ect to condition t&at no Cenvat credit ta'en on duty paid$ (&ereas Department

claimin" imports c&ar"eable to CVD ) *# ad valorem prescribed unconditionallyunder Notification No. 2/2011-C.. - HELD : !mported "oods not eli"ible for benefit

of Notification No. 1/2011-C.. as +uestion of ta'in" Cenvat credit under CenvatCredit Rules$ 200, does not arise in case of "oods imported from abroad (&ere

suc& Rules not applicable and as suc&$ condition of availin" benefit of NotificationNo. 1/2011-C.. cannot be satisfied - ettled principles of statutory interpretation

do not permit disre"ard of said condition - Clarification "iven in planation toection 1 of Customs ariff 3ct$ 145* to be strictly follo(ed stipulatin" t&at

(&en "oods manufactured in !ndia leviable to different rates of cise duty$ CVDon li'e "oods imported to be at &i"&est rate of duty - C.B.. 6 C. !nstruction No. B-

1//2011-R7$ dated 2*--2011 also clarifyin" CVD of *# applicable to imported"oods - &us applyin" contemporaneous eposition and administrative

construction$ benefit of Notification No. 1/2011-C.. not admissible and impu"ned

"oods attract CVD ) *# under Notification No. 2/2011-C.. [paras 6.1, 6.2, 6.3,

6.4, 6.5, 6.6, 6.7, 6.8, 6.9]

Appeals dismissed

C"SES CTE

Baleshwar Bagarti . Bhagirathi !ass " #$%&'( ILR )* Cal +&$+&) " (elied on....................................................................................................

Balwa-t Si-gh . ag/ish Si-gh " 0&$& #010( E.L.T. *& #S.C.( " (elied on............................................................................................................

C2lle3t2r . A-/hra S4gar Lt/. " $%'' #)'( E.L.T. *15 #S.C.( " (elied on...............................................................................................................

C266issi2-er . Ashi6a !7e32t Lt/. " 0&$$ #01+( E.L.T. $00 #Tri84-al( " (e)erred .............................................................................................

C266issi2-er . Malwa I-/4stries Lt/. " 0&&% #0)*( E.L.T. 0$5 #S.C.( " $ "#iab#e.....................................................................................

H7/era8a/ I-/4stries Lt/. . U-i2- 29 I-/ia " $%%% #$&'( E.L.T. )0$ #S.C.( " (e)erred .........................................................................................

:.;. O99i3er " #$%'$( $)$ ITR *%+ #SC( " (elied on.........................................................................................................

Ma?sa Ta?es ;t. Lt/. . C266issi2-er " 0&&% #05+( E.L.T. $'' #Tri84-al( " (e)erred ........................................................................................

;ri7esh Che6i3als a-/ Metals . C2lle3t2r " 0&&& #$0&( E.L.T. 0*% #Tri84-al=LB( " (elied on............................................................................

Ther6a> ;riate Lt/. . C2lle3t2r " $%%0 #1$( E.L.T. )*0 #S.C.( " $ "#iab#e................................................................................................

EP"RTMET"L CL"R'C"T CTEC.B.E. @ C. I-str43ti2- N2. B=$)0&$$=TRU, /ate/ 0*=)=0&$$.................................................................................................................................

RE;RESENTE! B SShri ;raash Shah a-/


2/21

/is?2sal.

3.The a??ella-t, Ms. rese-i4s :a8i I-/ia ;t. Lt/., ;4-e, i6?2rte/

I-trae-24s 9l4i/ 9alli-g 4-/er Cha?ter )& 29 the C4st26s Tari99. The73lai6e/ 32-3essi2-al rate 29 C

4.The lear-e/

C24-sel 92r the a??ella-ts s486its that there are tw2

rates ?res3ri8e/ 92r the i6?4g-e/ g22/s, -a6el7, i-trae-24s 9l4i/ = 2-e $F ad *alore+ i- ter6s 29 N2ti9i3ati2- N2. $$$ a-/, the 2ther *F ad *alore+ i- ter6s 29 N2ti9i3ati2- N2. 0$$. The7 hae 3h2se- the $F ad *alore+ rate whi3h is +ore 8e-e9i3ial t2 the6. The arg46e-t 29 the/e?art6e-t that the rate 29 $F ad *alore+ w24l/ -2t a??l7 t2 the6 isi-32rre3t 92r the reas2- that the 32-/iti2- ?res3ri8e/ 92r aaili-g the sai/rate is that the 6a-49a3t4rer sh24l/ -2t hae aaile/ CEN ?ai/ 2- the i-?4t seri3es 4-/er the?r2isi2-s 29 Ce-at Cre/it R4les, 0&&5. The a??ella-t herei- is -2t

aaili-g a-7 CEN


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8e-e9it 4-/er Sr. N2. 5. It was 32-teste/ 87 the ree-4e 8e92re the H2-8le A?e> C24rt that whe- tw2 rates 29 /4t7 are s?e3i9ie/ 92r the ?4r?2se 29 le729 C?la-ati2- t2 Se3ti2- )#$( 29 the C4st26s Tari99 A3t,the highest rate sh24l/ 8e tae-. This 32-te-ti2- was -egatie/ 87 theH2-8le S4?re6e C24rt h2l/i-g that 2-3e the g22/s satis9ie/ the/es3ri?ti2- gie- i- res?e3t 29 a ?arti34lar ?r2/43t, the sai/ rate sh24l/ 8ea??lie/ 92r the ?4r?2ses 29 le7 29 C

4.1The l/.

C24-sel als2 relies 2- the /e3isi2- 29 the H2-8le A?e>C24rt i- the 3ase 29 ala Indus%ries %d. re?2rte/ i- 0&&% #0)*( E.L.T. 0$5#S.C.( wherei- a J4esti2- ar2se as t2 whether the KNil rate 29 /4t7 i-res?e3t 29 3ertai- g22/s 9alli-g 4-/er Tari99 Hea/i-gs )0&5 2r )'&% w24l/a??l7 t2 i6?2rte/ g22/s whe- the E>3ise N2ti9i3ati2- ?res3ri8e/ the sai/rate s48Ge3t t2 the 32-/iti2- that the ?r2/43t sh24l/ 8e 4se/ withi- the9a3t2r7 92r 6a-49a3t4re 29 te>tile a-/ te>tile arti3les. The C

a??ella-t was reGe3te/ 2- the gr24-/ that i- res?e3t 29 i6?2rte/ g22/s, theJ4esti2- 29 4si-g the ?r2/43ts i- the sa6e 9a3t2r7 w24l/ -2t arise a-/,there92re, the N2ti9i3ati2- sh24l/ 8e i-ter?rete/ i- a har62-i24s wa7, s2 ast2 32-str4e that the i6?2rte/ g22/s sh24l/ 8e 4se/ i- the sa6e 9a3t2r7 92r 6a-49a3t4re 29 te>tile a-/ te>tile arti3les.

