Case Law Details
Commissioner of Customs Vs Gamesa Wind Turbines P. Limited (CESTAT Chennai)
Introduction: The case of Commissioner of Customs vs. Gamesa Wind Turbines P. Limited, adjudicated by CESTAT Chennai, centers on whether customs exemption benefits can be granted to an importer of wind-operated electricity generator parts when they fail to produce the necessary certificate from the Ministry of New and Renewable Energy (MNRE). This article provides an in-depth analysis of the case and its implications.
Detailed Analysis:
1. Background: Gamesa Wind Turbines imported various parts of Wind Operated Electricity Generators using different Bills of Entry. To be eligible for customs exemption under Notification No. 21/2012-Cus., as amended by Notification No. 21/2014-Cus., the importer must present a certificate from MNRE at the time of import.
2. Missing Certificate: The respondent, Gamesa Wind Turbines, did not provide the required certificate when importing the goods. Subsequently, they sought a refund of the Special Additional Duty (S.A.D) they had paid. Their refund claim was initially rejected on the grounds that they had not contested the assessment.
3. Appeals and Remand: Gamesa Wind Turbines appealed the rejection before the Commissioner (Appeals), arguing that they were entitled to the customs exemption benefit since they had produced an office memorandum from MNRE. The Commissioner (Appeals) ruled in their favor, setting aside the original authority’s assessment and remanding the case for reassessment, including extending the customs exemption benefits.
4. Department’s Appeal: The Department, dissatisfied with the Commissioner (Appeals)’ decision, filed an appeal before CESTAT Chennai, contending that Gamesa Wind Turbines should not receive the exemption as they had failed to furnish the required certificate.
5. Legal Consideration: The notification specifies that the importer must produce the certificate at the time of import to claim the exemption from S.A.D. In this case, Gamesa Wind Turbines did not provide the necessary certificate but relied on an office memorandum issued by MNRE. The critical issue is whether this memorandum can be considered equivalent to the certificate stipulated in the notification.
6. Department’s Argument: The Department argued that the notification is clear in its requirement for a certificate and that the office memorandum does not meet this criterion. They contended that the Commissioner (Appeals) had erred in determining Gamesa Wind Turbines’ eligibility for the exemption.
7. Respondent’s Defense: Gamesa Wind Turbines maintained that they could not obtain the certificate as required by the notification at the time of import. They had, however, secured an office memorandum in lieu of the certificate. Their defense rested on the premise that the office memorandum should be accepted as meeting the certificate requirement.
8. CESTAT’s Decision: CESTAT Chennai ruled that the requirement for availing the customs exemption benefits was the production of a certificate from MNRE at the time of import. The notification did not mention any provision to condone this requirement in cases where the certificate was absent, even if an office memorandum from MNRE was presented. Consequently, the CESTAT found that the Commissioner (Appeals)’ order was legally incorrect.
9. Reinstatement of Original Authority’s Order: As a result, CESTAT overturned the Commissioner (Appeals)’ decision, restoring the original authority’s order. The Department’s appeal was allowed.
Conclusion: The case of Commissioner of Customs vs. Gamesa Wind Turbines P. Limited underscores the importance of strict compliance with the conditions specified in customs notifications. Even if an alternative document, such as an office memorandum, is available, the absence of the required certificate can affect the eligibility for customs exemption benefits. Importers and businesses must be diligent in meeting the prerequisites set forth in customs notifications to avoid disputes and ensure smooth import processes.
FULL TEXT OF THE CESTAT CHENNAI ORDER
Brief facts are that the respondent imported parts of Wind Operated Electricity Generators vide various Bills of Entry. As per Notification No.21/2012-Cus. dt. 17.3.2012 as amended by Notification No.21/2014-Cus. dated 11.07.2014, the respondent would be eligible for the benefit of exemption, if they produce a certificate at the time of import from the Ministry of New and Renewable Energy (M.N.R.E) The respondent herein did not produce the requisite certificate at the time of import and later on the basis of an Office Memo issued by the M.N.R.E, they filed a refund claim for the refund of the Special Additional Duty (S.A.D) paid by them. The said refund claim was rejected by the original authority vide order dt. 16.06.2015 stating that the refund claim cannot be allowed as the respondent has not challenged the assessment. Against this order, the respondent filed appeal before the Commissioner (Appeals). After taking note of the submissions made by the respondent, the Commissioner (Appeals) vide order impugned herein held that the respondent is eligible for the benefit of Notification No.21/2012-Cus. dt. 17.3.2012 as they have produced the required certificate from M.N.R.E. The original authority’s assessment order was set aside and the matter was remanded to the Assessment Group to recall and reassess the Bill of Entry extending the benefit of Notification No.21/2012-Cus. dt. 17.3.2012 as amended by Notification No.21/2014-Cus. dated 11.07.2014. Aggrieved by such order, the Department is now before the Tribunal.
2. A.R Sri R. Rajaraman appeared and argued for the Department. It is submitted by the Ld. A.R that the condition in the Notification No.21/2012-Cus. as amended by Notification No.21/2014-Cus. dated 11.07.2014, is that the importer has to furnish a certificate at the time of import. In the present case, the respondent has not produced the certificate at all and they have produced only an office memorandum issued by the M.N.R.E. The said document cannot be accepted as a certificate required to be produced as per the notification. The finding of the Commissioner (Appeals) that the respondent is eligible for the benefit of notification is therefore erroneous. It is argued that the Commissioner (Appeals) ought not to have remanded the matter to reassess the bills of entry as the respondent has not produced the certificate at the time of import. It is prayed that the appeal may be allowed.
3. Ld. Counsel Sri M. Kannan appeared for the respondent. It is submitted by the counsel that the respondent could not obtain the certificate as required by the said notification at the time of import. They had obtained an office memorandum in regard to the certificate. Ld. Counsel prayed that the said office memorandum may be treated as in par with the certificate as required under the Notification No.21/2012-Cus. dt. 17.3.2012 as amended. It is prayed by the learned counsel that Commissioner (Appeals) having remanded the matter to recall and reassess the bills of entry there is no infirmity in the impugned order.
4. Heard both sides.
5. The facts narrated above show that one of the conditions for availing the benefit of the exemption from S.A.D at the time of import of the impugned goods is that the importer has to produce a certificate from the Ministry of New and Renewable Energy, Govt. of The respondent has not furnished the certificate while filing the Bills of Entry. There is nothing stated in the notification that the said condition can be condoned even if the respondent does not have the required certificate and have furnished only an office memorandum issued by the M.N.R.E. We therefore find that the order passed by the Commissioner (Appeals) is not legal and proper. The direction to remand the matter so as to recall and reassess the bills of entry cannot therefore sustain. The impugned order is set aside. The order passed by the original authority is restored. The appeal filed by the Department is allowed.
(dictated and pronounced in court)
