Tata
Tea Ltd. Vs. The Commmissioner of Customs, Chennai [1999] INSC 401 (25 November 1999)
S.P.Bharucha,
A.P.Misra, R.C.Lahoti R.C. Lahoti, J.
The
appellant is a tea company. In the year 1982 it imported two decanter machines
from Germany. The customs duty, additional duty
and the other duties leviable thereon were duly paid. The machines were
installed at the tea factory of the appellant situated at Munnar (Kerala). In
the year 1992 some parts of the machine requiring such repairs as could not be
carried out in India, were sent to Germany after obtaining previous permission
of the Government of India. The parts were repaired and thereafter re-imported
in July, 1993. The appellant claimed exemption from payment of customs duty
under Notification No.13/81 which was denied by the Assistant Collector of
Customs. An appeal preferred by the appellant before the Commissioner of
Customs (Appeals) was allowed. The Revenue preferred a further appeal before
the CEGAT which has been allowed and the order of the Assistant Collector of
Customs restored.
Cross
appeal preferred by the appellant has been dismissed.
Aggrieved
by the order of Tribunal, the appellant has filed these appeals under Section
130 E of the Customs Act, 1962.
The
only question arising for decision is whether the appellant is entitled to
benefit of Notification No.13/81 read with Export Import Policy, 1992-97
(hereinafter `Policy', for short). Export and Import Policy 1992-97 announced
certain benefits and privileges to 100% export oriented units (EOUs). Vide
order dated 9th June, 1992 the Government of India declared the appellant a
unit entitled to facilities and privileges admissible under the 100% export
oriented scheme by permitting the conversion of the appellant from existing
domestic tariff area (DTA) into 100% EOU at Munnar in the State of Kerala for
the manufacture of instant tea powder and aqueous tea aroma (by-product) upto
the specified capacity. This decision of the Government of India entitled the
appellant to import additional capital goods worth Rs.300 lacs CIF for the
project as per the list enclosed which included decanters, two in number. It
was also specified that the import of capital goods, raw materials and
components for production under this scheme shall be exempt from customs duty.
Availing the benefit of EOU sanction letter the appellant had imported capital
goods (other than those in issue) worth Rs.225 lacs. A balance of Rs.75 lacs
entitlement was still available to the appellant.
According
to the appellant the cost of repairs incurred in Germany was Rs.38,06,017/- which was declared by it to be the value
of the goods for the purpose of re-importation in terms of Notification
no.13/81.
Notification
No.13/81 has been issued in exercise of powers conferred by sub-section (1) of
Section 25 of the Customs Act, 1962. The Central Government has exempted
capital goods, inter alia, when imported into India for the purpose of manufacture of articles for export out
of India by 100% EOUs provided that the
importer has been granted necessary licence for the import of the goods for the
said purpose. This is one of the several conditions that is required to be
satisfied.
The
Import Export Policy 1992-97, vide para 24, provides that second hand capital
goods and any other second hand goods shall not be imported unless permitted by
this policy or in accordance with a licence issued in this behalf. Para 25
catalogues (a) to (l) sectors of the industry for which second hand capital
goods may be imported without a licence. Admittedly, the appellant does not
fall in any of such categories. Para
26 provides that any other second hand capital goods (i.e. other than those
specified in para 25) may be imported in accordance with a licence issued in
that behalf. Para 31 permits imported capital goods
or parts thereof being sent abroad for repairs and re- imported but subject to
certain specified conditions. Para 159
permits conversion of an existing domestic tariff area (DTA) unit into an EOU.
It is specifically provided - "no concession in duties and tax shall,
however, be available under the scheme for plant machinery and equipment
already installed". Para 172 allows the units to re-import, after repairs
abroad, machinery equipment exported by them for this specific purpose and
payment of foreign exchange for this purpose.
There
is yet another notification No.204/76 issued under Section 25(1) of the Customs
Act whereby articles when re-imported into India after having been exported for
repairs subject to compliance with certain specified conditions have been
declared liable to payment of duty only on the value of such re-imported goods
which would be made up of the fair cost of repairs carried out plus insurance
and freight charges both ways.
The
Tribunal has referred to and made analysis of all the abovesaid provisions and
then concluded that the Import Export Policy 1992-97 read with Notification
No.13/81 gives exemption to the goods imported for the first time in India and
does not cover the goods already imported and sent abroad for the purpose of
repairs and then re- imported to India.
Having
heard the learned counsel for the parties, we are of the opinion that the order
of the Tribunal cannot be found fault with. Under Section 20 of the Customs
Act, 1962 read with the definition of `import' as given in clause 23 of Section
2, imported goods would include re-imported goods as well and therefore the
goods sent out of India and re- imported would also be liable to payment of
duty in the same manner in which they would have been liable if imported for
the first time in India. In the matter of goods sent out for repairs only there
is exemption notification no.204/76.
The
benefit thereof has been taken by the appellant. A perusal of Import Export
Policy 1992-97 and Exemption Notification No.13/81 clearly shows that the
benefit thereof was not available to the appellant in the case at hand. The
machinery parts exported for repairs and re-imported thereafter did not require
any licence for the import of the goods, which licence is one of the conditions
precedent to attract applicability of Notification No.13/81. Same is the
inference which flows from the provisions contained in paragraphs 24, 25, 26
and 31 of the Policy. Para 172 of the Policy makes it legal to re-import after
repairs abroad the machinery and equipment exported specifically for the
purpose of repairs and also allows release of foreign exchange payment for the
purpose. Both these things may not have been permissible but for para 172 of
the Policy. This is the only effect of para 172. Reliance on para 172 so as to
link the Policy with Notification No.13/81 is misconceived. Para 159, while permitting conversion of an existing DTA
into EOU, specifically excludes any concession in duties and tax (under the
Policy) being made available to plant and machinery already installed. The
parts exported and re-imported by the appellant were of the machinery `already
installed' on the date of promulgation of the Policy. They were certainly not
covered thereunder.
For
the foregoing reasons, the appeals are held liable to be dismissed and are
dismissed accordingly though without any order as to the costs.
Back