4.2The l/.

A/23ate als2 relies 2- the /e3isi2- 29 this Tri84-al i- the3ase 29 a'sa "a'es *%. %d . re?2rte/ i- 0&&% #05+( E.L.T. $'' #Tri.=!el.(wherei- a /is?4te ar2se as t2 whether the E>3ise /4t7 rate ?res3ri8e/ 92r g22/s 9alli-g 4-/er Cha?ter Hea/i-g N2s. *&&5 a-/ *&&* s48Ge3t t2 the

32-/iti2- that -2 3re/it 29 /4t7 2- i-?4ts a-/ 3a?ital g22/s hae 8ee-tae- 4-/er the ?r2isi2-s 29 Ce-at Cre/it R4les, 0&&0, 324l/ 8e a??lie/92r the le7 29 C


4/21

E>e6?ti2- N2ti9i3ati2-, the 8e-e9it 29 Ce6?ti2- 3a--2t 8e /e-ie/a-/ a332r/i-gl7, he ?lea/s 92r setti-g asi/e the i6?4g-e/ 2r/er a-/all2wi-g the a??eals.

7.The lear-e/ A//l. C266issi2-er #AR( a??eari-g 92r the Ree-4e,

2- the 2ther ha-/, str2-gl7 re94tes the arg46e-ts 29 the lear-e/ C24-sel92r the a??ella-t. He s486its that the ?4r?2se a-/ 28Ge3t 29 le7 29 a//iti2-al /4t7 #C3ise/4t7 leia8le 2- the lie arti3les 6a/e i-/ige-24sl7 2r the i-/ige-24s raw6aterial 4se/ i- the 6a-49a3t4re 29 lie i-/ige-24s arti3les. I- 2ther w2r/s,Se3ti2- ) 29 the C4st26s Tari99 A3t has 8ee- e-a3te/ t2 ?r2i/e the le7 29 C3ise /4t7 leia8le 2- lie g22/s6a-49a3t4re/ i- I-/ia, as has 8ee- hel/ 87 the C2-stit4ti2- Be-3h 29 theH2-8le A?e> C24rt i- the 3ase 29 84dera5ad Indus%ries %d . . OI [$%%%#$&'( E.L.T. )0$ #S.C.(].

7.1I- the ?rese-t

3ase, there are tw2 rates ?res3ri8e/ 92r the?4r?2se 29 le7 29 e>3ise /4t7. O-e rate is $F ad *alore+ whi3h is s48Ge3tt2 the 32-/iti2- that -2 CENes ?ai/ 2- i-?4t seri3es i/e N2ti9i3ati2- N2. $0&$$=C.E. A-2ther rate is *F ad *alore+ ?res3ri8e/ 4-/er N2ti9i3ati2- N2. 00&$$=C.E.with24t a-7 32-/iti2-. I- 2ther w2r/s, the 6a-49a3t4rer wh2 aailsCEN *F ad* . As ?er E>?la-ati2- t2 Se3ti2-1#$( 29 the C4st26s Tari99 A3t, whe- the lie g22/s ?r2/43e/ i- I-/ia ares48Ge3te/ t2 /i99ere-t rate 29 /4t7. 2r the ?4r?2ses 29 le7 29 C

highest rate sh24l/ 8e tae-.

7.2The lear-e/ AR 94rther relies 2- the /e3isi2- 29 the Larger Be-3h29 this Tri84-al i- the 3ase 29 ri4es, C,e+ials : e%als . Co++issioner o) Cen%ral ;ise$ Banalore = 0&&& #$0&( E.L.T. 0*% #Tri.=LB(, where a-i/e-ti3al iss4e ar2se 92r 32-si/erati2-. I- the 9a3ts 29 that 3ase, *ideN2ti9i3ati2- N2. $%''=C.E. e>e6?ti2- was ?r2i/e/ 2- Zi-3 Ash s48Ge3t t2the 32-/iti2- that -2 3re/it 29 /4t7 ?ai/ 2- the i-?4ts 4se/ i- the6a-49a3t4re 29 g22/s hae 8ee- tae- 4-/er R4le *1A 2r R4le *+A 29 theCe-tral E>3ise R4les, $%55. The i6?2rter a??ella-t, wh2 i6?2rte/ Zi-3 Ash

9r26 a8r2a/ 3lai6e/ the 8e-e9it 29 the sai/ -2ti9i3ati2- 92r the ?4r?2ses 29 le7 29 C3ise A3t a-/ the R4les/2 -2t a??l7 t2 6a-49a3t4rers sit4ate/ a8r2a/ a-/ there92re, thea??ella-ts 3lai6 that the i6?2rte/ g22/s 94l9ille/ the reJ4ire6e-t 29 the-2ti9i3ati2- has -2 s48sta-3e 2r 8asis a-/ a332r/i-gl7, 8e-e9it 29 N2ti9i3ati2- N2. $%''=C.E. was /e-ie/ i- res?e3t 29 i6?2rte/ Zi-3 Ash.

7.3The lear-e/ AR

als2 relies 2- the 3lari9i3ati2- iss4e/ 87 the


5/21

C.B.E. @ C. *ide I-str43ti2- N2. B=$)0&$$=TRU, /ate/ 0*=)=0&$$. I- thesai/ i-str43ti2-, the C.B.E. @ C. has 3lari9ie/ that the 8e-e9it 29 $F ad *alore+ w24l/ -2t 8e aaila8le 92r the ?4r?2se 29 le7 29 C

8.We hae 3are94ll7 32-si/ere/ the

rial s486issi2-s.

