Dalmia Cement (Bharat) Limited Vs Commissioner of Customs (CESTAT Kolkata)
The CESTAT Kolkata allowed the appeal filed by Dalmia Cement (Bharat) Limited against the levy of interest under Section 61(2) of the Customs Act, 1962 on capital goods imported under the Manufacture and Other Operations in Warehouse Regulations, 2019 (MOOWR Scheme), and set aside the impugned appellate order.
The appellant, engaged in the manufacture of clinker and cement, obtained a licence under Sections 58 and 65 of the Customs Act for a private bonded warehouse. It imported a Cooler (Gear Box) from Germany as capital goods, filed an Into-Bond Bill of Entry dated 31.01.2023, and warehoused the goods without payment of customs duty under the MOOWR Scheme. The goods were intended to be used in the manufacturing process. Subsequently, the appellant cleared the goods for home consumption by filing an Ex-Bond Bill of Entry dated 25.07.2023, paid deferred customs duty of Rs.12,88,709, and also paid interest of Rs.43,898 under protest after the Assistant Commissioner demanded interest under Section 61(2). The Commissioner (Appeals) upheld the levy, leading to the present appeal.
The appellant contended that Section 61(1)(a) applies to capital goods intended for use in a warehouse where manufacturing operations are permitted under Section 65 and does not require actual use of the goods. It submitted that the imported gear box had always been intended for manufacturing operations, although subsequent operational and commercial considerations resulted in its clearance for home consumption. The appellant relied on Supreme Court decisions interpreting the expression “for use” as “intended for use”, the Delhi Bench decision in CC (Preventive) Jaipur vs. ACME Akelra Power Technology Pvt. Ltd., CBIC FAQs dated 27.10.2020, and public notices clarifying that capital goods could be cleared from a Section 65 warehouse on payment of applicable customs duty without interest. It also argued that Paragraph 12 of Circular No. 34/2019-Customs dated 01.10.2019 applied to goods warehoused under Section 58 simpliciter and not to goods imported with the intention of use under the MOOWR Scheme.
