2011(04)LCX0096

IN THE CESTAT, WEST ZONAL BENCH, MUMBAI [COURT NO. I]

S/Shri P.G. Chacko, Member (J) and Sahab Singh, Member (T)

Punjab State Sports Council

Versus

Commissioner of Customs (I), Mumbai

Final Order No. A/159/2011-WZB/C-II(CSTB), dated 6-4-2011 in Appeal No. C/1/2001

Departmental Clarification Quoted-

C.B.E. & C. Circular No. 70/2002-Cus, dated 25-10-2002 [Paras 5,6]

Advocated By -

Shri A.S. Gill, Advocate, for the Appellant.
Shri P.K. Agarwal, JCDR, for the Respondent.

[Order per : P.G. Chacko, Member (J)]. -

This matter is arising before this Bench once again on account of the remand order passed by the Hon'ble High Court in Writ Petition No. 174/2010 (Punjab State Sports Council v. UOI & Others), dated 11-3-2010. The final order passed by this Bench in the earlier round was set aside by the Hon'ble High Court and the matter has been remanded for fresh decision. The appellant had imported a consignment of "materials for laying synthetic athletic track" in March 1996, claiming exemption from payment of duty under Customs Notification No. 109/94 dated 12-4-1994. The goods were allowed to be cleared provisionally against a bond executed by the importer. Of course, an import licence also was produced by them. The relevant bill of entry classified the goods under SH 9506.00 of the First Schedule to the Customs Tariff Act. The provisional assessment of the goods was based on the declarations made in the bill of entry. Later on, in a show-cause notice dated 16-1-1999, the jurisdictional Assistant Commissioner of Customs proposed to finalise the assessment without grant of the benefit of the above Notification and to recover differential duty amounting to Rs. 1,59,21,909/- under Section 28 of the Customs Act. The assessee (appellant) contested the demand by submitting inter alia that the imported materials had already been made into a "synthetic athletic track" by a process of fabrication at site involving machine-mixing and laying of the raw material ingredients. In their reply to the show-cause notice, they also stated that they had taken up the matter for the Central Government's clarification. Before the adjudicating authority, the appellant also produced a Completion Certificate from the Director, Sports, Punjab 86 Secretary to the Punjab State Sports Council. After giving them an opportunity of being heard, the Assistant Commissioner held that the items imported by the appellant did not merit classification under SH 9506.99 of the Tariff Schedule and hence the same was not eligible for the benefit of Notification 109/94-Cus. He held the items to be classifiable as raw materials under CTH 40.05. In the result, the demand of duty came to be confirmed against the appellant under Section 28 of the Customs Act. An appeal filed by the party before the Commissioner of Customs (Appeals) did not succeed. Hence the present appeal.


2. It appears from the Hon'ble High Court's order dated 11-3-2010 that the appellant (writ petitioner) raised a grievance before the Hon ble High Court that their alternative plea for the benefit of certain other Notifications was not considered by this Tribunal in the earlier round. The Hon'ble High Court, after noting the consensus between the writ petitioner and the respondents, remanded the matter to this Tribunal for fresh decision.


3. Before us, the learned counsel for the appellant submits that the appellant is entitled to claim the benefit of Notification 109/94-Cus. It is submitted that what was imported by the appellant was, in fact, parts of athletic track and that, post-clearance, these parts were assembled into athletic track. On this basis, classification of the import item is claimed under Heading 95.06. It is submitted that the appellant, having produced the requisite certificate from the competent officer of the Government to the effect that the import was under the "scheme for laying synthetic tracks and artificial surfaces", was entitled to the benefit of the Notification as recommended by the said officer in the said certificate. The learned JCDR submits that what was imported by the appellant was a consignment of raw materials such as polyurethane, SBR rubber granules, adhesives etc. required for processing and producing an athletic track and not any components or parts of athletic track. Therefore, the import items were classifiable only as raw materials under Chapter 40 and not as articles/equipments under Chapter 95. After considering these submissions, we are unable to accept the claim of the learned counsel. The bill of entry described the goods as 'materials for laying synthetic athletic track'. In their application for import licence, the appellant stated that they were importing various quantities of polyurethane, black SBR rubber granules, red EPDM granules, special solvent, asphalt sealer, special adhesive, lining colour and aluminium rail. Even in their reply to the show-cause notice, the appellant conceded that these materials were processed at site by "machine-mixing and laying raw material ingredients". It would thus appear that raw materials for an athletic track were imported by the appellant and the same were processed at site into athletic track by using the requisite machinery. Such materials can by no stretch of imagination be classified as articles or equipments to be put under Heading 95.06 of the Tariff Schedule. These materials would rather merit classification as raw materials under Chapter 40 of the Tariff Schedule. Thus, on the classification issue, we have to concur with the lower authorities. If that be so, the appellant cannot claim the benefit of Notification 109/94-Cus. which was applicable only to goods falling under Heading. 95.06. In the present appeal, the appellant has claimed that the goods in question were classifiable under SH 9506.99. As we have already indicated. Heading 95.06 covered only complete articles and equipments for general physical exercise, gymnastics, athletics etc. Various sub-headings covered articles /equipments for various sports. The residuary sub-heading (-Other) included 9506.91 which covered articles and equipments for certain purposes and 9506.99 (-Other), under which the appellant claimed classification of the goods in question. By no stretch of imagination can the imported, raw materials be classified under this entry.