8.1It will 8e 4se94l at this G4-3t4re

t2 l22 at the w2r/i-gs 29 N2ti9i3ati2- N2s. $0&$$=C.E. @ 00&$$=C.E. 82th /ate/ $=)=0&$$. Therelea-t e>tra3ts 29 the -2ti9i3ati2-s are gie- 8el2w =

No%i)ia%ion No. 1/2011D.S.R. #E(.= I- e>er3ise 29 the ?2wers 32-9erre/ 87 s48=

se3ti2- #$( 29 se3ti2- *A 29 the Ce-tral E>3ise A3t, $%55 #$ 29

$%55(, the Ce-tral D2er-6e-t, 2- 8ei-g satis9ie/ that it is-e3essar7 i- the ?48li3 i-terest s2 t2 /2, here87 e>e6?ts thee>3isa8le g22/s 29 the /es3ri?ti2- s?e3i9ie/ i- 32l46- #)( 29 theTa8le 8el2w a-/ 9alli-g 4-/er Cha?ter, hea/i-g, s48=hea/i-g 2r tari99 ite6 29 the irst S3he/4le t2 the Ce-tral E>3ise Tari99 A3t,$%'* #* 29 $%'1(, s?e3i9ie/ i- the 32rres?2-/i-g e-tr7 i- 32l46-#0( 29 the sai/ Ta8le, 9r26 s2 643h 29 the /4t7 29 e>3ise leia8lethere2- 4-/er the sai/ Ce-tral E>3ise A3t, as is i- e>3ess 29 thea624-t 3al34late/ at the rate 29 $F ad *alore+

;r2i/e/ that -2thi-g 32-tai-e/ i- this -2ti9i3ati2- shall a??l7t2 the g22/s i- res?e3t 29 whi3h 3re/it 29 /4t7 2- i-?4ts 2r ta> 2-i-?4t seri3es has 8ee- tae- 4-/er the ?r2isi2-s 29 the CENer3ise 29 the ?2wers 32-9erre/ 87 s48=se3ti2- #$( 29 se3ti2- *A 29 the Ce-tral E>3ise A3t, $%55 #$ 29


6/21

$%55(, the Ce-tral D2er-6e-t, 2- 8ei-g satis9ie/ that it is-e3essar7 i- the ?48li3 i-terest s2 t2 /2, here87 e>e6?ts thee>3isa8le g22/s 29 the /es3ri?ti2- s?e3i9ie/ i- 32l46- #)( 29 theTa8le 8el2w a-/ 9alli-g 4-/er Cha?ter, hea/i-g, s48=hea/i-g 2r tari99 ite6 29 the irst S3he/4le t2 the Ce-tral E>3ise Tari99 A3t,$%'* # * 29 $%'1(, s?e3i9ie/ i- the 32rres?2-/i-g e-tr7 i- 32l46-#0( 29 the sai/ Ta8le, 9r26 s2 643h 29 the /4t7 29 e>3ise leia8lethere2- 4-/er the sai/ Ce-tral E>3ise A3t, as is i- e>3ess 29 thea624-t 3al34late/ at the rate 29 *F ad *alore+

TABLE

S.$.

Chaer $r headin $r sub-headin $r ari::

iem $: he 'irsShedu#e

esrii$n $: he e;isab#e

$$ds

#$( #0( #)(

0& )& I-trae-24s 9l4i/s,whi3h are 4se/ 92r s4gar, ele3tr2l7te2r 9l4i/re?le-ish6e-t

r26 the a82e, it 3a- 8e see- that the 8e-e9it 29 $F ad *alore+ isaaila8le s48Ge3t t2 the 32-/iti2- 29 -2-=aail6e-t 29 CEN ?ai/ 2- i-?4t seri3es 4-/er Ce-at Cre/itR4les, 0&&5. U-less this 32-/iti2- is satis9ie/, the 8e-e9it 29 $F 29 /4t73a--2t 8e gra-te/. The J4esti2- 29 tai-g CENt 29 N2ti9i3ati2- N2. $%''. The sai/ -2ti9i3ati2-

?r2i/e/ E>3ise /4t7 e>e6?ti2- 2- Zi-3 Ash s48Ge3t t2 the 32-/iti2- that-2 3re/it 29 /4t7 ?ai/ 2- the i-?4ts 4se/ i- the 6a-49a3t4re 29 sai/ g22/sshall 8e tae- 4-/er R4le *1A 2r R4le *+A 29 the Ce-tral E>3ise R4les,$%55. The J4esti2- 32-si/ere/ 87 the Larger Be-3h was whether this32-3essi2- 3a- 8e a??lie/ t2 i6?2rte/ Zi-3 Ash 92r the ?4r?2se 29 le7 29 C


7/21

The e>e6?ti2- -2ti9i3ati2- sti?4lates that -2 3re/it 29 /4t7?ai/ 2- the i-?4ts 4se/ i- the 6a-49a3t4re 29 sai/ g22/s hae8ee- tae- 4-/er R4le *1A 2r R4le *+A 29 Ce-tral E>3ise R4les,$%55. I- 2r/er t2 satis97 this 32-/iti2- it has t2 8e sh2w- that theZi-3 Ash i- J4esti2- ha/ 8ee- 6a-49a3t4re/ 9r26 i-?4ts 2- whi3h-2 3re/it 29 /4t7 has 8ee- tae-. The g22/s were 6a-49a3t4re/a8r2a/. It is 32662- -2wle/ge that the Ce-tral E>3ise A3t 29 I-/ia a-/ Ce-tral E>3ise R4les 29 I-/i3t /2 -2t a??l7 t26a-49a3t4re a8r2a/. There92re, the a??ella-ts 3lai6 that thei6?2rte/ 32-sig-6e-ts 94l9il the reJ4ire6e-t 29 the N2ti9i3ati2- has-2 s48sta-3e 2r 8asis i- 9a3ts. I- 2ther w2r/s, it is 3lear 9r26 thee>e6?ti2- -2ti9i3ati2- that it e>e6?ts 2-l7 Zi-3 Ash whi3h is?r2/43e/ 9r26 /4t7 ?ai/ i-?4ts. I- 2r/er t2 satis97 this 32-/iti2-, itis -e3essar7 that a 6a-49a3t4rer seei-g e>e6?ti2- sh24l/ sh2w

that the Zi-3 Ash was ?r2/43e/ 9r26 /4t7 ?ai/ i-?4ts. I6?2rte/g22/s are i-3a?a8le 29 94l9illi-g this 32-/iti2- a-/ there92re, 324l/-2t 3lai6 the e>e6?ti2- 4-/er -2ti9i3ati2- $%''.

This Larger Be-3h /e3isi2- ?reails 2er 2ther /e3isi2-s 29 this Tri84-alrelie/ 4?2- 87 the a??ella-t a-/ als2 taes i-t2 a3324-t the /e3isi2- 29 theH2-8le A?e> C24rt i- the 3ase 29 ",er+a *%. %d. #s4?ra(.

8.3

C26i-g t2 the relia-3e ?la3e/ 87 the a??ella-t i- the 3ase 29 ",er+a *%. %d. #s4?ra(, i- that ?arti34lar 3ase, the i6?2rte/ g22/ssatis9ie/ the /es3ri?ti2- gie- i- the e-tr7 as well as the 32-/iti2- 29 4se.

