Case Law Details

Case Name : LM Wind Power Blades (India) Private Ltd. Vs. Commissioner of Customs, Tuticorin
Appeal Number : [2014 (12) TMI 576 - CESTAT CHENNAI]
Date of Judgement/Order :
Related Assessment Year :

LM Wind Power Blades (India) Private Ltd (the Appellant) is a manufacturer of Rotor Blades and had filed Bills of Entry for import of goods used for manufacture of Rotor Blades (impugned goods). The Appellant imported impugned goods and claimed exemption from Countervailing duty (CVD) under Sl. No. 237A of Notification No. 6/2002-Central Excise dated March 1, 2002 as amended by Notification No. 29/2005-Central Excise dated May 31, 2005 (the Exemption Notification).

The Revenue alleged that the exemption availed was wrong as the impugned goods were not classifiable under Chapter heading specified in the Exemption Notification. Therefore, proceedings were initiated against the Appellant demanding differential Customs duty of Rs. 1,48,92,523/-. The Adjudicating Authority as well as the Commissioner (Appeals) confirmed the demand reclassifying the impugned goods and denied the CVD exemption. Being aggrieved, the Appellant preferred an appeal before the Hon’ble CESTAT, Chennai.

The Hon’ble CESTAT, Chennai held as under:

  • As per the rules of interpretation, first imported goods are to be correctly classified as per the description provided in the Schedule to the Customs Tariff Act, 1975 (the Customs Tariff Act);
  • The classification of goods precedes over the determination of rate of duty or any exemption applicable to the said goods. Only after classifying the goods into correct chapter headings, under respective chapter of Customs Tariff Act or Central Excise Tariff Act, 1985 (CETA), the question of extending of Notification benefit or rate of duty to be finalised and not vice versa;
  • The Hon’ble Supreme Court in case of Appraiser Madras Customs Vs. Tamil Nadu Newsprint Papers Ltd.has held that while interpreting Notification it has to be strictly interpreted in the language in which it was described;
  • In terms of the Exemption Notification, the exemption benefit is extended to the Excisable goods of the description

specified in table read with concerned list appended and falling within chapter, heading number or sub heading number of the First Schedule to the CETA. Hence, both the criteria, impugned goods confirm description and fall under heading or sub heading of the first Schedule of the CETA are to satisfied to avail exemption.

Hence, the Hon’ble Tribunal held that the Adjudicating Authority has rightly classified the impugned goods and denied CVD exemption to the Appellant.

(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: [email protected])

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