COMMISSIONER OF CUS. Vs. BHARAT STARCH INDUSTRIES LTD.

JUDGEMENT

(1.) M /s. Bharat Starch Industries (respondents) filed a Bill of Entry seeking clearance of the goods imported by them (viz. Ion exchange resins) under the EPCG scheme at NIL rate of duty in terms of Notification No. 111/95 -Cus. against a release advice dated 11 -9 -1996 issued by Mumbai Custom House. The subject goods were covered by an EPCG licence No. P/CG/2134490/C/XX/37/01 /95, dated 22 -8 -1995 issued by the DGFT authorities under Para 38 of the EXIM Policy, 1992 -97 AM, which was registered at Mumbai Custom House. However, the Asstt. Commissioner, Appraising Group VA, Jawahar Custom House vide his order, dated 4 -10 -1996 rejected the party's claim for assessment under the EPCG scheme and denied concessional assessment under Notification No. 111/95 -Cus. on the grounds that the goods imported did not fall under the purview of 'Capital goods' as defined in the Notification No. 111/95 -Cus. Therefore, as the goods in question failed to satisfy the primary requirement laid down in the Notification No. 111/95 -Cus. to qualify for concessional assessment envisaged therein, they were denied benefit under the same. The Asstt. Commissioner held that though the goods are undoubtedly used for the purification of Dextrose or Citric Acid, they do not participate in any chemical reaction and they neither accelerate nor retard such reaction so as to be considered as catalyst which is covered by the Notification.

(2.) HE , therefore, concluded that the goods in question cannot be considered as catalysts for initial charge for the purpose of inclusion in the definition of 'capital goods' in Notification No. 111/95 -Cus. Consequently, he ordered assessment of the goods on merits under their respective tariff heading at an effective duty rate applicable thereto. He held that the goods were consumables and not capital goods as defined in Notification No. 111/95 -Cus.

(3.) BEING aggrieved, the importer preferred an appeal before the Commissioner of Customs (Appeals). They contended that the impugned goods are 'Catalysts' for initial charge and therefore, covered under the term 'Capital goods' as defined in the Notification No. 111/95 -Cus. and consequently eligible for concessional assessment under the same. They also averred that the lower authority bypassed the provisions of the Import Policy and disregarded the background to the issuance of an EPCG licence by a Committee consisting of a team of experts and experienced persons in the field. Commissioner of Customs (Appeals) vide her Order No. 838/96 -BCH, dated 4 -11 -1996 set aside the impugned order of the Asstt. Commissioner and granted consequential relief to the appellants while allowing the appeal. The ld. Commissioner of Customs (Appeals) held that as the appellants have a valid EPCG import licence issued by the DGFT authorities which is duly registered by the Customs authorities and includes the impugned goods, it is incorrect to deny the benefit of Notification No. 111/95 -Cus. to the goods under import. Further, Commissioner of Customs (Appeals) held that as the EPCG licence has been specifically issued under the provisions of the EXIM Policy, therefore, to disregard this is erroneous and bad in law.