There92re, the A?e> C24rt hel/ that the 8e-e9it 29 e>3ise /4t7 e>e6?ti2- 92r the le7 29 Ct, the A?e> C24rt hel/ that e>?la-ati2- t2 Se3ti2- )#$( 29 theC4st26s Tari99 A3t will -2t 8e relea-t. Si6ilarl7 i- the 3ase 29 alaIndus%ries %d. #s4?ra( relie/ 4?2- 87 the a??ella-t, there als2 the i6?2rte/g22/s satis9ie/ -2t 2-l7 the /es3ri?ti2- 84t als2 the 32-/iti2- 29 4se i.e.i6?2rte/ g22/s -a6el7, 9i-ishi-g age-ts, /7e 3arriers t2 a33elerate the/7ei-g 2r 9i>i-g 29 /7e=st499s, ?ri-ti-g ?aste, a-/ 2ther ?r2/43ts a-/?re?arati2-s 29 a-7 i-/ 9alli-g 4-/er Hea/i-g N2. )0&5 2r )'&% 4se/ i-the sa6e 9a3t2r7 92r the 6a-49a3t4re 29 te>tiles a-/ te>tile arti3les. Theiss4e 8e92re the H2-8le A?e> C24rt whi3h is the 9a3t2r7, re9erre/ t2 i- the-2ti9i3ati2-, that is the 9a3t2r7 29 6a-49a3t4re 29 /7est499s 2r the 9a3t2r7 29 6a-49a3t4re 29 te>tiles a-/ te>tile arti3les. The H2-8le S4?re6e C24rthel/ that it is the 9a3t2r7 29 te>tiles a-/ te>tile arti3les whi3h is relea-t a-/s2 l2-g as the i6?2rte/ g22/s are 4se/ i- the 9a3t2r7 29 6a-49a3t4re 29


8/21

te>tiles a-/ te>tile arti3les, the Ce6?ti2- 3a--2t 8e /e-ie/. I- the9a3ts 29 the 3ase 8e92re 4s the7 are /isti-3t a-/ /isti-g4isha8le. Th24ghthe i6?2rte/ g22/s satis97 the /es3ri?ti2- gie- i- N2ti9i3ati2- N2. $0&$$,the7 /2 -2t satis97 the 32-/iti2- 92r aaili-g the e>e6?ti2-, that is, -2-=aail6e-t 29 CEN ?ai/ 2-i-?4t seri3es. This 32-/iti2- 3a- 8e satis9ie/ 2-l7 i- res?e3t 29 g22/s6a-49a3t4re/ i- I-/ia. Whe- this 32-/iti2- 3a--2t 8e satis9ie/ with res?e3tt2 i6?2rte/ g22/s, the J4esti2- 29 e>te-/i-g this rate 92r i6?2rte/ g22/s92r the ?4r?2se 29 C

8.4

Ca- we ig-2re the 32-/iti2- a-/ e>te-/ the 8e-e9it t2 i6?2rte/g22/s /isregar/i-g the 32-/iti2-. Settle/ ?ri-3i?les 29 stat4t2r7i-ter?retati2- /2 -2t ?er6it this. I- Balan% !in, .

C24rt lai/ /2w- the 92ll2wi-g ?ri-3i?le =

It 64st 8e e?t i- 6i-/ that whe-eer a law is e-a3te/ 87 thelegislat4re, it is i-te-/e/ t2 8e e-92r3e/ i- its ?r2?er ?ers?e3tie. Itis a- eJ4all7 settle/ ?ri-3i?le 29 law that the ?r2isi2-s 29 a stat4te,i-3l4/i-g eer7 w2r/, hae t2 8e gie- 94ll e99e3t, ee?i-g thelegislatie i-te-t i- 6i-/, i- 2r/er t2 e-s4re that the ?r2Ge3te/28Ge3t is a3hiee/. I- 2ther w2r/s, -2 ?r2isi2-s 3a- 8e treate/ t2hae 8ee- e-a3te/ ?4r?2selessl7. 4rther62re, it is als2 a wellsettle/ 3a-2- 29 i-ter?retatie G4ris?r4/e-3e that the C24rt sh24l/

-2t gie s43h a- i-ter?retati2- t2 ?r2isi2-s whi3h w24l/ re-/er the ?r2isi2- i-e99e3tie 2r 2/i24s.

I9 we 9ell2w this ?ri-3i?le, we 3a--2t /isregar/ the 32-/iti2- sti?4late/ i-N2ti9i3ati2- $0&$$=C.E. 92r the ?4r?2ses 29 le7 29 C

8.7

It will als2 8e relea-t t2 ?er4se the ?r2isi2-s 29 Se3ti2- ) 29 theC4st26s Tari99 A3t, $%+*, whi3h are re?r2/43e/ as 4-/er =

#$( A-7 arti3le whi3h is i6?2rte/ i-t2 I-/ia shall, i-

).a//iti2-, 8e lia8le t2 a /4t7 #herea9ter i- this se3ti2- re9erre/ t2 as

the a//iti2-al /4t7( eJ4al t2 the e>3ise /4t7 92r the ti6e 8ei-gleia8le 2- a lie arti3le i9 ?r2/43e/ 2r 6a-49a3t4re/ i- I-/ia a-/ i9 s43h e>3ise /4t7 2- a lie arti3le is leia8le at a-7 ?er3e-tage 29 its al4e, the a//iti2-al /4t7 t2 whi3h the i6?2rte/ arti3le shall 8es2 lia8le shall 8e 3al34late/ at that ?er3e-tage 29 the al4e 29 thei6?2rte/ arti3le

;r2i/e/ that i- 3ase 29 a-7 al32h2li3 liJ42r 92r h46a-


9/21

32-s46?ti2- i6?2rte/ i-t2 I-/ia, the Ce-tral D2er-6e-t 6a7, 87-2ti9i3ati2- i- the O99i3ial Daette, s?e3i97 the rate 29 a//iti2-al/4t7 hai-g regar/ t2 the E>3ise /4t7 92r the ti6e 8ei-g leia8le 2-a lie al32h2li3 liJ42r ?r2/43e/ 2r 6a-49a3t4re/ i- /i99ere-t States2r, i9 a lie al32h2li3 liJ42r is -2t ?r2/43e/ 2r 6a-49a3t4re/ i- a-7State, the-, hai-g regar/ t2 the E>3ise /4t7 whi3h w24l/ 8eleia8le 92r the ti6e 8ei-g i- /i99ere-t States 2- the 3lass 2r /es3ri?ti2- 29 al32h2li3 liJ42r t2 whi3h s43h i6?2rte/ al32h2li3liJ42r 8el2-gs.

