The Allahabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the benefit of customs duty exemption cannot be denied for not claiming it at the time of importation of raw materials.
The bench of P.K. Choudhary (Judicial Member) and Sanjiv Srivastava (Technical Member) has observed that order sought to deny the benefit of said exemption notification to the appellant for the reason that appellant had not claimed the same at the time of importation of these raw materials and hence could not have claimed the same subsequently at the time of clearance from EOU on de-bonding.
The appellant/assessee is an EHTP Unit for manufacture of excisable goods namely Mobile Phone Handsets falling under Chapter sub-heading of 85171210 and 85171290 of the First Schedule of the Central Excise Tariff Act,1985, and Tablet Computer falling under Chapter sub- heading of 84713090 of the First Schedule of the Central Excise Tariff Act,1985.
For manufacture of the excisable goods, the party was procuring imported and indigenous capital goods, raw materials and consumables at Nil rate of duty by availing the benefit under the provisions of Notification No. 52/2003-Cus dated 31/03/2003. The receipt and consumption of the raw material and other goods were being reflected in the monthly ER-2 returns filed with the department.
The appellant contended that Debonded goods are at par with the “imported goods” and the rates in force refer to the effective duty rate. Hence the appellant has rightly discharged “applicable” duty in terms of Par 4 (b) of the Notification No 52/2003 on the de-bonded raw materials.
The tribunal while allowing the appeal held that it is a case where the assessee from the zero rated scheme is moving to another scheme with a higher (higher than zero) but concessional rate of duty. It is also a case of clearance from warehouse consequent to debonding. If the Department was satisfied they had received the goods and accounted for under the zero-duty scheme, they can not entertain doubt about receipt of the goods for the intended use. It was also submitted that there was no change of premises and before and after conversion of the status the unit was within the jurisdiction of the same officers. To hold that in such a situation they shall not be eligible for benefit of any notification and that they are available only at the time of import will be contrary to the understanding and practice in respect of clearance from warehouses.
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Case Details
Case Title: M/s Samsung India Electronics Pvt. Ltd. Versus Commissioner of Central Excise, Noida-I
Case No.: Customs Appeal No.70524 of 2017
Date: 16 January, 2025
Counsel For Appellant: B.L. Narasimhan
Counsel For Respondent: Rajpal Sharma