Whether benefit of Notification can be denied on premise that person entering into high sea sales agreement is not importer?

PJ/ Case Law/2013-14/1619

Case:- M/s APCA POWER PVT LTD, M/s PHOTON ENERGY SYSTEMS LTD, M/s MEGHA ENGINEERING & INFRASTRUCTURE LTD Vs COMMISSIONER OF CUSTOMS, KANDLA

Citation:- 2013-TIOL-912-CESTAT-AHM

Brief facts:- The appellant has engaged in various unwanted agreements of high sea sales and wants to claim benefit of Notification no. 01/2011 Cus. The appellant has imported goods which are eligible for the exemption under Notification no. 01/2011-cus. But the Revenue had argued that the appellant had entered into unwanted high sea sale and can not be said an importer. Thus, goods were confiscated and raised demand of the amount involved. Consequently, the appellant had filed stay petition for the waiver of pre-deposit of demand and argued that since, appellant has been issued certificate by Govt. of India, Ministry of New and Renewable Energy recommending grant of exemption, the benefit of the notification cannot be denied.

Appellants contention:- The appellant submits that the conditions of Notification No.1/2011-Cus. have been complied with. The appellant had filed Bill of Entry along with certificate issued by the Ministry of New and Renewable Energy to the Custom authorities. In order to avail the benefit of the said Notification, goods imported must be used for initial setting of solar power generation project or facility. The appellant had also produced various documents relating to purchase order raised by M/s Megha Engineering & Infrastructure Ltd. for the supply of consignment in question and submit that the said order placed on M/s Solar World Asia Pacific Pte Ltd. It is submitted by the appellant that a person who is engaged in High sea sales is a person holding himself out to be the owner and covered within the definition of Importer u/s 2(26) of Customs Act, 1962.

The appellant had also drew attention to the judgment of this Tribunal in the case of Gujarat Adani Port Ltd - 2013 (287) ELT 330 (Tri- Ahmd ) to submit that such a proposition is upheld by Tribunal.

Respondents Contention:- The respondent, on the other hand, submits that the original contract was entered by M/s APCA Power Pvt. Ltd. with M/s Photon Energy Systems Ltd and M/s Megha Engineering & Infrastructure Ltd. It is his submission the appellant has not owned the goods which were imported and has filed Bill of Entry and hence cannot be considered as owner for import. He would submit that the entire contract entered by M/s Megha Engg . & Infrastructure Ltd and M/s Photon Energy Systems Ltd would indicate that there was something wrong and the appellant, having not paid for the goods, cannot be held as importer. It is his submission that the findings of the adjudicating authority are very clear in as much as the officials of all the 3 units viz. M/s APCA Power Pvt. Ltd. with M/s Photon Energy Systems Ltd and M/s Megha Engineering & Infrastructure Ltd. have accepted that the agreement was only for the purpose of documenting the sale of goods before the goods land in India.

Reasoning of Judgement:- On careful consideration of the submissions made by both sides and perusal of the records, the hon’ble CESTAT found that the issue involved in this case is regarding the differential duty of Customs which has been confirmed by the adjudicating authority by denying the benefit of Notification No.1/2011-Cus. The CESTAT found that there is no dispute as to the fact that the goods which were imported, benefit of Notification No.1/2011-Cus, was claimed in respect of solar power generation project or facility for solar energy plant to be set up in Gujarat. It is also undisputed that M/s APCA Power Pvt. Ltd. was project promoter/ developer and has applied for said certificate with Govt. of India Ministry of New and Renewable Energy. Their application was entertained by Govt. of India Ministry of New and Renewable Energy and approximate certificate was issued to them extending the benefit of Notification No.1/2011-Cus, which accept and acknowledges the fact that the goods are needed for solar power generation project or facility. If that be the case, the benefit of Notification No.1/2011-Cus, cannot be denied to such goods.

Yet another angle to the entire issue is whether the appellant M/s APCA Power Pvt. Ltd., having filed Bill of Entry, can be considered as an importer or not. The Hon’ble CESTAT found that the definition of 'importer' under Section 2(26) of reads as under:

"'Importer', in relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes any owner or any person holding himself out to be the importer"

It can be seen from the above definition that the appellant can be considered as a person who is holding himself out to be an importer, even if all the arguments of the Revenue are accepted that the appellant has entered into various unwanted agreements of high sea sale.

In his view, the appellant has made out a strong prima facie case for pre-deposit of the amount of duty, interest thereof and the penalty imposed. It was found that the first appellate authority has confiscated the goods holding them as liable for confiscation. Thus, the goods are prima facie eligible for benefit of Notification No.1/2011-Cus, and the confiscation ordered by the adjudicating authority is, prima facie, erroneous.

Decision:- The stay application is allowed.

Comment:- The gist of the above case is that entering into high sea sale does not mean that person is not covered within the definition of importer so as to deny him the benefit of the exemption notification.

Comments

PJ/ Case Law/2013-14/1619

Post a Comment

Query