;'lana%ion.= I- this s48=se3ti2-, the e>?ressi2- the e>3ise/4t7 92r the ti6e 8ei-g leia8le 2- a lie arti3le i9 ?r2/43e/ 2r 6a-49a3t4re/ i- I-/ia 6ea-s the e>3ise /4t7 92r the ti6e 8ei-g i-92r3e whi3h w24l/ 8e leia8le 2- a lie arti3le i9 ?r2/43e/ 2r 6a-49a3t4re/ i- I-/ia 2r, i9 a lie arti3le is -2t s2 ?r2/43e/ 2r

6a-49a3t4re/, whi3h w24l/ 8e leia8le 2- the 3lass 2r /es3ri?ti2-29 arti3les t2 whi3h the i6?2rte/ arti3le 8el2-gs, and

The E>?la-ati2- t2 the se3ti2- 6aes it a8s2l4tel7 3lear that whe- theg22/s 6a-49a3t4re/ i- I-/ia are leia8le t2 /i99ere-t rates 29 e>3ise /4t7,C

8.8

I- his 822 ;ri-3i?les 29 Stat4t2r7 I-ter?retati2-, $0th E/iti2-,0&$&, 4sti3e D.;. Si-gh e>?lai-s the ?4r?2se 29 E>?la-ati2- i- ?age 0$0as 92ll2ws =

KA- E>?la-ati2- is at ti6es a??e-/e/ t2 a se3ti2- t2 e>?lai-the 6ea-i-g 29 w2r/s 32-tai-e/ i- that se3ti2-. [!. !undara+illai . a%%a5,ira+an, #$%'*( $ SCC *%$, ??. 1$$, 1$) AIR $%'*SC *'0 i'a C,andra (u,idas . C,andan >u+ar !arar #0&&)( + SCC 11, ?. +$ AIR 0&&) SC )+&]. It 8e326es a ?art a-/?ar3el 29 the e-a3t6e-t. [Benal I++uni%4 Co. %d. . !%a%e o) Bi,ar , AIR $%** SC 11$, ? +))]. The 6ea-i-g t2 8e gie- t2 a-E>?la-ati2- 64st /e?e-/ 4?2- its ter6s, a-/ -2 the2r7 29 its?4r?2se 3a- 8e e-tertai-e/ 4-less it is t2 8e i-9erre/ 9r26 the

la-g4age 4se/. [>ris,na A44anar . Na%%a'eru+al illai , ILR 5),Ma/ **&, ?. *15 #;.C.(PPP.]. B4t i9 the la-g4age 29 theE>?la-ati2- sh2ws a ?4r?2se a-/ a 32-str43ti2- 32-siste-t withthat ?4r?2se 3a- 8e reas2-a8l7 ?la3e/ 4?2- it, that 32-str43ti2-will 8e ?re9erre/ as agai-st a-7 2ther 32-str43ti2- whi3h /2es -2t9it i- with the /es3ri?ti2- 2r the a2we/ ?4r?2se.

The E>?la-ati2- t2 Se3ti2- )#$( 29 the C4st26s Tari99 A3t has a 3lear


10/21

?4r?2se as state/ therei-. That ?4r?2se is t2 3lari97 what will 8e the rate 92r le7 29 A//l. !4t7 #C3ise /4t7 i- res?e3t 29 /26esti3all7 6a-49a3t4re/ g22/s a-/ theE>?la-ati2- 3lari9ies that it will 8e the highest rate. Th4s the 3lari9i3ati2-gie- i- the E>?la-ati2- 3a--2t 8e 2erl22e/ a-/ has t2 8e stri3tl792ll2we/. I- the ?rese-t 3ase, the highest rate 29 /4t7 leia8le 2-i-trae-24s 9l4i/s /26esti3all7 6a-49a3t4re/ is *F ad *alore+ 4-/er N2ti9i3ati2- N2. 00&$$, /ate/ $=)=0&$$. There92re, i/e-ti3al 2r si6ilar g22/s i6?2rte/ will attra3t C

8.?

This iss4e relati-g t2 le7 29 C

P. !248ts hae 8ee- raise/ a824t the a??li3a8le C3ise !4t7 $F has 8ee- leie/i/e N2ti9i3ati2- $0&$$=C.E., /ate/ $=)=0&$$, whe- i6?2rte/. It is94rther lear-t that 6a-4al 8ills 29 e-tr7 hae 8ee- ?er6itte/ at3ertai- 34st26s l23ati2-s as $F C3ise /4t7 as ?res3ri8e/ i/e-2ti9i3ati2- 00&$$=C.E., /ate/ $=)=0&$$ a-/ Te-th S3he/4le t2 thei-a-3e Bill. At the ti6e 29 4?/ati-g 29 ICES, the !ire3t2rate 29

S7ste6s ha/ 8ee- a/ise/ -2t t2 9ee/ N2ti9i3ati2- $0&$$=C.E.,/ate/ $=)=0&$$ i- the s7ste6 as $F rate will -2t 8e a??li3a8le 92r C3ise /4t7 rate. H2weer, i- res?e3t 29 these $)& ite6s, there aretw2 e>3ise /4t7 rates. It -ee/s t2 8e a??re3iate/ that i9 C -e4traliati2- 2- g22/s e>?2rte/ t2 I-/ia #ai- t2aail6e-t 29 i-?4t ta> 3re/it(, whereas 2- the 2ther ha-/ the/26esti3 6a-49a3t4rer s499ers all the i-?4t ta>es a-/ $F e>3ise/4t7 2er a-/ a82e that. Si-3e *F e>3ise /4t7 rate is ?a7a8lewhe- the 3e-at 3re/it 29 /4ties a-/ ta>es ?ai/ 2- i-?4ts a-/ i-?4tseri3es is aaile/ 29, the ta> treat6e-t 8e326es eJ4ita8le withthe g22/s 8ei-g i6?2rte/ i-t2 I-/ia, the i-?4t ta>es hai-g 8ee-


11/21

-e4tralie/ i-. the 324-tr7 29 e>?2rt. As s43h, the C

8.@

Th24gh the a82e Cir34lar is -2t 8i-/i-g 2- this Tri84-al, /4e

32-si/erati2- -ee/s t2 8e gie- as C.B.E. @ C. is the a4th2rit7 32-3er-e/with i6?le6e-tati2- a-/ a/6i-istrati2- 29 4-i2- i-/ire3t ta>es i- I-/ia. I-the 3ase 29 >.. Ver,ese . Ino+e "a O))ier = [$%'$] $)$ ITR *%+ #SC(the S4?re6e C24rt, 8ase/ 2- the earlier G4/g6e-t i- the 3ase 29 Bales,ar Baar%i . B,aira%i ass = [$%&'] ILR )* Cal +&$+&)e>?24-/e/ the ?ri-3i?le 29 a/6i-istratie 32-str43ti2-, i.e.,32-te6?2ra-e24s 32-str43ti2- ?la3e/ 87 a/6i-istratie 2r e>e34tie299i3ers 3harge/ with e>e34ti-g a stat4te, as 92ll2ws =

It is a well=settle/ ?ri-3i?le 29 i-ter?retati2- that 324rts i-32-str4i-g a stat4e will gie 643h weight t2 the i-ter?retati2- ?4t4?2-, it, at the ti6e 29 its e-a3t6e-t a-/ si-3e, 87 th2se wh2se/4t7 it has 8ee- t2 32-str4e, e>e34te a-/ a??l7 it.

