By TIOL News Service

MUMBAI, APR 03, 2017: THE appellants imported Parts of Computers and claimed concessional rate of additional duty under Notification No.76/2004-Cus, which was denied on the ground that the Notification applies to Central Processing Unit (CPU) and not to Parts of Computers.

The appellants cleared the goods on payment of normal duties "Under Protest" and requested the Dept. to allow them benefit of Notification No.6/2002-CE (Sr.261) on the ground that the imported goods were used for manufacture of Computers. The Commissioner(A) denied the alternative benefit claimed on the ground that they have not initially claimed exemption under Notification No.6/2002-CE in the Bills of Entry and also that the appellants have not challenged the assessment.

The appellant is before the CESTATand submits that the Parts of Computers imported by them are exempt at Sr.No.261 of Notification No.6/2002-CE, if used for the manufacture of Personal Computers. Reliance is placed on the decisions in Engee Industrial - 2016-TIOL-40-SC-CUS and SRF Ltd. - 2015-TIOL-74-SC-CUS. It is also submitted that filing of a refund claim itself has to be considered as challenging of assessment of Bills of Entry.

The AR disputed the claims made by the appellant and reiterated the findings of the Appellate Authority.

The Bench extracted the apex Court decision in Engee Industrial (supra) and observed -

+ We find that exemption under Notification No.6/2002-CE dated 1.3.2002 at Sr.261 is applicable to Parts of Computers used within factory of production for the manufacture of Computers of Heading 84.71. Admittedly, the Appellants are manufacturers of branded Computers and have used the Parts of computers imported for manufacture of Personal Computers, which have been cleared on payment of duty. Therefore, they would be eligible for exemption.

+ We find that the Commissioner (Appeals) finding that the Appellants had not initially claimed exemption in the Bills of Entry is also not tenable in light of settled position of law that the legitimate exemption, which was otherwise available under the statute, cannot be denied just because of the same was not claimed initially . We are of the view that although the benefit of said Notification was not claimed by the Appellants at the time of import, but claimed at a later date, the legitimate exemption, which was otherwise available, should not have been denied.

+ In the regime of self-assessment, the scope for grievance and filing of appeal is co-existent, as non-filing of appeal against the assessment of the Bill of Entry does not deprive the assessee the right to file refund as has been held by the Tribunal in the case of Commissioner vs. Physical Research Laboratory - 2016-TIOL-3037-CESTAT-MUM … filing of refund claim itself is challenge of Bills of Entry.

The impugned O-in-A was set aside and the appeals were allowed with consequential relief.

(See 2017-TIOL-1087-CESTAT-MUM)