4. In the result, the benefit of Notification No. 109/94-Cus. cannot be claimed by the appellant in respect of the raw materials for athletic track, imported by them.


5. The learned counsel has now alternatively claimed the benefit of Notification No. 146/94-Cus., dated 13-7-1994. His claim is under serial No. 1 of the Table annexed to this Notification. The entry reads as under :

The learned JCDR has submitted that the appellant not being National Sports Federation or Sports authority of India is not eligible to claim the benefit. The learned counsel relies on Circular No. 70/2002-Cus., dated 25-10-2002 of C.B.E.C. and submits that the Board permitted the benefit of the above Notification to be extended to raw materials imported for laying athletic track. The learned JCDR has countered by submitting that the Board's clarification was on Notification 146/94-Cus. as amended by Notification 88/2002-Cus., dated 28-8-2002. It is pointed out that, by virtue of the said amendment, a Sports Authority of any State can also import sports requisites and claim the benefit of the Notification, but only prospectively. The imports in question were made as early as in March 1996 and hence the benefit of Notification 146/94-Cus. as amended by Notification 88 /2002-Cus. cannot be extended thereto.


6. We have considered these submissions also carefully. Notification 146/94-Cus. as it stood at the time of the subject-imports, granted full exemption from payment of duty on sports requisites imported into India by National Sports Federation (under a certificate issued by the Sports Authority of India) or by the Sports Authority of India itself for use in a national or international cham-pionship or competition to be held in India or abroad. The importer was required to produce a certificate from an officer not below the rank of a Director in the Sports Authority of India certifying that the goods were required for the aforesaid purpose. Even if it be assumed that the required certificate was produced by the appellant, it was of no avail inasmuch as the appellant was not one of the entities authorized to import sports requisites under claim for the benefit of the Notification. The Punjab State Sports Council has not claimed that they were eligible to import sports requisites under the above Notification in March 1996. The amending Notification No. 88/2002-Cus. added 'Sports Authorities of States' also to the list of importers of sports requisites under serial No. 1 of the Table annexed to Notification 146/94-Cus. This amendment did not have any retrospective operation and, therefore, the appellant cannot claim the benefit of the amended Notification 146/94-Cus. As rightly submitted by the learned JCDR, the Board's clarification contained in Circular No. 70/2002-Cus., dated 25-10-2002 can only be considered as a clarification of Notification 146/94-Cus. as amended by Notification 88/2002-Cus. In other words, the Board's clarification is not applicable to any import made prior to 28-8-2002 in so far as import of sports requisites is concerned. The Board was dealing with import of raw materials for laying synthetic athletic track. It noted that Notification 146/94-Cus. exempted sports requisites, spares, accessories and consumables imported by National Sports Federation, Sports Authority of India or Sports Authority of State for use in a national or international championship or competition. Obviously, the Board was considering the provisions of Notification 146/94-Cus. as amended by Notification 88/2002-Cus. Therefore, it was clarified that the benefit of the Notifica-tion would be available to such goods. This clarification is of no help to the appellant who imported sports requisites long before Notification 146/94 was crucially amended.


7. We appreciate a fervent plea made by the learned counsel. He has submitted that the scheme, under which the subject-goods were imported, intended to encourage sportsmen in the country and that the goods were actually used for fabricating athletic track as evidenced by the Completion Certificate produced before the adjudicating authority and hence the appellant should be granted the benefit of exemption from payment of duty. At this juncture, we are told by the learned JCDR that an application made by, the appellant to the Central Government under Section 25(2) of the Customs Act for ad hoc exemption in respect of the same goods was rejected, a fact not in dispute. A benefit denied to the appellant by the Government, which introduced the aforesaid scheme, cannot be granted by this Tribunal in equity or otherwise. Moreover, an Exemption Notification requires to be strictly construed and cannot be construed otherwise in favour of a particular party.


8. In the result, the impugned order is sustained and this appeal is dismissed.

(Pronounced in Court)

Equivalent 2011 (269) ELT 0540 (Tri. - Mumbai)