8.9

I- the 3ase 29 Colle%or o) Cen%ral ;ise$ ?un%ur . And,ra!uar %d . = $%'' #)'( E.L.T. *15 #S.C.(, the H2-8le A?e> C24rt re=iterate/the sa6e as 92ll2ws

It is a well settle/ that the 6ea-i-g as3ri8e/ 87 the a4th2rit7iss4i-g the N2ti9i3ati2-, is a g22/ g4i/e 29 a 32-te6?2ra-e24se>?2siti2- 29 the ?2siti2- 29 law. Re9ere-3e 6a7 8e 6a/e t2 the28serati2-s 29 this C24rt i- >.. Var,ese . ",e Ino+e "a

O))ier$ ;rnaula+, [$%'0] $ SCR 10%. It is a well settle/ ?ri-3i?le29 i-ter?retati2- that 324rts i- 32-str4i-g a Stat4te will gie 643hweight t2 the i-ter?retati2- ?4t 4?2- it at the ti6e 29 its e-a3t6e-ta-/ si-3e, 87 th2se wh2se /4t7 has 8ee- t2 32-str4e, e>e34te a-/a??l7 the sa6e e-a3t6e-t.

Th4s ee- a??l7i-g the ?ri-3i?les 29 32-te6?2ra-e24s e>?2siti2- a-/a/6i-istratie 32-str43ti2-, the i6?2rte/ i-trae-24s 9l4i/ will attra3t C

?.

I- the light 29 the 92reg2i-g, we h2l/ that C

#;r2-24-3e/ i- C24rt 2- '=0=0&$)(


12/21

QQQQQQQ

Classification and exemption issues in Customs — Clarifications

Circular No. 1/2005-Cus., dated 11-1-2005

F.No. 528/78/200-Cus!"#$

%o&ernment of 'ndia

(inistr) of Finance !*epartment of +e&enue$

Central oard of xcise Customs, Ne *eli

u3ect 4 Clarification on &arious "ariff 'ssues - +eardin.

' am directed to sa) tat di&erence of practice reardin &arious "ariff related issues as een

rout to te notice of te oard. 6 numer of suc matters ere discussed at te "ariff

Conferences of Cief Commissioners of Customs eld at olata on 22nd and 29rd :anuar),

200 and illon from 19t to 15t (a), 200. ;n te asis of te recommendations of tese

"ariff Conferences, draft circulars ere prepared and put up on te *eptt.ulic Notices ma) e issued for te enefit of te "rade.


13/21

!*$ ?indi &ersion ill follo.

Enclosure

(i) Subject : Classification of Pontoon upgraded as Accommodation Barge.

Issue in Brief : "is matter as discussed in te "ariff Conference of Cief Commissioners of

Customs eld at olata on 22nd and 29rd :anuar), 200 @6enda >oint "-9A. >ontoon and

ares, ic are usuall) used for te transport of oods and sometimes of persons are enerall)

classified under "ariff ?eadin 8B01. "e >ontoon/are upraded to an 6ccommodation

are< is sout to e classified under ?eadin 8B01, on te round tat tere is a specific entr)

8B01100 for ares. ?oe&er, from te description, as ell as usae of suc &essels, it appears

tat tese oods are essentiall) for te purpose of accommodatin or personnel o are

orin on te production drillin platforms on te sea. "e primar) function of te &essel does

not appear to e transportation of oods and persons ut pro&idin accommodation to te drillin

platform cre. 6ccordinl), te appropriate and correct classification appears to e 8B05. "ere

is a difference in te rate of dut) under te to referred tariff eadins, ence te dispute. "e

Conference noted tat te intended use of te item in Duestion as as 6ccommodation are<

for 150 personnel and to pro&ide support function for pro3ect material storin transfer. 'ts

secondar) utilit) ) &irtue of its desin and onoard macineries !suc as moorin inces,

crane, free dec space, enerator, compressor loistic support etc.$ as for performin se&eral

di&erse functions as reDuired.

Decision : "e oods descried as E6ccommodation are are enerall) moored at one place.

"erefore, tain note of te ?N Notes to eadin 8B05, te item ould e more appropriatel)classifiale under eadin 8B05 since navigability was subsidiary to its main function. "is

?N notes also states EGGG.. >ontoons clearl) desined to ser&e as a ase for macinesG.

fall under eadin 8B05. 'n fact, ouse oats are specificall) co&ered under tis eadin. 't as

also noted tat descriin te product as are< sould not affect te classification of te product

and at as important as its actual use. 6ccordinl), it as een decided tat pontoons

upraded to accommodation are< are appropriatel) classifiale under eadin 8B05.

(ii) Subject : Classification of parts of Cellular phones.

Issue in Brief : "is matter as discussed in te "ariff Conference of Cief Commissioners ofCustoms eld at olata on 22nd and 29rd :anuar), 200 @6enda >oint "-A. "e importers or

manufacturers o import parts of cellular pones claim exemption under l. No. 920 of

Notification 21/2002-Cus., dated 1-9-2002, ic is applicale to parts of andsets and attract

N'H rate of dut) !0I C* J 0I C=*$, su3ect to fulfilment of condition No. 5 of tis

notification. #nder tis condition, te 3urisdictional 6ssistant Commissioner/ *eput)

Commissioner of Central xcise issues te necessar) certificate to te effect tat te importer


14/21

as executed te reDuired undertain ond it tem and tat e ill e folloin te reDuired

procedure for manufacture of xcisale oods as pro&ided for in Customs !'mport of %oods at

Concessional +ate of *ut) for (anufacture of xcisale %oods$, +ules, 1BBK. 6 dout as een

expressed in man) Commissionerates tat en all te parts reDuired for manufacture of te

Cellular pone andset are imported ) te manufacturer !eiter in te same consinment or

spread out o&er different consinments$, eter suc imports of parts can e denied te enefit

of serial No. 920 of te notification iid., ) treatin tem as complete andsets !in disassemled

form$ ) &irtue of +ule 2!a$ of te %eneral 'nterpretati&e +ules. 'f ) doin tis, te) et treated

as complete andsets under C"? 852520.17 in disassemled form, tere is a possiilit) of denial

of exemption under l. No. 920, ic applies onl) to parts, components and accessories of

cellular pones. 'f tis exemption is denied, te) ould e oterise cared to dut) as

applicale to andsets !5I C* J 0I C=*$ under l. No. 919 of Customs Notification 21/2002

dated 1-9-2002, read it te rele&ant C. xcise notification. "e Conference delierated o&er

te folloin 3udments relatin to te application of +ule 2!a$ of te %eneral 'nterpretati&e

+ules, speciall) CCE, Mumbai &. Maruti Udyog Ltd. @1BBK !1K$ +H" KK !"ri.$A, Wipro GE Medical Systems &. CCE & Customs, Bangalore @1BBB !10K$ .H.". 1KB !"ri.$A, CCE, Mumbai

&. Crescent Metal Processing Wors @1BBB !111$ .H.". 81 !"ri.$A, Polar !ppliances &.

Commissioner o" Customs, #e$ %eli @2001 !127$ .H.". 8 !"ri. - *el.$A, CCE, Bangalore &.

BPL Sanyo, @1BB8 !102$ .H.". 2B !(ad.$A, Si'a(i Wors &. CCE, !urangabad @1BB !KB$

.H.". K7 !"ri.$A.

Decision : "e oard too into account te fact tat tou te interpretati&e rules cannot

ala)s e in&oed for interpretin notifications ut still, tis ill depend upon te nature of te

notification. 'n te instant case, it is oser&ed tat te rele&ant serial nos. of te notification,

namel), 919, 91B 920 ranted exemption to certain items on te asis of su-eadin nos."is, terefore, reDuired tat te classification of eac imported item ad to e first determined

and tereafter exemption decided as per te rele&ant l. no. of te notification. "o decide te

classification of an item in disassemled form, rule 2!a$ of te 'nterpretati&e +ules ad to e

in&oed. "us, if ) in&oin +ule 2!a$, te items under import et classified under eadin

8525 as cellpones, exemption ill e a&ailale as per l. No. 919 of te notification onl) and

not as per l. No. 91B or 920. 't as, terefore, een decided tat eepin te lanuae of

Notification No. 21/2002-Cus., dated 1-9-2002 in mind, te imported oods ould first a&e to

e classified ) in&oin +ule 2!a$ of te 'nterpretati&e +ules and ten exemption i&en eiter

under l. No. 919, 91B or 920. 'n case, all te parts/components of te moile pone andset are

imported in a sinle consinment, it ould e classified as complete moile andset< under

C"? 852520.17 and ence it ould e ineligible for enefit under l. No. 91B or 920 of

Notification No. 21/2002-Cus., dated 1-9-2002.

(iii) Subject :Eligibility of general purpose abelling !achine under "otification "o.

#$%#&'Cus. dated $''#& for use in *e+tile ,ndustry.


15/21


Customs eld at olata on 22nd and 29rd :anuar), 200 @6enda >oint N-8A. Concessional rate

of dut) of 5I is extended to specified maciner)/eDuipment ic are meant for use in textile

industr) &ide . No. 250 of Notification No. 21/2002-Cus., dated 1-9-2002. Hist 90 of te said

Notification specifies laelin macine at l. No. 8 terein. "e intention of te Notification is

to allo concessional dut) for laelin macines ic are for use in textile industry. "e field

formations a&e noticed import of Haelin macines of eneral purpose ic can e used not

onl) in textile industr) ut also in oter industries. Haelin macines, imported ) tradin firms

are normall) used for eneral purposes and not in textile industr) alone. ut importers of suc

macines are claimin concessional rate of dut) under te said notification ) declarin tem as

maciner)/eDuipment for use in textile industr). +e3ection of te claim of te importers ma) not

e found sustainale as te imported laelin macines can e used also in textile industries.

Haelin macines ein an omni-us term, te Notification i&es room for unscrupulous

importers to a&ail of unintended enefit.

Decision : "e oard delierated upon te lanuae of te notification. "e expression used in

te notification is EGGGG..oods for use in te textile industr). "e notification, terefore,

does not appear to restrict te concession to onl) tose maciner) or eDuipment ic as

specificall) desined for use< in te textile industr). "e notification allos te import of

eneral purpose maciner) also as listed in Hist 90 so lon as te) are capale of use in textile

industr). 't as accordinl) een decided tat eneral purpose laellin macine< as eliile

for exemption under .No. 250 of Notification No. 21/2002-Cus., dated 1-9-2002, if it could also

e used in te textile industr).

(i-) Subject :Eligibility of e+emption under "otification "o. /%0'Cus. for 1uel ,njection Pump and ,njectors e+ported and re'imported after fitment on

Engines.


Customs eld at olata on 22nd and 29rd :anuar), 200 @6enda >oint N-10A. Notification No.

B/BK-Cus., dated 1K-12-BK exempts re-imported oods from Customs dut) su3ect to specified

conditions. 'n te case under reference, a compan) exported #niDue Fuel 'n3ection pumps and

'n3ectors< to teir enine manufacture facilit)< aroad. "ese pumps and in3ectors ere fitted on

enines, tested and te enine asseml) fitted it tese items ere imported ac into 'ndia.

"e importer filed a ill of ntr) declarin enine separatel) fuel pump and in3ectors fitted onte enine separatel), claimin enefit of Notification No. B/BK-Cus. for fuel pump and

in3ectors. Fuel pump and in3ectors could e identified as tose ic ere oriinall) exported

it reference to export documents and on tat asis, te enefit of Notification B/BK-Cus. as

extended ) te Customs formation. C+6 raised an o3ection oser&in tat in terms of te

second pro&iso to Notification No. B/BK-Cus., exemption under te ao&e notification ma) e

alloed onl) if te oods exported and imported are te same. 'n te instant case, te items


16/21

exported ere multi c)linder fuel in3ection pump classified under eadin 819 of te Customs

"ariff and te items imported are enine asseml) fitted it fuel in3ection pumps and in3ectors

classifiale under eadin 8708BB00 of te Customs "ariff. "us, tere as een functional

difference in te oods imported and exported esides canes in classification of te oods

imported and exported. "us te condition reardin similarit) of imported/exported oods did

not appear to e satisfied.

Decision : "e oard delierated upon te ordin of Notification No. B/BK-Cus. "e

notification reDuires tat te exported item and te re-imported item sould e te same and it

sould e possile to estalis teir identit). "is notification is meant to co&er cases of repair or

reprocessin it te exported article retainin its identit). 'n te instant case at as een

exported are fuel in3ection pumps and in3ectors and te items imported are enines !tou fitted

it te in3ection pumps and in3ectors$. 'f te %o&t. feels tat suc t)pes of cases sould e

co&ered ) te said notification, it sould e suital) amended to do so. 't as accordinl) een

decided ) te oard tat fuel in3ection pumps and in3ectors exported and re-imported afterfitment onto enines are not co&ered ) Notification No. B/BK-Cus., dated 1K-12-BK.

(-) Subject : ,mport of AC* test tubes ' Benefit as accessories of the AC* machine

("otification "o. #$%#&'Cus. dated $''#& Sl. "o. 0B).


Customs eld at olata on 22nd and 29rd :anuar), 200 @6enda >oint N-19A. "e issue relates

to assessment of 6C" !6cti&ated Clot "ime$ test tues and eter 6C" test tues can e

considered as accessories of 6cti&ated Clot "ime !6C"$ macines and ence eliile for enefit

of Notification No. 21/2002-Cus., dated 1-9-2002, l. No. 9K9 !Hist 97 l. No. 5B$. #nder Notification No. 21/2002-Cus., dated 1-9-2002, l. No. 9K96 co&ers specified medical

eDuipments as i&en in Hist 97 annexed to te said Notification. "ese eDuipments attract

concessional rate of dut) L 5I onl). Furter, under entr) 9K9 of te said Notification,

concessional rate of dut) L 5I asic is extended to accessories of te said eDuipments.

6cti&ated Clot "ime (acine !6C" macine$ appears in Hist 97 at l. No. 5B and terefore,

attracts dut) L 5I onl). "e item in dispute is 6C" test tue, ic is claimed as accessor) of

6C" macine, for co&erae under 9K9 of te said Notification. >erusal of te product literature

of 6C" "est "ue !(odel F"C6 510$ sos tat tis test tue is coated inside it an acti&ator

and contains diatomaceous eart !12 m$. Fres ole lood, 2 ml, is added to it to conduct

6cti&ated Clottin "ime !6C"$ "est, ic is commonl) used for ?eparin anti-coaulationmonitorin< durin )pass surer) and oter sureries. "e 6C" tests are performed usin ole

lood at te patients< ed side it ?emocron 6C" macine< models 01 or 801. ?eparin is an

anticoaulant ic is essentiall) reDuired durin ;pen ?eart urer) to pre&ent tromosis

!locin of arteries$. ;&er-dosin of eparin can lead to danerous leedin ereas under-

dosin leads to tromosis. "e 6C" test is an important test to determine te ao&e state. 6


17/21

diital timer on te 6C" macine determines te coaulation time in seconds, non as te

clottin time.

Decision : "is issue as examined ) te oard in consultation it te *irectorate %eneral of

?ealt er&ices !*%?$ and it as een clarified ) te *%? tat

6C" test tues are specific to 6C" macines and cannot e used for an) oter purposeM ence

te 6C" test tues are to e considered as accessories to te main eDuipment, namel) 6C"

macine, listed at entr) No. 5B under list 2B of te Notification 17/2001 dated 1-9-2001


18/21

Decision : "e oard too note of te fact tat te C%6" ad decided in case of *ant ati

tat it ould e appropriatel) classifiale under C"? 99.0K. ince *ant ati and *ant (uta

are similar products, classification of *ant (uta ould also fall under C"? 99.0K. ?oe&er,

since te referred notification specificall) reDuires tat te oods sould e toot poder, *ant

(uta ein a ra material for te manufacture of Hal *ant (an3an


19/21

onl) to an indi&idual and not to Compan). "e Court eld tat a compan) as a leal person

and, terefore, te exemption ould e a&ailale to companies as ell. Folloin tis, te

C%6" in te case of -esoram *ndustries Ltd. &. Collector o" Customs, Calcutta, reported in

1BBB !108$ .H.". KB !"riunal$ eld tat te free replacement spares imported ) a compan)

ere entitled for te enefit of tis exemption. ?oe&er, in anoter order, te oma) ?i

Court in te case of M)s. Birla Ericson and oters &. Union o" *ndia dismissed te petition

oldin tat te exemption as not meant for import for commercial purpose. 'n te order,

oe&er te Court as not referred to te earlier orders of te oma) ?i Court and oter

orders of te "riunal.

Decision : "e oard too into account tat te intention of te notification as to restrict te

exemption to imports ) indi&iduals ic as reflected ) te use of ords pri&ate personal

propert)


20/21

eter te reistration is a tecnical formalit) or not, te field formations ma) compare te date

of dispatc of te car it te date of reistration. 't as, accordinl), decided ) te oard tat

temporar) reistration of te ind discussed ao&e, sall not interfere it te notification

enefit.

(+) Subject : Classification of used steel rails for re'rolling >nder C*? =#&/ or =

and hether freely importable.


Customs eld at illon on 19t - 15t (a), 200 @6enda >oint "-2A. "e issue in&ol&ed is

eter te oods descried as Eused steel rails for re-rollin are classifiale as scrap of steel

under eadin 720 of te Customs "ariff 6ct, 1B75 or as old and used rails of raila) under

eadin 790210.10. "is ould also determine te importailit) of te said item i.e. eter te

oods are freel) importale under para 2.1 of te Forein "rade >olic), 200-200B read it

para 2.90 of te ?and oo of >rocedure, =ol. ', or eter it ould e restricted for import and

reDuire specific license in terms of para 2.17 of te polic) iid. "e Easte and scrap of iron

and steel is classified under eadin 720 of te Customs "ariff 6ct, 1B75. ection Note 8!a$ to

ection = of te Customs "ariff 6ct defines te term aste and scrap as Emetal scrap and aste

from te manufacture or mecanical orin of te metals and metal oods definitel) not usale

as suc ecause of reaae, cuttin up, ear or oter reasons. xplanator) Notes to ?N

under eadin 720 mention tat te eadin co&ers aste/scrap of iron and steel as defined in

Note 8!a$ to ection =. "e note mentions details of te articles, ic are co&ered under said

eadin. 't also mentions tat te aste and scrap is enerall) used for reco&er) of metals )

remeltin or for te manufacture of cemicals. ?oe&er, te eadin excludes articles, ic

it or itout repair or reno&ation can e reused for former purpose or can e adopted for oter usesM it also excludes structural steel ors useale after reneal of orn out parts.

Decision : "e oard considered te alternati&e eadins of 72.0 and 79.02 for te item. "e

main point for discussion related to te polic) restrictions on te import of used rails. Capter 79

of te C"6


21/21

%o&ernment of 'ndia

(inistr) of Finance !*epartment of +e&enue$

Central oard of xcise Customs, Ne *eli

u3ect 4 Classification of used rails - +e.

' am directed to in&ite )our attention to te oard

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